DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

In order to accommodate the borrowing needs of certain commercial customers, the Company has entered into interest rate swap or cap agreements with those customers. These interest rate derivative contracts effectively allow our customers to convert a variable rate loan to a fixed rate. In order to offset the exposure and manage interest rate risk, at the time an agreement was entered into with a customer, the Company entered into an interest rate swap or cap with a correspondent bank counterparty with offsetting terms. These derivative instruments are not designated as accounting hedges and changes in the net fair value are recognized in noninterest income or expense. Because we act as an intermediary for our customers, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on our results of operations. The fair value amounts are included in other assets and other liabilities.

The following is a summary of the interest rate swaps outstanding as of the dates set forth:

	December 31, 2017
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
	(Dollars in thousands)
Non-hedging derivative instruments:
Customer interest rate derivatives:
Interest rate swaps - receive fixed/pay floating	$	173,304	2.19 - 5.72%	LIBOR 1 month + 0% - 4.25%	Wtd. Avg. 2.8 years	$	880
Interest rate caps and collars	$	37,466	4.55 - 6.00%	LIBOR 1 month + 3% - 3.75%	Wtd. Avg. 1.7 years	$	75
Correspondent interest rate derivatives:
Interest rate swaps - pay fixed/receive floating	$	173,304	2.19 - 5.72%	LIBOR 1 month + 0% - 4.25%	Wtd. Avg. 2.8 years	$	(901	)
Interest rate caps and collars	$	37,466	4.55 - 6.00%	LIBOR 1 month + 3% - 3.75%	Wtd. Avg. 1.7 years	$	(75	)

	December 31, 2016
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
	(Dollars in thousands)
Non-hedging derivative instruments:
Customer interest rate derivatives:
Interest rate swaps - receive fixed/pay floating	$	185,637	2.19 - 5.72%	LIBOR 1 month + 0% - 4.25%	Wtd. Avg. 3.4 years	$	609
Interest rate caps	$	16,482	6.00%	LIBOR 1 month + 3%	Wtd. Avg. 2.0 years	$	5
Correspondent interest rate derivatives:
Interest rate swaps - pay fixed/receive floating	$	185,637	2.19 - 5.72%	LIBOR 1 month + 0% - 4.25%	Wtd. Avg. 3.4 years	$	(691	)
Interest rate caps	$	16,482	6.00%	LIBOR 1 month + 3%	Wtd. Avg. 2.0 years	$	(5	)

The estimated fair values of non-hedging derivative instruments are reflected within Company’s consolidated balance sheet (included in other assets and other liabilities). The notional amounts and estimated fair values of the non-hedging derivative instruments by classification as the dates set forth were as follows:

	December 31, 2017								December 31, 2016
			Estimated Fair Value								Estimated Fair Value
	Notional Amount		Asset Derivative			Liability Derivative			Notional Amount		Fair Value			Liability Derivative
	(Dollars in thousands)
Non-hedging interest rate derivatives:
Financial institution counterparty:
Interest rate swaps	$	173,304	$	1,326		$	448		$	185,637	$	698		$	1,389
Interest rate caps and collars	37,466		75			—			16,482		5			—
Commercial customer counterparty:
Interest rate swaps	173,304		423			1,325			185,637		1,307			698
Interest rate caps and collars	37,446		—			75			16,482		—			5
Gross derivatives			$	1,824		$	1,848				$	2,010		$	2,092
Offsetting derivative assets/liabilities			(369		)	(369		)			(698		)	(698		)
Net derivatives in the consolidated balance sheets			$	1,455		$	1,479				$	1,312		$	1,394