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FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
 3 Months Ended
Dec. 31, 2015
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK [Abstract]  
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

NOTE M - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

 

The Company uses derivative financial instruments, such as interest rate floors and collars, as part of its interest rate risk management. Interest rate caps and floors are agreements whereby one party agrees to pay or receive a floating rate of interest on a notional principal amount for a predetermined period of time if certain market interest rate thresholds are met. The Company considers the credit risk inherent in these contracts to be negligible.

 

As of December 31, 2015 and September 30, 2015, the Company did not hold any interest rate floors or collars.

 

The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit are summarized in the below table. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheets.

 

    2015  
    December 31     September 30  
    (Dollars in thousands)  
Financial instruments whose contract amounts                
represent credit risk                
Letters of credit   $ 694     $ 694  
Unused lines of credit     45,753       45,039  
Fixed rate loan commitments     2,008       1,597  
Variable rate loan commitments     10,080       7,937  
                 
    $ 58,535     $ 55,267