Note 6 Derivative Instruments

3 Months Ended

Sep. 30, 2011

Disclosure Text Block [Abstract]

Note 6 Derivative Instruments

Note 6.                        Derivative Instruments

In connection with its outstanding $10,000,000 amortizing term loan, a subsidiary of IHC entered into an interest rate swap on July 1, 2011 with the commercial bank lender, for a notional amount equal to the debt principal amount, under which the Company receives a variable rate equal to the rate on the debt and pays a fixed rate of 1.60% in order to manage the risk in overall changes in cash flows attributable to forecasted interest payments. As a result of the interest rate swap, interest payments on this debt were fixed at 4.95%. There was no hedge ineffectiveness on this interest rate swap which was accounted for as a cash flow hedge. At September 30 2011, the fair value of the interest rate swap was $589,000 which is included in other liabilities on the accompanying Condensed Consolidated Balance Sheet. See Note 7 for further discussion on the valuation techniques utilized to determine the fair value of the interest rate swap. For the three-month and nine-month periods ended September 30, 2011, the Company recorded $354,000 of losses on the effective portion of the interest rate swap in accumulated other comprehensive income on the accompanying Condensed Consolidated Balance Sheet, net of related tax benefits of $235,000.