Note 19 - Derivative Financial Instruments

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

19. Derivative Financial Instruments

At December 31, 2014, the Company’s derivative financial instruments consisted of interest rate swaps and at December 31, 2013, the Company’s derivative financial instruments consisted of purchased options and interest rate swaps. The Company’s interest rate swaps are used to mitigate the Company’s exposure to rising interest rates on a portion ($18.0 million) of its floating rate junior subordinated debentures that have a contractual value of $61.9 million. Additionally, the Company at times may use interest rate swaps to mitigate the Company’s exposure to rising interest rates on its fixed rate loans.

The purchased options, which expired during 2014, were used to mitigate the Company’s exposure to rising interest rates on its financial liabilities without stated maturities.

At December 31, 2014 and 2013 derivatives with a combined notional amount of $36.3 million and $118.0 million, respectively, were not designated as hedges. Derivatives with a combined notional amount of $14.5 million and $11.2 million were designated as fair value hedges at December 31, 2014 and 2013, respectively. Changes in the fair value of the derivatives not designated as hedges are reflected in “Net gain/loss from fair value adjustments” in the Consolidated Statements of Income.  The portion of the change in the fair value of the derivative designated as a fair value hedge which is considered ineffective is reflected in “Net gain/loss from fair value adjustments” in the Consolidated Statements of Income.

The following table sets forth information regarding the Company’s derivative financial instruments at December 31, 2014:

	At or for the year ended December 31, 2014
	Notional Amount		Net Carrying Value (1)
	(In thousands)
Interest rate swaps (non-hedge)	$	36,321	$	(2,239	)
Interest rate swaps (hedge)		4,131		84
Interest rate swaps (hedge)		10,340		(410	)
Total derivatives	$	50,792	$	(2,565	)

The following table sets forth information regarding the Company’s derivative financial instruments at December 31, 2013:

	At or for the year ended December 31, 2013
	Notional Amount		Purchase Price		Net Carrying Value (1)
	(In thousands)
Interest rate caps (non-hedge)	$	100,000	$	9,035	$	-
Interest rate swaps (non-hedge)		18,000		-		1,681
Interest rate swaps (hedge)		11,217		-		400
Total derivatives	$	129,217	$	9,035	$	2,081

(1) Derivatives in a net positive position are recorded as “Other assets” and derivatives in a net negative position are recorded as “Other liabilities” in the Consolidated Statements of Financial Condition. There were no unrealized losses on derivative financial instruments at December 31, 2014 and 2013.

The following table sets forth the effect of derivative instruments on the Consolidated Statements of Income for the periods indicated:

	For the year ended December 31,
(In thousands)	2014			2013			2012
Financial Derivatives:
Interest rate caps (non-hedge)	$	-		$	(18	)	$	(337	)
Interest rate swaps (non-hedge)		(3,919	)		3,603			(1,927	)
Interest rate swaps (hedge)		(124	)		29			-
Net Gain (loss) (1)	$	(4,043	)	$	3,614		$	(2,264	)

(1) Net gains (losses) are recorded as “Net gain (losses) from fair value adjustments” in the Consolidated Statements of Income.