Derivatives

12 Months Ended

Dec. 31, 2011

Derivative instruments and hedging activities disclosure abstract

Derivative Instruments And Hedging Activities Disclosure Text Block

NOTE 15: DERIVATIVE INSTRUMENTS

Financial derivatives are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. For derivatives not designated as part of a hedging relationship, the gain or loss is recognized in current earnings. From time to time, the Company may enter into interest rate swaps (“swaps”) to facilitate customer transactions and meet their financing needs. Upon entering into these instruments to meet customer needs, the Company enters into offsetting positions in order to minimize the risk to the Company. These swaps qualify as derivatives, but are not designated as hedging instruments. At December 31, 2011, the Company had no derivative contracts to assist in managing its interest rate sensitivity.

Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty or customer owes the Company, and results in credit risk to the Company. When the fair value of a derivative instrument contract is negative, the Company owes the customer or counterparty and therefore, has no credit risk.

A summary of the Company's interest rate swaps as of and for the year end December 31, 2011is presented below.

							Other
				Other	Other		noninterest
				Assets	Liabilities		income
				Estimated	Estimated		Gains
(Dollars in thousands)			Notional	Fair Value	Fair Value		(Losses)
Interest rate swap agreements:
Pay fixed / receive variable		$	5,717	—	1,325	$	(224)
Pay variable / receive fixed			5,717	1,325	—		224
	Total interest rate swap agreements	$	11,434	1,325	1,325	$	—