DERIVITIVE FINANCIAL INSTRUMENTS AND HEDGING

3 Months Ended

Mar. 31, 2014

DERIVITIVE FINANCIAL INSTRUMENTS AND HEDGING

DERIVITIVE FINANCIAL INSTRUMENTS AND HEDGING

NOTE 11 -    DERIVITIVE FINANCIAL INSTRUMENTS AND HEDGING

Information about our derivative financial instruments at March 31, 2014 and December 31, 2013 follows (dollars in thousands):

	March 31, 2014						December 31, 2013
	Number of Instruments	Notional Amount		Fair Value			Number of Instruments	Notional Amount		Fair Value
Interest rate swaps (asset)	3	$	28,957	$	208		3	$	29,273	$	253
Interest rate swaps (liability)	1	75,000		(1,796		)	1	75,000		(1,772		)
	4	$	103,957	$	(1,588	)	4	$	104,273	$	(1,519	)

Our interest rate swaps are designated as cash flow hedges and are valued using a market approach, which is a Level 2 valuation technique, and are all in a liability position. At March 31, 2014, we had not posted any collateral related to these agreements and were not in breach of any financial provisions of the agreements. If we had breached any agreement provisions, we could have been required to settle our obligations under these agreements at their aggregate termination value of $1.8 million at March 31, 2014.

Details of the location in the financial statements of the loss recognized on derivative financial instruments designated as cash flow hedges follows (in thousands):

	For the Three Months Ended March 31,
	2014			2013
Gain (loss) recognized in accumulated other comprehensive income on derivative financial instruments (effective portion)	$	(495	)	$	21
Loss reclassified from accumulated other comprehensive income to interest expense (effective portion)	$	(427	)	$	(86	)

Amounts reported in accumulated other comprehensive income (loss) related to derivative financial instruments will be reclassified to interest expense as interest payments are made on the hedged variable-rate debt.