7.	Financial Instruments

Bonds

In connection with CBIZ’s payroll business and the collection of client funds, CBIZ invests a portion of these funds in corporate and municipal bonds. CBIZ held corporate and municipal bonds with par values totaling $37.0 million and $36.4 million at June 30, 2015 and December 31, 2014, respectively. All bonds are investment grade and are classified as available-for-sale. These bonds have maturity or callable dates ranging from July 2015 through November 2019, and are included in “Funds held for clients - current” in the accompanying Consolidated Balance Sheets based on the intent and ability of the Company to sell these investments at any time under favorable conditions. The following table summarizes CBIZ’s bond activity for the six months ended June 30, 2015 and the twelve months ended December 31, 2014 (in thousands):


	Six Months Ended June 30, 2015			Twelve Months Ended December 31, 2014
Fair value at beginning of period	$	38,399		$	30,011
Purchases		6,661			14,089
Sales		—			(245	)
Maturities and calls		(5,950	)		(6,426	)
Increase in bond premium		59			1,155
Fair market value adjustment		(12	)		(185	)

Fair value at end of period	$	39,157		$	38,399

Interest Rate Swaps

CBIZ uses interest rate swaps to manage interest rate risk exposure primarily through converting portions of floating rate debt under the credit facility to a fixed rate basis. These agreements involve the receipt or payment of floating rate amounts in exchange for fixed rate interest payments over the life of the agreements without an exchange of the underlying principal amounts. CBIZ does not enter into derivative instruments for trading or speculative purposes. See the Annual Report on Form 10-K for the year ended December 31, 2014 for further discussion on CBIZ’s interest rate swaps.

CBIZ’s interest rate swap agreement expired in June 2015. At December 31, 2014, the interest rate swap was classified as a liability derivative. The following table summarizes CBIZ’s outstanding interest rate swap and its classification in the accompanying Consolidated Balance Sheets at December 31, 2014 (in thousands).


	December 31, 2014
	Notional		Fair			Balance Sheet
	Amount		Value (2)			Location
Interest rate swap (1)	$	25,000	$	(126	)	Other current and non-current liabilities

(3)	Represents interest rate swap with a notional value of $25 million which expired in June 2015. Under the terms of the interest rate swap, CBIZ paid interest at a fixed rate of 1.41% plus applicable margin as stated in the agreement, and received interest that varied with the three-month LIBOR.

(4)	See additional disclosures regarding fair value measurements in Note 8.

The following table summarizes the effects of the interest rate swap on CBIZ’s accompanying Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014 (in thousands):


	Gain Recognized in AOCL, net of tax				Loss Reclassified from AOCL into Expense
	Three Months Ended June 30,				Three Months Ended June 30,
	2015		2014		2015		2014
Interest rate swap	$	34	$	61	$	55	$	109
	Six Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Interest rate swap	$	79	$	117	$	128	$	226