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Derivative Instruments and Hedging Activities
12 Months Ended
Jun. 30, 2015
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities

Note 15 – Derivative Instruments and Hedging Activities

The Company was subject to the terms of certain interest rate derivative agreements that were utilized by the Company to manage the interest rate exposure arising from specific wholesale funding positions.  Such wholesale funding sources include floating-rate brokered money market deposits indexed to one-month LIBOR as well as a number of 90 day fixed-rate FHLB advances that are forecasted to be periodically redrawn at maturity for the same 90 day term as the original advance.  The derivatives, comprising eight interest rate swaps and two interest rate caps, were designated as cash flow hedges with changes in their fair value recorded as an adjustment through other comprehensive income on an after-tax basis.

The effects of derivative instruments on the Consolidated Financial Statements for June 30, 2015 are as follows:

 

 

June 30, 2015

 

Notional/

Contract

Amount

 

 

Fair

Value

 

 

Balance

Sheet

Location

 

Expiration

Date

 

(Dollars in Thousands)

Derivatives designated as hedging

   instruments

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps by effective date:

 

 

 

 

 

 

 

 

 

 

 

July 1, 2013

$

165,000

 

 

$

(768

)

 

Other liabilities

 

July 1, 2018

August 19, 2013

 

75,000

 

 

 

(1,149

)

 

Other liabilities

 

August 20, 2018

October 9, 2013

 

50,000

 

 

 

(400

)

 

Other liabilities

 

October 9, 2018

March 28, 2014

 

75,000

 

 

 

(1,372

)

 

Other liabilities

 

March 28, 2019

June 5, 2015

 

60,000

 

 

 

(1,717

)

 

Other liabilities

 

June 5, 2020

July 28, 2015

 

50,000

 

 

 

(1,697

)

 

Other liabilities

 

July 28, 2020

September 28, 2015

 

40,000

 

 

 

(1,289

)

 

Other liabilities

 

September 28, 2020

December 28, 2015

 

35,000

 

 

 

(1,119

)

 

Other liabilities

 

December 28, 2020

 

 

550,000

 

 

 

(9,511

)

 

 

 

 

Interest rate caps by effective date:

 

 

 

 

 

 

 

 

 

 

 

June 5, 2013

 

40,000

 

 

 

428

 

 

Other liabilities

 

June 5, 2018

July 1, 2013

 

35,000

 

 

 

366

 

 

Other liabilities

 

July 1, 2018

 

 

75,000

 

 

 

794

 

 

 

 

 

Total

$

625,000

 

 

$

(8,717

)

 

 

 

 

Note 15 – Derivative Instruments and Hedging Activities (continued)

 

 

Year Ended June 30, 2015

 

 

Amount of Loss

Recognized in OCI on

Derivatives, net of Tax

(Effective Portion)

 

 

Location of Gain (Loss) Recognized in Income of

Derivatives

(Ineffective Portion)

 

Amount of Gain (Loss)

Recognized in Income of Derivatives

(Ineffective Portion)

 

 

(Dollars in Thousands)

 

Derivatives in cash flow hedges

 

 

 

 

 

 

 

 

 

Interest rate swaps by effective date:

 

 

 

 

 

 

 

 

 

July 1, 2013

$

(515

)

 

Not applicable

 

$

-

 

August 19, 2013

 

(24

)

 

Not applicable

 

 

-

 

October 9, 2013

 

(98

)

 

Not applicable

 

 

-

 

March 28, 2014

 

(100

)

 

Not applicable

 

 

-

 

June 5, 2015

 

(855

)

 

Not applicable

 

 

-

 

July 28, 2015

 

(1,004

)

 

Not applicable

 

 

-

 

September 28, 2015

 

(762

)

 

Not applicable

 

 

-

 

December 28, 2015

 

(662

)

 

Not applicable

 

 

-

 

 

 

(4,020

)

 

 

 

 

-

 

Interest rate caps by effective date:

 

 

 

 

 

 

 

 

 

June 5, 2013

 

(247

)

 

Not applicable

 

 

-

 

July 1, 2013

 

(245

)

 

Not applicable

 

 

-

 

 

 

(492

)

 

 

 

 

-

 

Total

$

(4,512

)

 

 

 

$

-

 

 

Note 15 – Derivative Instruments and Hedging Activities (continued)

The effects of derivative instruments on the Consolidated Financial Statements for June 30, 2014 are as follows:

 

 

June 30, 2014

 

Notional/

Contract

Amount

 

 

Fair

Value

 

 

Balance

Sheet

Location

 

Expiration

Date

 

(Dollars in Thousands)

Derivatives designated as hedging

   instruments

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps by effective date:

 

 

 

 

 

 

 

 

 

 

 

July 1, 2013

$

165,000

 

 

