Commitments And Contingent Liabilities

12 Months Ended

Dec. 31, 2012

Commitments And Contingent Liabilities [Abstract]

Commitments And Contingent Liabilities

NOTE 20 - Commitments and Contingent Liabilities

Rental expense under leases for equipment and premises was $957,000, $953,000, and $1.1 million in 2012, 2011, and 2010, respectively.  Required minimum rentals on non-cancelable leases as of December 31, 2012, are as follows:

(In Thousands)
2013	$	556
2014		588
2015		518
2016		485
2017		312
Thereafter		3,813
Total	$	6,272

Rental income under leases was $773,000, $776,000 and $810,000 in 2012, 2011, and 2010, respectively.  There are no future required minimum rentals on non-cancelable leases as of December 31, 2012.

The Company is self-insured for medical, dental, and vision plan benefits provided to employees.  The Company has obtained stop-loss insurance to limit total medical claims in any one year to $100,000 per covered individual and $1 million for all medical claims incurred by an individual.  The Company has established a liability for outstanding incurred but unreported claims.  While management uses what it believes are pertinent factors in estimating the liability, it is subject to change due to claim experience, type of claims, and rising medical costs.

Off-Balance Sheet Financial Instruments:In the ordinary course of business, the Company enters into various types of transactions that involve financial instruments with off-balance sheet risk.  These instruments include commitments to extend credit and standby letters of credit and are not reflected in the accompanying balance sheets.  These transactions may involve to varying degrees credit and interest rate risk in excess of the amount, if any, recognized in the balance sheets.  Management does not anticipate any loss as a result of these commitments.

The Company’s off-balance sheet credit risk exposure is the contractual amount of commitments to extend credit and standby letters of credit.  The Company applies the same credit standards to these contracts as it uses in its lending process.

(In Thousands)	2012		2011
Off-balance sheet commitments:
Commitments to extend credit	$	208,328	$	173,834
Standby letters of credit	$	22,132	$	16,172

Commitments to extend credit are agreements to lend to customers.  These commitments have specified interest rates and generally have fixed expiration dates but may be terminated by the Company if certain conditions of the contract are violated.  Although currently subject to draw down, many of the commitments do not necessarily represent future cash requirements.  Collateral held relating to these commitments varies, but generally includes real estate, inventory, accounts receivable, and equipment.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Credit risk arises in these transactions from the possibility that a customer may not be able to repay the Company upon default of performance.  Collateral held for standby letters of credit is based on an individual evaluation of each customer’s creditworthiness.

The Company has established a reserve for losses related to these commitments and letters of credit that is recorded in other liabilities on the consolidated balance sheets.