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Off-Balance Sheet Commitments
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Jun. 30, 2011
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| Off-Balance Sheet Commitments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OFF-BALANCE SHEET COMMITMENTS |
NOTE 10 — OFF-BALANCE SHEET COMMITMENTS
We are a party to financial instruments with off-balance sheet risk in the normal course of
business to meet the financing needs of our customers. These financial instruments include
commitments to extend credit and standby letters of credit. These instruments involve, to varying
degrees, elements of credit and interest rate risk in excess of the amount recognized in the
Consolidated Balance Sheets. The Bank’s exposure to credit losses in the event of non-performance
by the other party to commitments to extend credit and standby letters of credit is represented by
the contractual notional amount of those instruments. The Bank uses the same credit policies in
making commitments and conditional obligations as it does for extending loan facilities to
customers. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount
of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on
management’s credit evaluation of the counterparty.
Collateral held varies but may include accounts receivable; inventory; property, plant and
equipment; and income-producing or borrower-occupied properties. The following table shows the
distribution of undisbursed loan commitments as of the dates indicated:
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