Note 7.

Financial Instruments

Bonds

We held corporate and municipal bonds with par values totaling $49.5 million and $42.4 million at March 31, 2017 and December 31, 2016, respectively. All bonds are investment grade and are classified as available-for-sale. These bonds have maturity or callable dates ranging from April 2017 through May 2022, and are included in “Funds held for clients – current” in the accompanying Consolidated Balance Sheets based on our intent and ability to sell these investments at any time under favorable conditions. The following table summarizes our bond activity for the three months ended March 31, 2017 and the twelve months ended December 31, 2016 (in thousands):

	Three Months Ended			Twelve Months Ended
	March 31, 2017			December 31, 2016
Fair value at beginning of period	$	44,573		$	43,142
Purchases		10,418			11,355
Redemptions		(940	)		(2,900	)
Maturities and calls		(2,485	)		(6,878	)
Change in bond premium		359			(106	)
Fair market value adjustment		148			(40	)
Fair value at end of period	$	52,073		$	44,573

Interest Rate Swaps

We do not purchase or hold any derivative instruments for trading or speculative purposes. We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the credit facility. Under these interest rate swap contracts, we receive cash flows from counterparties at variable rates based on the London Interbank Offered Rate (“LIBOR”) and pay the counterparties a fixed rate. Refer to the Annual Report on Form 10-K for the year ended December 31, 2016 for further discussion on our interest rate swaps.

The following table summarizes our outstanding interest rate swaps and their classification in the accompanying Consolidated Balance Sheets at March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017
	Notional		Fair
	Amount		Value (1)		Balance Sheet Location
Interest rate swaps (2)	$	50,000	$	661	Other non-current assets
Interest rate swaps (2)	$	10,000	$	15	Other current assets
	December 31, 2016
	Notional		Fair
	Amount		Value (1)		Balance Sheet Location
Interest rate swaps (2)	$	50,000	$	525	Other non-current assets
Interest rate swaps (2)	$	10,000	$	4	Other current assets

(1)

Refer to Note 8, Fair Value Measurements, for additional disclosures regarding fair value measurements.

(2)

The notional value of each interest rate swap is $10.0 million, $15.0 million, $25.0 million, and $10.0 million with maturities of 2, 3, 5 and 5 years, respectively. Under the terms of the interest rate swaps, we pay interest at a fixed rate of 0.885% (2-year), 1.155% (3-year), 1.300% (5-year) and 1.120% (5-year) plus applicable margin as stated in the agreement, and receive interest that varies with the one-month LIBOR.

The following table summarizes the effects of the interest rate swap on CBIZ’s accompanying Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016 (in thousands):

	Gain (Loss) Recognized in AOCL, Net of Tax					Gain Reclassified from AOCL into Expense
	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2017		2016			2017		2016
Interest rate swap	$	93	$	(532	)	$	58	$	105