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Derivative Activities
 3 Months Ended
Mar. 31, 2017
Derivative Activities [Abstract]  
Derivative Acitivities

NOTE 7 — DERIVATIVES

The following table presents the Company’s derivative assets and liabilities at March 31, 2017 and December 31, 2016:

March 31,December 31,
20172016
(In thousands)
Derivative assets:
Interest rate swaps not designated as hedges$1,017$1,187
Interest rate caps106143
$1,123$1,330
Derivative liabilities:
Interest rate swaps designated as cash flow hedges8221,004
Interest rate swaps not designated as hedges1,0171,187
Interest rate caps106139
Other22107
$1,967$2,437

Interest Rate Swaps

The Company enters into interest rate swap contracts to hedge the variability of future interest cash flows of forecasted wholesale borrowings attributable to changes in a predetermined variable index rate. The interest rate swaps effectively fix the Company’s interest payments on an amount of forecasted interest expense attributable to the variable index rate corresponding to the swap notional stated rate. These swaps are designated as cash flow hedges for the forecasted wholesale borrowing transactions, are properly documented as such, and therefore, qualify for cash flow hedge accounting. Any gain or loss associated with the effective portion of the cash flow hedges is recognized in other comprehensive income (loss) and is subsequently reclassified into operations in the period during which the hedged forecasted transactions affect earnings. Changes in the fair value of these derivatives are recorded in accumulated other comprehensive income to the extent there is no significant ineffectiveness in the cash flow hedging relationships. Currently, the Company does not expect to reclassify any amount included in other comprehensive income (loss) related to these interest rate swaps to operations in the next twelve months.

The following table shows a summary of these swaps and their terms at March 31, 2017:

NotionalFixedVariableTradeSettlementMaturity
TypeAmountRateRate IndexDateDateDate
(In thousands)
Interest Rate Swaps$36,2212.4210%1-Month LIBOR 07/03/1307/03/1308/01/23
$36,221

An accumulated unrealized loss of $822 thousand and $1.0 million was recognized in accumulated other comprehensive income (loss) related to the valuation of these swaps at March 31, 2017 and December 31, 2016, respectively, and the related liability is being reflected in the consolidated statements of financial condition.

At March 31, 2017 and December 31, 2016, interest rate swaps not designated as hedging instruments that were offered to clients represented an asset of $1.0 million and $1.2 million, respectively, and were included as part of derivative assets in the consolidated statements of financial position. The credit risk to these clients stemming from these derivatives, if any, is not material. At March 31, 2017 and December 31, 2016, interest rate swaps not designated as hedging instruments that are the mirror-images of the derivatives offered to clients represented a liability of $1.0 million and $1.2 million, respectively, and were included as part of derivative liabilities in the consolidated statements of financial condition.

The following table shows a summary of these interest rate swaps not designated as hedging instruments and their terms at March 31, 2017:

NotionalFixedVariableSettlementMaturity
TypeAmountRateRate IndexDateDate
(In thousands)
Interest Rate Swaps - Derivatives Offered to Clients$12,5005.5050%1-Month LIBOR04/11/0904/11/19
$12,500
Interest Rate Swaps - Mirror Image Derivatives$12,5005.5050%1-Month LIBOR04/11/0904/11/19
$12,500

Interest Rate Caps

The Company has entered into interest rate cap transactions with various clients with floating-rate debt who wish to protect their financial results against increases in interest rates. In these cases, the Company simultaneously enters into mirror-image interest rate cap transactions with financial counterparties. None of these cap transactions qualify for hedge accounting, and therefore, they are marked to market through earnings. As of March 31, 2017 and December 31, 2016, the outstanding total notional amount of interest rate caps was $135.9 million and $136.1 million, respectively. At March 31, 2017 and December 31, 2016, the interest rate caps sold to clients represented a liability of $106 thousand and $139 thousand, respectively, and were included as part of derivative liabilities in the consolidated statements of financial condition. At March 31, 2017 and December 31, 2016, the interest rate caps purchased as mirror-images represented an asset of $106 thousand and $143 thousand, respectively, and were included as part of derivative assets in the consolidated statements of financial condition.