XML 59 R29.htm IDEA: XBRL DOCUMENT v2.4.1.9
DERIVATIVE HEDGING INSTRUMENTS
 12 Months Ended
Dec. 31, 2014
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.


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.