Hedge Accounting

9 Months Ended

Sep. 30, 2020

Note 18 – Hedge Accounting

As of September 30, 2020, and December 31, 2019, our Company held interest rate derivatives in the total notional amount of $8.0 million and $8.0 million, respectively.

The derivatives are recorded on the balance sheet at fair value and are included in the following line items:


	Liability Derivatives
	September 30,			December 31,
	2020			2019
(Dollars in thousands)	Balance sheet location	Fair value		Balance sheet location	Fair value
Interest rate contracts	Derivative financial instruments - current portion	$	217	Derivative financial instruments - current portion	$	109
	Derivative financial instruments - non-current portion		266	Derivative financial instruments - non-current portion		233
Total derivatives designated as hedging instruments		$	483		$	342
Total derivatives		$	483		$	342

We have no derivatives designated as hedging instruments which are in asset positions.

The changes in fair value are recorded in Other Comprehensive Income and released into interest expense in the same period(s) in which the hedged transactions affect earnings. In the quarter and nine months ended to September 30, 2020 and September 30, 2019, respectively, the derivative instruments affected Comprehensive Income as follows:


(Dollars in thousands)	Location of Loss Recognized in Income on Derivatives	Amount of Loss Recognized in Income on Derivatives
		Quarter Ended September 30, 2020				Nine Months Ended September 30, 2020
			2020		2019		2020		2019
Interest rate contracts	Interest expense	$	60	$	18	$	140	$	42
Total		$	60	$	18	$	140	$	42


	Loss Recognized in OCI on Derivatives (Effective Portion)
(Dollars in thousands)	Amount				Amount
	Quarter Ended September 30				Nine Months Ended September 30
		2020		2019		2020		2019
Interest rate contracts	$	60	$	38	$	282	$	253
Total	$	60	$	38	$	282	$	253

	Loss Reclassified from OCI into Income (Effective Portion)
Line Item	Amount				Amount
	Quarter Ended September 30				Nine Months Ended September 30
		2020		2019		2020		2019
Interest expense	$	60	$	18	$	141	$	42
Total	$	60	$	18	$	141	$	42

The derivative has no ineffective portion, and consequently no losses have been recognized directly in income.