Guarantees and Loan Commitments

9 Months Ended

Sep. 30, 2012

Guarantees [Abstract]

Guarantees and Loan Commitments

Guarantees and Loan Commitments

The Company does not issue any guarantees that would require liability recognition or disclosure, other than standby letters of credit. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. They primarily are issued to facilitate the customers' normal course of business transactions. The credit risk associated with letters of credit is essentially the same as that of traditional loan facilities. The Company generally requires collateral and/or personal guarantees to support these commitments. Many loan commitments and standby letters of credit expire without being funded in whole or in part. The Company had $35.6 million and $36.5 million of standby letters of credit at September 30, 2012 and December 31, 2011, respectively. Management believes that the proceeds obtained through a liquidation of collateral, the enforcement of guarantees and normal collection activities against the borrower would be sufficient to cover the potential amount of future payment required under the corresponding letters of credit. There was no current amount of liability at September 30, 2012 or December 31, 2011 under standby letters of credit issued.

In addition to standby letters of credit, in the normal course of business there are unadvanced loan commitments. At September 30, 2012, the Company had $451.2 million in total unused commitments, including the standby letters of credit. Management does not anticipate any material losses as a result of these transactions.