COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2012

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

12. COMMITMENTS AND CONTINGENCIES

At December 31, 2012, future annual minimum rental payments due under non-cancellable operating leases are as follows (in thousands):

2013	$	2,264
2014		2,125
2015		1,956
2016		1,701
2017		1,566
Thereafter		11,611
	$	21,223

Rental expense under operating leases for 2012, 2011, and 2010 was approximately $2.5 million, $2.0 million, and $1.7 million, respectively.

The Company is party to various legal proceedings arising in the ordinary course of business. In management's opinion, the ultimate resolution of these legal proceedings will not have a material adverse effect on the Company's financial position, results of operations, or cash flows.

At December 31, 2012, the Company had borrowing lines available through the Bank with the FHLB of Dallas and other correspondent banks.  The Bank had approximately $206.1 million available, subject to available collateral, under a secured line of credit with the FHLB of Dallas.  Additional federal funds lines of credit were available through correspondent banks with approximately $48.5 million available for overnight borrowing at December 31, 2012.  The Bank also had a credit line available through the Federal Reserve of $158.1 million.  As of December 31, 2012, the Company had no borrowings with the FRB-Atlanta.  The Company assumed at fair value $27.1 million in FHLB advances and $2.0 million in notes payable with FNBB from PSB.