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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2019
Derivative Financial Instruments |
Derivative Financial Instruments | Note 13: Derivative Financial Instruments The Company enters into derivative financial instruments, including interest rate lock commitments issued to residential loan customers for loans that will be held for sale, forward sales commitments to sell residential mortgage loans to loan investors and derivatives to customers for interest rate swaps. See “Note 14: Fair Value Measurements” for further discussion of the fair value measurement of such derivatives. Interest Rate Lock Commitments. At March 31, 2019 and December 31, 2018, the Company had issued $53.8 million and $27.2 million, respectively, of unexpired interest rate lock commitments to loan customers. Such interest rate lock commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the unaudited consolidated financial statements, with changes in the fair values of the corresponding derivative financial assets or liabilities recorded as either a charge or credit to current earnings during the period in which the changes occurred. Forward Sales Commitments. At March 31, 2019 and December 31, 2018, the Company had issued $69.2 million and $48.6 million, respectively, of unexpired forward sales commitments to mortgage loan investors. Typically, the Company economically hedges mortgage loans held for sale and interest rate lock commitments issued to its residential loan customers related to loans that will be held for sale by obtaining corresponding best-efforts forward sales commitments with an investor to sell the loans at an agreed-upon price at the time the interest rate locks are issued to the customers. Forward sales commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the unaudited consolidated financial statements. While such forward sales commitments generally served as an economic hedge to the mortgage loans held for sale and interest rate lock commitments, the Company did not designate them for hedge accounting treatment. Changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred. The fair values of derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands):
|  | March 31, 2019 |  | December 31, 2018
Fair value recorded in other assets |  | $ | 835 |  | $ | 624
Fair value recorded in other liabilities |  |  | 1,118 |  |  | 1,205
The gross gains and losses on these derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in non-interest income and expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands):
|  | Three Months Ended March 31, |
|  | 2019 |  | 2018 |
Gross gains |  | $ | 1,078 |  | $ | 732 |
Gross (losses) |  |  | (1,118) |  |  | (1,054) |
Net gains (losses) |  | $ | (40) |  | $ | (322) |
The impact of the net gains or losses on derivative financial instruments related to interest rate lock commitments issued to residential loan customers for loans that will be held for sale and forward sales commitments to sell residential mortgage loans to loan investors are almost entirely offset by a corresponding change in the fair value of loans held for sale. Derivatives to Customers. The Company may offer derivative contracts to its customers in connection with their risk management needs. These derivatives are primarily interest rate swaps. The Company manage s the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer. With notional values of $334.7 million and $243.7 million at March 31, 2019 and December 31, 2018, respectively, these contracts support variable rate, commercial loan relationships totaling $167.4 million and $121.8 million, respectively. These derivatives generally worked together as an economic interest rate hedge, but the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred. The fair values of derivative assets and liabilities related to derivatives for customers for interest rate swaps recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands):
|  |  | March 31, 2019 |  |  | December 31, 2018
Fair value recorded in other assets |  | $ | 5,151 |  | $ | 1,438
Fair value recorded in other liabilities |  |  | 5,151 |  |  | 1,438
The gross gains and losses on these derivative assets and liabilities recorded in non-interest income and non-interest expense in the unaudited Consolidated Statements of Income are summarized as follows (dollars in thousands):
| Three Months Ended March 31,
|  | March 31, 2019 |  |  | March 31, 2018
Gross gains | $ | 3,713 |  | $ | 954
Gross losses |  | (3,713) |  |  | (954)
Net gains (losses) | $ | — |  | $ | —
The Company pledged $5.7 million in cash to secure its obligation under these contracts at March 31, 2019. The Company pledged $1.0 million in cash to secure its obligation under contracts at December 31, 2018.

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- References No definition available. + Details
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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 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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