Derivative Instruments and Hedging Activity

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY

Note 8.Derivative Instruments and Hedging Activity

In 2014, we entered into a forward-starting interest rate swap agreement to hedge the risk of variability in cash flows attributable to changes in the 3 month LIBOR rate. This particular hedging objective was to reduce the interest rate risk associated with our forecasted issuances of 3 month fixed rate debt arising from a rollover strategy of an FHLB advance, which matured in June 2016.  We have and will continue to rollover the FHLB advance through the swap expiration of June 2021. This derivative was used as part of the asset/liability management process, is linked to a specific liability and has a high correlation between the contract and the underlying item being hedged, both at inception and throughout the hedge period. The derivative was designated as a cash flow hedge with the change in fair value recorded as an adjustment through other comprehensive income (loss) until the underlying forecasted transactions occur, at which time the deferred gains and losses are recognized in earnings. As of June 30, 2017 an investment security with a fair value of $622 thousand was pledged as collateral to the counterparty of this transaction.

The effects of the derivative instrument on the Consolidated Financial Statements at June 30, 2017 and December 31, 2016 and for the three and six months ended June 30, 2017 were as follows:

	As of June 30, 2017
	Notional
	Contract				Balance Sheet	Expiration
(In thousands)	Amount		Fair Value		Location	Date
Derivatives designated as hedging instruments
Interest rate swaps:
Effective June 24, 2016	$	15,000	$	(464)	Other liabilities	June 24, 2021
Total:	$	15,000	$	(464)

	As of December 31, 2016
	Notional
	Contract				Balance Sheet	Expiration
(In thousands)	Amount		Fair Value		Location	Date
Derivatives designated as hedging instruments
Interest rate swaps:
Effective June 24, 2016	$	15,000	$	(494)	Other liabilities	June 24, 2021
Total:	$	15,000	$	(494)

	For the three months ended June 30, 2017
	Amount of Loss		Location of Loss	Amount of Loss
	Recognized		Recognized	Recognized
	in OCI		in Income	in Income
	on Derivatives		on Derivatives	on Derivatives
(In thousands)	(Effective Portion)		(Ineffective Portion)	(Ineffective Portion)
Derivatives designated as hedging instruments
Interest rate swaps:
Effective June 24, 2016	$	(25)	Not Applicable	$	—
Total:	$	(25)		$	—

	For the six months ended June 30, 2017
	Amount of Gain		Location of Loss	Amount of Loss
	Recognized		Recognized	Recognized
	in OCI		in Income	in Income
	on Derivatives		on Derivatives	on Derivatives
(In thousands)	(Effective Portion)		(Ineffective Portion)	(Ineffective Portion)
Derivatives designated as hedging instruments
Interest rate swaps:
Effective June 24, 2016	$	20	Not Applicable	$	—
Total:	$	20		$	—

	For the year ended December 31, 2016
	Amount of Gain		Location of Loss	Amount of Loss
	Recognized		Recognized	Recognized
	in OCI		in Income	in Income
	on Derivatives		on Derivatives	on Derivatives
(In thousands)	(Effective Portion)		(Ineffective Portion)	(Ineffective Portion)
Derivatives designated as hedging instruments
Interest rate swaps:
Effective June 24, 2016	$	40	Not Applicable	$	—
Total:	$	40		$	—

	For the three months ended June 30, 2016
	Amount of Loss		Location of Loss	Amount of Loss
	Recognized		Recognized	Recognized
	in OCI		in Income	in Income
	on Derivatives		on Derivatives	on Derivatives
(In thousands)	(Effective Portion)		(Ineffective Portion)	(Ineffective Portion)
Derivatives designated as hedging instruments
Interest rate swaps:
Effective June 24, 2016	$	(123)	Not Applicable	$	—
Total:	$	(123)		$	—

	For the six months ended June 30, 2016
	Amount of Loss		Location of Loss	Amount of Loss
	Recognized		Recognized	Recognized
	in OCI		in Income	in Income
	on Derivatives		on Derivatives	on Derivatives
(In thousands)	(Effective Portion)		(Ineffective Portion)	(Ineffective Portion)
Derivatives designated as hedging instruments
Interest rate swaps:
Effective June 24, 2016	$	(445)	Not Applicable	$	—
Total:	$	(445)		$	—