$

103

 

 

Other liabilities

 

July 1, 2018

August 19, 2013

 

75,000

 

 

 

(1,109

)

 

Other liabilities

 

August 20, 2018

October 9, 2013

 

50,000

 

 

 

(234

)

 

Other liabilities

 

October 9, 2018

March 28, 2014

 

75,000

 

 

 

(1,203

)

 

Other liabilities

 

March 28, 2019

June 5, 2015

 

60,000

 

 

 

(271

)

 

Other liabilities

 

June 5, 2020

 

 

425,000

 

 

 

(2,714

)

 

 

 

 

Interest rate caps by effective date:

 

 

 

 

 

 

 

 

 

 

 

June 5, 2013

 

40,000

 

 

 

913

 

 

Other liabilities

 

June 5, 2018

July 1, 2013

 

35,000

 

 

 

826

 

 

Other liabilities

 

July 1, 2018

 

 

75,000

 

 

 

1,739

 

 

 

 

 

Total

$

500,000

 

 

$

(975

)

 

 

 

 

 

 

Year Ended June 30, 2014

 

 

Amount of Loss

Recognized in OCI on

Derivatives, net of Tax

(Effective Portion)

 

 

Location of Gain (Loss) Recognized in Income of

Derivatives

(Ineffective Portion)

 

Amount of Gain (Loss)

Recognized in Income of Derivatives

(Ineffective Portion)

 

 

(Dollars in Thousands)

 

Derivatives in cash flow hedges

 

 

 

 

 

 

 

 

 

Interest rate swaps by effective date:

 

 

 

 

 

 

 

 

 

July 1, 2013

$

(896

)

 

Not applicable

 

$

-

 

August 19, 2013

 

(656

)

 

Not applicable

 

 

-

 

October 9, 2013

 

(138

)

 

Not applicable

 

 

-

 

March 28, 2014

 

(711

)

 

Not applicable

 

 

-

 

June 5, 2015

 

(883

)

 

Not applicable

 

 

-

 

 

 

(3,284

)

 

 

 

 

-

 

Interest rate caps by effective date:

 

 

 

 

 

 

 

 

 

June 5, 2013

 

(333

)

 

Not applicable

 

 

-

 

July 1, 2013

 

(292

)

 

Not applicable

 

 

-

 

 

 

(625

)

 

 

 

 

-

 

Total

$

(3,909

)

 

 

 

$

-

 

Note 15 – Derivative Instruments and Hedging Activities (continued)

The effects of derivative instruments on the Consolidated Financial Statements for June 30, 2013 are as follows:

 

 

Year Ended June 30, 2013

 

 

Amount of Gain

Recognized in OCI on

Derivatives, net of Tax

(Effective Portion)

 

 

Location of Gain (Loss) Recognized in Income of

Derivatives

(Ineffective Portion)

 

Amount of Gain (Loss)

Recognized in Income of Derivatives

(Ineffective Portion)

 

 

(Dollars in Thousands)

 

Derivatives in cash flow hedges

 

 

 

 

 

 

 

 

 

Interest rate swaps by effective date:

 

 

 

 

 

 

 

 

 

July 1, 2013

$

957

 

 

Not applicable

 

$

-

 

June 5, 2015

 

722

 

 

Not applicable

 

 

-

 

 

 

1,679

 

 

 

 

 

-

 

Interest rate caps by effective date:

 

 

 

 

 

 

 

 

 

June 5, 2013

 

128

 

 

Not applicable

 

 

-

 

July 1, 2013

 

31

 

 

Not applicable

 

 

-

 

 

 

159

 

 

 

 

 

-

 

Total

$

1,838

 

 

 

 

$

-

 

 

The Company has in place an enforceable master netting arrangement with every counterparty. All master netting arrangements include rights to offset associated with the Company’s recognized derivative assets, derivative liabilities, and cash collateral received and pledged.

At June 30, 2015, two of the Company’s derivatives were in an asset position totaling $794,000 while the remaining eight derivatives were in a liability position totaling $9.5 million.  In total, the Company’s derivatives were in a net liability position of $8.7 million at June 30, 2015 and included in other liabilities as of that date.  As required under the enforceable master netting arrangement with its derivatives counterparty, the Company posted financial collateral in the amount of $8.7 million at June 30, 2015 that was not included as an offsetting amount.

At June 30, 2014, three of the Company’s derivatives were in an asset position totaling $1.8 million while the remaining four derivatives were in a liability position totaling $2.8 million.  In total, the Company’s derivatives were in a net liability position of $975,000 at June 30, 2014 and included in other liabilities as of that date.  As required under the enforceable master netting arrangement with its derivatives counterparty, the Company posted financial collateral in the amount of $1,090,000 at June 30, 2014 that was not included as an offsetting amount.