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Derivative Financial Instruments
 3 Months Ended
Mar. 31, 2014
Derivative Financial Instruments [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS
NOTE 5 – DERIVATIVE FINANCIAL INSTRUMENTS
 
Risk Management Objective of Using Derivatives
 
The Company is exposed to certain risks arising from both its business operations and economic conditions.  The Company manages its exposures to a wide variety of business and operational risks primarily 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 and through the use of derivative financial instruments.  Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.  The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to certain variable-rate assets.
 
Non-designated Hedges
 
The Company does not use derivatives for trading or speculative purposes.  Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers.  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, 2014 and December 31, 2013, the notional amount of customer-facing swaps was approximately $13.3 million and $13.5 million, respectively.  This amount is offset with third party counterparties, as described above.
 
The Company has minimum collateral posting thresholds with its derivative counterparties.  As of March 31, 2014 and December 31, 2013, the Company had posted cash as collateral in the amount of $0.3 million and $0.2 million, respectively.

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, 2014 and December 31, 2013.
 
 
($ in thousands)
Asset Derivatives
 
Liability Derivatives
 
 
March 31, 2014
 
March 31, 2014
 
 
Balance Sheet
 
Fair
 
Balance Sheet
 
Fair
 
Derivatives not designated as hedging instruments:
Location
 
Value
 
Location
 
Value
 
          
Interest rate contracts
Other Assets
 $250 
Other Liabilities
 $250 
              
 
Asset Derivatives
 
Liability Derivatives
 
 
December 31, 2013
 
December 31, 2013
 
 
Balance Sheet
 
Fair
 
Balance Sheet
 
Fair
 
Derivatives not designated as hedging instruments:
Location
 
Value
 
Location
 
Value
 
              
Interest rate contracts
Other Assets
 $257 
Other Liabilities
 $257 
 
Effect of Derivative Instruments on the Income Statement
 
The Company’s derivative financial instruments had no net effect on the Income Statements for the three months ended March 31, 2014 and 2013.