Derivatives and Hedging Activities

12 Months Ended

Dec. 31, 2012

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

The Company periodically enters into certain commercial loan interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rates. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to a swap agreement. This swap agreement effectively converts the customer’s variable rate loan into a fixed rate. The Company then enters into a corresponding swap agreement with a third party in order to offset its exposure on the variable and fixed components of the customer agreement. As the interest rate swap agreements with the customers and third parties are not designated as hedges under the Derivatives and Hedging topic of the FASB ASC, the instruments are marked to market in earnings. The notional amount of open interest rate swap agreements at December 31, 2012 and 2011 was $177.0 million and $160.3 million, respectively. There was no impact to the statement of operations for the years ending December 31, 2012, 2011 and 2010.

The following table presents the fair value and balance sheet classification of derivatives not designated as hedging instruments at December 31, 2012 and 2011:

	Asset Derivatives						Liability Derivatives
	2012			2011			2012			2011
(in thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate contracts	Other assets	$	14,921	Other assets	$	16,302	Other liabilities	$	14,921	Other liabilities	$	16,302