Note 20 - Derivative Financial Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

20. Derivative Financial Instruments and Hedging Activities

At September 30, 2014 and December 31, 2013, the Company’s only derivative instruments related to residential mortgage-banking activities.

Because the Company has historically sold the mortgage loans it originates each quarter, the notional amount of the Company’s commitments to originate conforming mortgage loans held for sale have been accounted for as derivative financial instruments. However, since the Company intends to retain the potential mortgage loans associated with commitments to lend at September 30, 2014, fewer commitments to originate conforming mortgage loans were accounted for as derivative financial instruments at September 30, 2014.

At September 30, 2014, the notional amount of commitments to originate conforming mortgage loans held for sale totaled $215 thousand. These derivative loan commitments had positive fair values, included in Other assets in the Consolidated Balance Sheets, totaling $9 thousand. At December 31, 2013, the notional amount of commitments to originate conforming mortgage loans held for sale totaled $7.3 million and were considered derivative financial instruments. These derivative loan commitments had positive fair values, included in Other assets in the Consolidated Balance Sheet, totaling $176 thousand and negative fair values, included in Other liabilities in the Consolidated Balance Sheet, totaling $3 thousand. The net change in derivative loan commitment fair values during the three months ended September 30, 2014 and 2013 resulted in income (expense) of $(223) thousand and $147 thousand, respectively. The net change in derivative loan commitment fair values during the nine months ended September 30, 2014 and 2013 resulted in expense of $165 thousand and $78 thousand, respectively.

The notional amount of forward sales commitments totaled $715 thousand at September 30, 2014. These forward sales commitments had negative fair values, included in Other liabilities in the Consolidated Balance Sheets, totaling $2 thousand. The notional amount of forward sales commitments totaled $6.8 million at December 31, 2013. These forward sales commitments had positive fair values, included in Other assets in the Consolidated Balance Sheets, totaling $28 thousand and negative fair values, included in Other liabilities in the Consolidated Balance Sheets, totaling $4 thousand. The net change in forward sales commitment fair values during the three months ended September 30, 2014 and 2013 resulted in income (expense) of $38 thousand and $(245) thousand, respectively. The net change in forward sales commitment fair values during the nine months ended September 30, 2014 and 2013 resulted in expense of $27 thousand and $85 thousand, respectively.