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Note 12 - Derivative Financial Instruments | 9 Months Ended
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Sep. 30, 2016
Notes to Financial Statements |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 12. Derivative Financial Instruments At September 30, 2016 and December 31, 2015, the Company’s derivative financial instruments consist of interest rate swaps. The Company’s interest rate swaps are used for two purposes. The first purpose is 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 at both September 30, 2016 and December 31, 2015. The second purpose is to mitigate the Company’s exposure to rising interest rates on certain fixed rate loans totaling $208.1 million and $146.9 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016 and December 31, 2015, derivatives with a combined notional amount of $36.3 million were not designated as hedges. At September 30, 2016 and December 31, 2015, derivatives with a combined notional amount of $189.8 million and $128.5 million were designated as fair value hedges. Changes in the fair value of interest rate swaps not designated as hedges are 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 the periods indicated:
|  | September 30, 2016 |  | December 31, 2015
|  | Notional Amount |  | Net Carrying Value (1) |  | Notional Amount |  | Net Carrying Value (1)
Interest rate swaps (hedge) |  | $ | - |  |  | $ | - |  |  | $ | 28,588 |  |  | $ | 48 |
Interest rate swaps (hedge) |  |  | 189,791 |  |  |  | (9,095 | ) |  |  | 99,955 |  |  |  | (1,515 | )
Interest rate swaps (non-hedge) |  |  | 36,321 |  |  |  | (6,331 | ) |  |  | 36,321 |  |  |  | (2,799 | )
Total derivatives |  | $ | 226,112 |  |  | $ | (15,426 | ) |  | $ | 164,864 |  |  | $ | (4,266 | )
(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 at September 30, 2016 and December 31, 2015.
The following table sets forth the effect of derivative instruments on the Consolidated Statements of Income for the periods indicated:
|  | For the three months ended September 30, |  | For the nine months ended September 30,
(In thousands) |  | 2016 |  | 2015 |  | 2016 |  | 2015
Financial Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps (non-hedge) |  | $ | (111 | ) |  | $ | (1,753 | ) |  | $ | (3,532 | ) |  | $ | (882 | )
Interest rate swaps (hedge) |  |  | (380 | ) |  |  | (387 | ) |  |  | (795 | ) |  |  | (433 | )
Net (loss) gain (1) |  | $ | (491 | ) |  | $ | (2,140 | ) |  | $ | (4,327 | ) |  | $ | (1,315 | )
(1) | Net gains and losses are recorded as part of “Net gain (losses) from fair value adjustments” in the Consolidated Statements of Income.
During the three months and nine months ended September 30, 2016 and 2015, the Company did not record any hedge ineffectiveness. The Company’s interest rate swaps are subject to master netting arrangements and are all with the same counterparty. The Company has not made a policy election to offset its derivative positions. The Company did not have derivative assets presented in the Consolidated Statements of Condition at September 30, 2016. The following tables present the effect of the master netting arrangements on the presentation of the derivative assets in the Consolidated Statements of Condition as of the dates indicated:
|  | December 31, 2015
|  |  |  |  |  |  |  | Gross Amounts Not Offset in the Consolidated Statement of Condition |  |
(In thousands) |  | Gross Amount of Recognized Assets |  | Gross Amount Offset in the Statement of Condition |  | Net Amount of Assets Presented in the Statement of Condition |  | Financial Instruments |  | Cash Collateral Received |  | Net Amount
Interest rate swaps |  | $ | 48 |  |  | $ | - |  |  | $ | 48 |  |  | $ | 48 |  |  | $ | - |  |  | $ | - |
The following tables present the effect the master netting arrangements had on the presentation of the derivative liabilities in the Consolidated Statements of Condition as of the dates indicated:
|  | September 30, 2016
|  |  |  |  |  |  |  | Gross Amounts Not Offset in the Consolidated Statement of Condition |  |
(In thousands) |  | Gross Amount of Recognized Liabilities |  | Gross Amount Offset in the Statement of Condition |  | Net Amount of Liabilities Presented in the Statement of Condition |  | Financial Instruments |  | Cash Collateral Pledged |  | Net Amount
Interest rate swaps |  | $ | 15,426 |  |  | $ | - |  |  | $ | 15,426 |  |  | $ | - |  |  | $ | 15,426 |  |  | $ | - |
|  | December 31, 2015
|  |  |  |  |  |  |  | Gross Amounts Not Offset in the Consolidated Statement of Condition |  |
(In thousands) |  | Gross Amount of Recognized Liabilities |  | Gross Amount Offset in the Statement of Condition |  | Net Amount of Liabilities Presented in the Statement of Condition |  | Financial Instruments |  | Cash Collateral Pledged |  | Net Amount
Interest rate swaps |  | $ | 4,314 |  |  | $ | - |  |  | $ | 4,314 |  |  | $ | 48 |  |  | $ | 4,266 |  |  | $ | - |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41620-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624163-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579240-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624177-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41641-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579245-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624258-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80748-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5708775-113959 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5708773-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5618551-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5580258-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624181-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41638-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
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