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DERIVATIVE HEDGING INSTRUMENTS
 12 Months Ended
Dec. 31, 2013
DERIVATIVE HEDGING INSTRUMENTS [Abstract]  
DERIVATIVE HEDGING INSTRUMENTS

21.  DERIVATIVE HEDGING INSTRUMENTS

The Company can use various interest rate contracts, such as interest rate swaps, caps, floors and swaptions to help manage interest rate and market valuation risk exposure, which is incurred in normal recurrent banking activities. The Company can use derivative instruments, primarily interest rate swaps, to manage interest rate risk and match the rates on certain assets by hedging the fair value of certain fixed rate debt, which converts the debt to variable rates and by hedging the cash flow variability associated with certain variable rate debt by converting the debt to fixed rates.

To accommodate a customer need and support the Company's asset/liability positioning, we entered into an interest rate swap with the customer and Pittsburgh National Bank (PNC) in the fourth quarter of 2008. This arrangement involved the exchange of interest payments based on the notional amounts. The Company entered into a floating rate loan and a fixed rate swap with our customer. Simultaneously, the Company entered into an offsetting fixed rate swap with PNC. In connection with each swap transaction, the Company agreed to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Company agreed to pay PNC the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. This transaction allowed the Company's customer to effectively convert a variable rate loan to a fixed rate. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts offset each other and did not significantly impact the Company's results of operations.

The following table summarizes the interest rate swap transactions that impacted the Company's 2013 performance:

                             
START DATE   MATURITY DATE   HEDGE TYPE   NOTIONAL AMOUNT   RATE RECEIVED   RATE PAID   REPRICING FREQUENCY   INCREASE (DECREASE) IN INTEREST EXPENSE
12/12/08     09/24/13       FAIR VALUE     $ 9,000,000       5.25 %      2.73 %      MONTHLY     $ 165,488  
12/12/08     09/24/13       FAIR VALUE       9,000,000       2.73       5.25       MONTHLY       (165,488)  
                                                     $ -  

The Company monitors and controls all derivative products with a comprehensive Board of Director approved hedging policy. This policy permits a total maximum notional amount outstanding of $500 million for interest rate swaps, interest rate caps/floors, and swaptions. All hedge transactions must be approved in advance by the Investment Asset/Liability Committee (ALCO) of the Board of Directors.