Financial Instruments With Off Balance Sheet Risk

12 Months Ended

Dec. 31, 2011

Financial Instruments With Off Balance Sheet Risk [Abstract]

Financial Instruments With Off Balance Sheet Risk [Text Block]

NOTE 12 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet financing needs of its clients. These financial instruments include commitments to make loans, unused lines of credit, and letters of credit. The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Bank follows the same credit policy to make such commitments as is followed for loans and investments recorded in the consolidated financial statements. The Bank's commitments to extend credit are agreements at predetermined terms, as long as the client continues to meet specified criteria, with fixed expiration dates or termination clauses.

The following table shows the commitments to make loans and the unused lines of credit available to clients at December 31:

	2011				2010
In thousands of dollars	Variable Rate		Fixed Rate		Variable Rate		Fixed Rate
Commitments to make loans	$	21,309	$	7,017	$	1,729	$	2,566
Unused lines of credit		96,948		4,116		88,973		3,236
Standby letters of credit		10,262		-		10,718		-

Commitments to make loans generally expire within thirty to ninety days, while unused lines of credit expire at the maturity date of the individual loans. At December 31, 2011, the rates for amounts in the fixed rate category ranged from 3.25% to 7.00%.

In 2001, United Bank & Trust entered into a limited partnership agreement to purchase tax credits awarded from the construction, ownership and management of an affordable housing project and a residual interest in the real estate. As of December 31, 2011 and 2010, the total recorded investment including the obligation to make additional future investments were $900,000 and $1,014,000 respectively, and was included in other assets. As of December 31, 2011 and 2010, the obligation of UBT to the limited partnership was $457,000 and $664,000, respectively, which was reported in other liabilities. While UBT is a 99% partner, the investment is accounted for on the equity method as UBT is a limited partner and has no control over the operation and management of the partnership or the affordable housing project.