Note 12 - Derivative Financial Instruments

9 Months Ended

Sep. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Text Block]

12.	DERIVATIVE FINANCIAL INSTRUMENTS

April 1, 2016,

the Bank entered into a forward interest rate swap contract on a variable rate FHLB advance (indexed to

three

-month LIBOR) with a total notional amount

$10.0

million. The interest rate swap contract was designated as a derivative instrument in a cash flow hedge under

ASC Topic

815,

Derivatives and Hedging,

with the objective of protecting the quarterly interest rate payments on the FHLB advance from the risk of variability of those payments resulting from changes in the

three

-month LIBOR interest rate throughout the

seven

-year period beginning on

April 5, 2016

and ending on

April 5, 2023.

Under the swap arrangement, which became effective on

April 5, 2016,

the Bank will pay a fixed interest rate of

1.46%

and receive a variable interest rate based on

three

-month LIBOR on the total notional amount of

$10.0

million, with quarterly net settlements.

ineffectiveness related to the interest rate swap designated as a cash

flow hedge was recognized in the consolidated statements of operations for the

three

- or

nine

-month periods ended

September 30, 2017.

The accumulated net after-tax gain related to the effective cash flow hedge included in accumulated other comprehensive income totaled

$0.2

million as of both

September 30, 2017

and

December 31, 2016.