Note 17 - Derivative Financial Instruments

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

17.          Derivative Financial Instruments

The derivative instruments we utilize in the normal course of business are interest rate lock commitments and forward sales of mortgage-backed securities, both of which typically are short-term in nature. Forward sales of mortgage-backed securities are utilized to hedge changes in fair value of our interest rate lock commitments as well as mortgage loans held-for-sale not under commitments to sell. For forward sales of mortgage-backed securities, as well as interest rate lock commitments that are still outstanding at the end of a reporting period, we record the changes in fair value of the derivatives in revenues in the financial services section of our consolidated statements of operations and comprehensive income with an offset to other assets or accounts payable and accrued liabilities in the financial services section of our consolidated balance sheets, depending on the nature of the change.

At September 30, 2016, we had interest rate lock commitments with an aggregate principal balance of

$105.8

million. Additionally, we had

$26.8 million of mortgage loans held-for-sale at September 30, 2016 that had not yet been committed to a mortgage purchaser.

In order to hedge the changes in fair value of our interest rate lock commitments and mortgage loans held-for-sale that had not yet been committed to a mortgage purchaser, we had forward sales of securities totaling

$88.5

million at September 30, 2016.

For the three and nine months ended September 30, 2016, we recorded net gains on our derivatives of $0.1 million and $1.1 million, respectively, compared to $0.9 and $1.5 million for the same periods in 2015.