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Financial Derivatives

12 Months Ended

Dec. 31, 2019

Financial Derivatives [Abstract]

Financial Derivatives

Note 15. Financial Derivatives



The Corporation is exposed to certain risks arising from both its business operations and economic conditions.  The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. 



The Corporation’s existing credit derivatives result from participations in interest rate swaps provided by external lenders as part of loan participation arrangements, therefore, are not used to manage interest rate risk in the Corporation’s assets or liabilities.  Derivatives not designated as hedges are not speculative and result from a service the Corporation provides to certain lenders which participate in loans.



The table below presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the Balance Sheet as of December 31, 2019.







Fair Value of Derivative Instruments



Derivative Liabilities

(Dollars in thousands)

As of December 31, 2019

As of December 31, 2018

Date

Notional amount

Balance Sheet Location

Fair Value

Notional amount

Balance Sheet Location

Fair Value

Derivatives not designated as hedging instruments

Other Contracts

7,011

Other Liabilities

$

19

—

Other Liabilities

$

—

Total derivatives not designated as hedging instruments

$

19

$

—



The table below presents the effect of the Corporation’s derivative financial instruments that are not designated as hedging instruments on the Income Statement as of December 31, 2019.






Effect of Derivatives Not Designated as Hedging Instruments on the Statement of Financial Performance
Derivatives Not Designated as Hedging Instruments under Subtopic 815-20		Location of Gain or (Loss) Recognized in Income on Derivative		Amount of Gain or (Loss) Recognized in Income on Derivatives
(Dollars in thousands)				Year Ended December 31
					2019			2018
Other Contracts		Other income/(expense)		$	165		$	-



As of December 31, 2019, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $19 thousand.

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- References

No definition available.

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-URI http://asc.fasb.org/topic&trid=2229140

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