Note 4 - Derivatives and Hedging Activities

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 4 – DERIVATIVES AND HEDGING ACTIVITIES

Following is a summary of interest rate cap derivatives held by the Company as of June 30, 2015 and December 31, 2014. An initial premium of $2.1 million was paid for the two caps. The fair value of these instruments will fluctuate with market value changes, as well as amortization of the initial premium to interest expense.

Effective Date	Maturity Date	Balance Sheet Location	Notional Amount		Accounting Treatment	June 30, 2015 Fair Value		December 31, 2014 Fair Value
June 5, 2014	June 5, 2019	Other Assets	$	15,000,000	Cash Flow Hedging	$	450,020	$	608,189
June 5, 2014	June 5, 2021	Other Assets		15,000,000	Cash Flow Hedging		773,954		879,197
			$	30,000,000		$	1,223,973	$	1,487,386

Changes in the fair values of derivative financial instruments accounted for as cash flow hedges to the extent they are effective hedges, are recorded as a component of AOCI. The following is a summary of how AOCI was impacted during the reporting periods:

	Three Months Ended
	June 30, 2015			June 30, 2014
Unrealized loss at beginning of period, net of tax	$	(637,037	)	$	-
Amount reclassified from AOCI to noninterest income related to hedge ineffectiveness		7,755			-
Amount reclassified from AOCI to interest expense related to caplet amortization		1,806			-
Amount of income (loss) recognized in other comprehensive income, net of tax		53,165			(251,149	)
Unrealized loss at end of period	$	(574,311	)	$	(251,149	)

	Six Months Ended
	June 30, 2015			June 30, 2014
Unrealized loss at beginning of period, net of tax	$	(399,367	)	$	-
Amount reclassified from AOCI to noninterest income related to hedge ineffectiveness		8,097			-
Amount reclassified from AOCI to interest expense related to caplet amortization		2,366			-
Amount of income (loss) recognized in other comprehensive income, net of tax		(185,407	)		(251,149	)
Unrealized loss at end of period	$	(574,311	)	$	(251,149	)

Changes in the fair value related to the ineffective portion of cash flow hedges, are reported in noninterest income during the period of the change. As shown in the tables above, $7,755 and $8,097 of the change in fair value for the three and six months ended June 30, 2015, respectively, was due to ineffectiveness. There was no ineffectiveness during the three and six months ended June 30, 2014.