DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses derivative financial instruments to manage its interest rate risk. These instruments carry varying degrees of credit, interest rate, and market or liquidity risks. Derivative instruments are recognized as either assets or liabilities on the balance sheet and are measured at fair value. Subsequent changes in the fair value of derivatives are recognized in other comprehensive income for effective hedges, and changes in fair value are recognized in earnings for all other derivatives.

Interest Rate Swaps

The table below provides a summary of forward starting pay fixed interest rate swaps that are being used to hedge short-term FHLB advances. These interest rate swaps are expected to be highly effective and are accounted for as cash flow hedges with the change in fair value recognized in OCI. The purpose of these cash flow hedges is to reduce the Company's exposure to variability in interest payments attributable to changes in the three-month LIBOR component of three-month FHLB advances. Each three-month FHLB advance will be executed to correspond to the effective dates of the respective interest rate swaps and will continue to be rolled for the full term of each interest rate swap.

Interest Rate Swap	Notional Amount		Effective Start Date	Maturity Date	Pay Fixed Rate		Receive Floating Rate
FHLB Advance Swap 1	$	25,000	February 5, 2016	February 5, 2021	2.70	%	3-Month LIBOR
FHLB Advance Swap 2	50,000		August 5, 2016	August 5, 2021	2.88	%	3-Month LIBOR
FHLB Advance Swap 3	25,000		October 5, 2017	October 5, 2027	2.54	%	3-Month LIBOR
FHLB Advance Swap 4	25,000		March 5, 2018	March 5, 2028	2.58	%	3-Month LIBOR
	$	125,000

The table below provides information on a receive fixed interest rate swap that is being used to hedge certain floating rate loans. This interest rate swap is expected to be highly effective and is accounted for as a cash flow hedge with the change in fair value recognized in OCI. The purpose of this cash flow hedge is to reduce the Company's exposure to variability in interest receipts attributable to changes in one-month LIBOR, which is the index underlying the hedged floating rate loans.

Interest Rate Swap	Notional Amount		Effective Start Date	Maturity Date	Receive Fixed Rate		Pay Floating Rate
Loan Swap	$	40,000	October 1, 2015	October 1, 2020	1.23	%	1-Month LIBOR

In 2015, the Company terminated certain pay fixed interest rate swaps. For terminated interest rate swaps, the changes in fair value that were recorded in AOCI prior to termination will be amortized to yield over the period the hedged transactions impact earnings. The hedged transactions are currently outstanding and are expected to remain outstanding through the full original term of the interest rate swaps. The following table summarizes information regarding the terminated interest rate swaps.

Terminated Interest Rate Swap	Notional Amount		Original Effective Start Date	Original Maturity Date	Date Terminated	Unamortized Pre-Tax Loss in AOCI as of December 31, 2015
Terminated Swap 1	$	25,000	April 6, 2015	April 5, 2020	March 27, 2015	$	72
Terminated Swap 2	25,000		May 5, 2015	May 5, 2020	March 27, 2015	72
Terminated Swap 3	25,000		June 5, 2015	June 5, 2020	March 27, 2015	74
Terminated Swap 4	25,000		August 5, 2015	August 5, 2020	March 27, 2015	811
Terminated Swap 5	25,000		October 1, 2014	August 31, 2017	October 7, 2015	183
Terminated Swap 6	25,000		October 16, 2014	August 16, 2018	October 7, 2015	381

Interest Rate Caps

In previous years, the Company purchased interest rate caps that are being used to hedge a floating rate subordinated term loan and certain floating rate TRUPs. The underlying index for each debt instrument is three-month LIBOR. In the event that the underlying index rate exceeds the strike rate on the respective cap, the counterparty would pay the Company the difference between the underlying index and the strike rate.

These interest rate cap contracts are classified as effective cash flow hedges. Therefore, the changes in fair value of the caps are recognized in OCI. The following table summarizes key terms of each interest rate cap.

Interest Rate Cap	Notional Amount		Effective Start Date	Maturity Date	Strike Rate		Underlying Index of Cap	Variable Rate on Underlying Debt
Cap 1	$	7,500	July 1, 2012	July 1, 2017	0.47	%	3-Month LIBOR	3-Month LIBOR + 4.00%
Cap 2	8,000		July 7, 2012	July 7, 2017	0.47		3-Month LIBOR	3-Month LIBOR + 3.10%
Cap 3	25,000		September 15, 2014	September 15, 2019	1.82		3-Month LIBOR	3-Month LIBOR + 1.32%
Cap 4	10,000		September 30, 2014	September 30, 2019	1.85		3-Month LIBOR	3-Month LIBOR + 2.80%
	$	50,500

Mortgage Loan Commitments

The Company enters into interest rate lock commitments with customers and commitments to sell mortgages to investors. The forward sale commitments are entered into with investors to manage the interest rate risk associated with the customer interest rate lock commitments, and both are considered derivative financial instruments. These derivative instruments are carried at fair value and do not qualify for hedge accounting. The fair value of the interest rate lock commitments is based on the value that can be generated when the underlying loan is sold on the secondary market and is included on the consolidated balance sheets in other assets and on the consolidated statements of operations in mortgage banking income. The fair value of the forward sale commitments is based on changes in the value of the commitment, principally because of changes in interest rates, and is included on the consolidated balance sheets in other assets or other liabilities and on the consolidated statements of operations in mortgage banking income.

The following table summarizes the balance sheet location and fair value amounts of derivative instruments grouped by the underlying hedged instrument.

		December 31, 2015				December 31, 2014
	Balance Sheet Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Loans:
Receive fixed interest rate swap	Other liabilities	$	40,000	$	493	$	—	$	—
FHLB advances:
Pay fixed interest rate swaps	Other assets	—		—		75,000		795
Pay fixed interest rate swaps	Other liabilities	125,000		3,822		100,000		2,249
Brokered money market deposits:
Pay fixed interest rate swaps	Other liabilities	—		—		50,000		200
Subordinated term loan:
Interest rate cap	Other liabilities	7,500		61		7,500		128
TRUPs:
Interest rate caps	Other assets	43,000		482		43,000		1,104
Mortgage loan commitments:
Interest rate lock commitments	Other assets	30,313		408		23,274		342
Forward sale commitments	Other assets	52,862		106		—		—
Forward sale commitments	Other liabilities	—		—		34,727		49

Activity in AOCI related to cash flow hedges is presented in Note R. If a cash flow hedge ceases to be highly effective or is terminated, then the hedge is dedesignated, and effective changes in value that are recorded in AOCI before dedesignation are amortized to yield over the period the forecasted hedged transactions impact earnings. If the transaction is no longer probable of occurring during the forecast period or within a short period thereafter, hedge accounting is ceased and any gain or loss in AOCI is reported in earnings immediately.

The Company monitors the credit risk of the counterparties to the interest rate swaps and caps.