XML 26 R16.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Derivatives and hedging activities | 3 Months Ended
--- | ---
Mar. 31, 2018
Derivatives and hedging activities |
Derivatives and hedging activities | 9. Derivatives and hedging activities Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. The Company’s existing interest rate derivatives result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of March 31, 2018.
|  | Asset Derivatives |  | Asset Derivatives |  | Liability Derivatives |  | Liability Derivatives
|  | As of March 31, 2018 |  | As of December 31, 2017 |  | As of March 31, 2018 |  | As of December 31, 2017
|  | Balance Sheet |  |  |  |  | Balance Sheet |  |  |  |  | Balance Sheet |  |  |  |  | Balance Sheet |  |  |
|  | Location |  | Fair Value |  | Location |  | Fair Value |  | Location |  | Fair Value |  | Location |  | Fair Value
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Products |  | Other Assets |  | $ | 148 |  | Other Assets |  | $ | 655 |  | Other Liabilities |  | $ | 161 |  | Other Liabilities |  | $ | 733
Total derivatives not designated as hedging instruments |  |  |  | $ | 148 |  |  |  | $ |  |  |  |  | $ | 161 |  |  |  | $ |
Non-designated Hedges None of the Company’s derivatives are designated in qualifying hedging relationships. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers, which the Company implemented during the third quarter of 2017. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. As of March 31, 2018, the Company had 5 interest rate swaps with an aggregate notional amount of $58,777 related to this program compared to $55,928 at December 31, 2017. Effect of Derivative Instruments on the Income Statement The tables below present the effect of the Company’s derivative financial instruments on the Income Statement for the three months ended March 31, 2018.
|  |  |  | Amount of Gain or |
|  | Location of Gain or (Loss) |  | (Loss) Recognized in |
|  | Recognized in Income on |  | Income on Derivative |
Derivatives Not Designated as Hedging Instruments |  | Derivative |  | March 31, 2018 |
Interest Rate Products |  | Other non-interest income |  | $ | 66 |
Total |  |  |  | $ | 66 |
Credit-risk-related Contingent Features The Company has agreements with certain of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. The Company has agreements with certain of its derivative counterparties that contain provisions that require the Company’s debt to maintain an investment grade credit rating from each of the major credit rating agencies. If the Company’s credit rating is reduced below investment grade then a termination event shall be deemed to have occurred and the non-affected counterparty shall have the right but not obligation to terminate all affected transactions under the agreement. As of March 31, 2018 and December 31, 2017, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $12 and $79 respectively. The Company has minimum collateral posting thresholds with certain of its derivative counterparties, and has no posted collateral against its obligations under these agreements as of March 31, 2018, compared to collateral of $880 at December 31, 2017. If the Company had breached any of these provisions it could have been required to settle its obligations under the agreements at the termination value.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration