The Company enters into interest rate swap agreements (‘‘swap agreements’’) to facilitate the risk management strategies needed in order to accommodate the needs of its banking customers. The Company mitigates the risk of entering into these loan agreements by entering into equal and offsetting swap agreements with a highly rated third-party financial institution. This back-to-back swap agreement is a free-standing derivative and is recorded at fair value in the Company’s consolidated balance sheets (asset positions are included in other assets and liability positions are included in other liabilities) as of December 31, 2019. There were no such agreements outstanding as of December 31, 2018.

	December 31, 2019
	Notional Amount		Fair Value
(Dollars in thousands)
Interest Rate Swap Agreement
Receive Fixed/Pay Variable Swaps	$	2,145	$	185
Pay Fixed/Receive Variable Swaps		2,145		(185	)

The Company entered into three cash flow hedges as defined by ASC 815-20 during 2019. The objective of this interest rate swap was to hedge the risk of variability in its cash flows attributable to changes in the 3-month LIBOR benchmark rate component of forecasted 3-month fixed rate funding advances from the FHLB. The hedging objective was to reduce the interest rate risk associated with the Company’s fixed rate advances from the designation date and going through the maturity date. The identified hedge layers are summarized as follows, (in thousands):


	3-Month LIBOR		Cash & Securities	Period Hedged
	Hedged Notional		Exposure Hedged	From	To
$	15,000	$	15,000	July 1, 2019	July 1, 2022
$	25,000	$	25,000	August 2, 2019	February 2, 2023
$	10,000	$	10,000	August 29, 2019	August 29, 2023

Each layer has a variable receive leg of 3-month LIBOR and a fixed pay leg of 1.80%. The Company has the intent and ability to fund the three-month rate advances during the term of these cash flow hedges. The Company had cash collateral with the counterparty of $880 thousand as of December 31, 2019.

The Bank also participates in a “mandatory” delivery program for its government guaranteed and conventional mortgage loans held for sale. Under the mandatory delivery system, loans with interest rate locks are paired with the sale of a to be announced mortgage-backed security bearing similar attributes. Under the mandatory delivery program, the Bank commits to deliver loans to an investor at an agreed upon price prior to the close of such loans. This differs from a “best efforts” delivery, which sets the sale price with the investor on a loan-by-loan basis when each loan is locked.