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Note 14 - Derivative Financial Instruments | 9 Months Ended
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Sep. 30, 2018
Notes to Financial Statements |
Derivative Instruments and Hedging Activities Disclosure [Text Block] |
14. | DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks 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 certain balance sheet assets and liabilities. In the normal course of business, the Company also uses derivative financial instruments to add stability to interest income or expense and to manage its exposure to movements in interest rates. The Company does not use derivatives for trading or speculative purposes and only enters into transactions that have a qualifying hedging relationship. The Company's hedging strategies involving interest rate derivatives are classified as either Fair Value Hedges or Cash Flow Hedges, depending upon the rate characteristic of the hedged item. Prior to the third quarter of 2018, the Bank held two forward interest rate swap contracts on variable-rate FHLB advances. The swaps were designated as derivative instruments in cash flow hedges with the objective of protecting the quarterly interest rate payments on the FHLB advances from the risk of variability of those payments resulting from changes in interest rates. During the third quarter of 2018, the Bank voluntarily settled both of these forward interest rate swap contracts with the counterparty and concurrently paid down the associated hedged variable-rate FHLB advances. Since the intended forecasted transactions (the variable interest rate payments associated with the FHLB advances) will no longer occur as previously expected, all amounts associated with the fair value of the derivative assets and net after-tax gains recorded in accumulated other comprehensive income were recognized as gains during the third quarter of 2018. The amounts recognized as gains totaled approximately $1.0 million on a pre-tax basis and $0.7 million on an after-tax basis.

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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 + Details
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