Financial Derivatives

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Derivatives

Financial Derivatives

Financial derivatives are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. For derivatives not designated as hedges, the gain or loss is recognized in current earnings. The Company has entered into interest rate swap contracts to meet loan customer needs, while managing interest rate risk to the Company. Upon entering into these swaps, the Company also enters into offsetting positions with a counterparty to minimize interest rate risk to the Company. These individual swap contracts qualify as derivatives, but are not designated as hedging instruments and therefore the gain or loss is recognized through earnings. Interest rate swap contracts involve the risk of dealing with borrowers and counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is an asset the counterparty or customer owes the Company, and results in credit risk to the Company. When the fair value of the swap contract is a liability, the Company owes the customer or counterparty and therefore, has assumed no credit no risk beyond the original extension of credit. These contracts are accounted for using the long haul method whereby the respective fair values are recorded as assets or liabilities and not netted. Since the fair values offset, no net gain or loss has been recognized in 2014 or 2013.

A summary of the Company's interest rate swaps is as follows:

	December 31, 2014						December 31, 2013
	Notional Amount			Estimated Fair Value			Notional Amount			Estimated Fair Value
Pay fixed - receive floating interest rate swap	$	20,394		$	(314	)	$	15,286		$	174
Pay floating - receive fixed interest rate swap	(20,394		)	314			(15,286		)	(174		)
Total derivatives not designated	$	0		$	0		$	0		$	0