Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2011

Commitments and Contingent Liabilities [Abstract]

Commitments and Contingent Liabilities

Note 9.  Commitments and Contingent Liabilities

The Bank has entered into four banking facility leases of greater than one year.

The first lease was entered into on January 31, 1999.  The lease provides for an original five-year term with a renewal option for additional periods of five years on the Bank's Sudley Road, Manassas branch.  The Bank renewed the lease January 31, 2004 and again on January 31, 2009. Rent for 2012 is expected to be $218,000.

The second lease for a branch office in Old Town Manassas was entered into on April 10, 2001, and was renegotiated in January 2011.  The renegotiated lease begins on May 31, 2011 and provides for an original five-year term with the right to renew for one additional five-year period beginning on June 1, 2016. Annual rent is $48,000 for the first five years.

The third lease is for the property in Haymarket, Virginia where the Bank opened its ninth full-service branch office in December 2009.  The term of the lease is 20 years after the branch opening with two additional options for five years each. The projected rent for 2012 is $172,000, and will increase 3% annually.

The fourth lease is for the property in Bristow, Virginia where the Bank opened its tenth full-service branch office in July 2009.  The lease will expire ten years after the branch opening with two additional options for five years each. The projected rent for 2012 is $186,000, and will increase 3% annually.

Total rent expense was $621,564, $577,693, and $520,464 for 2011, 2010, and 2009, respectively, and was included in occupancy expense.

The Bank has one data processing contractual obligation of greater than one year.  The contractual expense for the Bank's largest primary contractual obligation is for core data processing, and totaled $1,011,998, and $894,569  for 2011 and 2010, respectively. In addition to core data processing, this contract provides for interchange processing where the expense is based on interchange volume. The interchange expense for 2011 was $574,065, but was offset by interchange income on those same transaction. The term of the current data processing obligation began in July 2009, and ends in June 2015.

The following is a schedule by year of future minimum lease requirements and contractual obligations required under the long-term non-cancellable lease agreements:

Period	Amount
2012	$	1,976,670
2013		2,031,925
2014		2,106,530
2015		1,391,101
2016		666,661
Thereafter		6,935,477
Total	$	15,108,364

As a member of the Federal Reserve System, the Company's subsidiary bank is required to maintain certain average reserve balances.  For the final weekly reporting period in the years ended December 31, 2011 and 2010 the aggregate amounts of daily average required balances were approximately $17,076,000 and $14,700,000, respectively.

In the normal course of business, there are various outstanding commitments and contingent liabilities, such as guarantees, commitments to extend credit, etc., which are not reflected in the accompanying consolidated financial statements.  The Company does not anticipate a material impact on its financial statements.

See Note 15 with respect to financial instruments with off-balance-sheet risk.