Note 13. Balance Sheet Offsetting

Derivative financial instruments may be eligible for offset in the consolidated balance sheets, such as those subject to enforceable master netting arrangements or a similar agreement. Under these agreements, the Company has the right to net settle multiple contracts with the same counterparty. The Company offers an interest rate swap product to qualified customers. These derivative financial instruments are paired with derivative contracts entered into with a counterparty bank. While derivative contracts entered into with counterparty banks may be subject to enforceable master netting agreements, derivative contracts with customers may not be subject to enforceable master netting arrangements. As such, these instruments have been excluded from the table below.

Financial instruments that are eligible for offset in the consolidated balance sheets as of June 30, 2016 are presented in the table below:

							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets

	Gross Amounts Recognized in the Consolidated Balance Sheets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral		Net Amount
	(dollars in thousands)
June 30, 2016
Financial liabilities:
Derivatives not designated as hedging instruments	$	1,503	$	-	$	1,503	$	-	$	1,600	$	(97)
Total	$	1,503	$	-	$	1,503	$	-	$	1,600	$	(97)

As shown in the table above, as of June 30, 2016, the Company pledged cash collateral of $1.6 million for interest rate swaps in a liability position.