Interest Rate Swap Agreements

9 Months Ended

Dec. 31, 2016

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 nine months ended December 31, 2016 and 2015, no new contracts were initiated and no contracts matured.

The Company currently has two interest rate swap agreements. A June 4, 2012 interest rate swap agreement provides for a five-year interest rate swap in which the Company pays a fixed rate of 1% and receives payments from the counterparty on the 1-month LIBOR rate. This interest rate swap agreement had an effective date of June 13, 2012 and a notional amount of $25.0 million. A July 30, 2012 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 losses in income are as follows:

	Three months ended December 31, (In thousands)						Nine months ended December 31, (In thousands)
	2016			2015			2016			2015
Periodic change in fair value of interest rate swap agreements	$	(81	)	$	(251	)	$	(184	)	$	(128	)
Periodic settlement differentials included in interest expense		45			90			163			279
(Gain) loss recognized in income	$	(36	)	$	(161	)	$	(21	)	$	151

Net realized losses 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 December 31,						Nine months ended December 31,
	2016			2015			2016			2015
Variable rate received		0.58	%		0.24	%		0.51	%		0.21	%
Fixed rate paid		0.94	%		0.94	%		0.94	%		0.94	%