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Interest Rate Swap Agreements

3 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Interest Rate Swap Agreements

6. Interest Rate Swap Agreements

The Company utilizes interest rate swap agreements to manage exposure to variability in expected cash flows attributable to interest rate risk. The interest rate swap agreements convert a portion of the floating rate debt to a fixed rate, more closely matching the interest rate characteristics of finance receivables.

As of the three months ended June 30, 2017, no new contracts were initiated and one of the interest rate swap contracts matured. As of the three months ended June 30, 2016, no new contracts were initiated and no contracts matured.

On June 13, 2017 an interest rate swap agreement with an effective date of June 13, 2012, a notional amount of $25.0 million, and a fixed rate of interest of 1.00% expired. The impact of the swap is included in the gain recognized in income amount below.

The Company currently has one interest rate swap agreement. A July 30, 2012 interest rate swap agreement provides for a five-year interest rate swap in which the Company pays a fixed rate of 0.87% and receives payments from the counterparty on the 1-month LIBOR rate. This interest rate swap agreement had an effective date of August 13, 2012 and a notional amount of $25.0 million.

The locations and amounts of loss and gain in income are as follows:

		Three months ended June 30, (In thousands)
		2017				2016
Periodic change in fair value of interest rate swap agreements		$	(9	)		$	(18	)
Periodic settlement differentials included in interest expense			10				(63	)
Gain (loss) recognized in income		$	1			$	(81	)

Net realized losses and gains from the interest rate swap agreements were recorded in the interest expense line item of the consolidated statements of income. The following table summarizes the average variable rates received and average fixed rates paid under the swap agreements.

		Three months ended June 30,
		2017				2016
Variable rate received			1.02	%			0.44	%
Fixed rate paid			0.92	%			0.94	%

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- References

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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://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-URI http://asc.fasb.org/topic&trid=2229140

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