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Commitments and Contingencies
 6 Months Ended
Jun. 30, 2011
Commitments and Contingencies
17.
Commitments and Contingencies

The Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business.  While the outcome of these matters is currently not determinable, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s condensed consolidated financial position, results of operations, or cash flows.

On August 18, 2010, the Bank was sued in an asserted class action lawsuit.  The lawsuit alleges that, in 2004, F&M Holding Company (acquired by the Bank in 2006), acting as trustee, inappropriately disbursed the proceeds of three bond issuances, allegedly resulting years later in the bondholders’ loss of their collective investment of approximately $23.5 million.  Recovery is sought on claims of breach of the indentures, breach of fiduciary duty, and conversion.  In November 2010, the lawsuit was dismissed without prejudice for a lack of subject matter jurisdiction in federal court.

In addition, in November 2010 a bankruptcy trustee filed an adversary proceeding against the Bank.  The bankruptcy trustee claims that the Bank violated the automatic stay by taking control of approximately $250,000 in the bankrupt entity’s accounts shortly after the bankruptcy filing, and, as a result, the Bank owes sanctions and damages.  Under an order of the bankruptcy court, the adversary proceeding is stayed, and the Bank need not respond to the bankruptcy trustee’s claims and allegations pending a further court order.

While the outcome of these actions cannot be predicted with certainty, based on management's review, management believes that the lawsuit and the adversary proceedings are without merit and plans to vigorously pursue its defenses.  Management also believes that if any liability were to result, it would not have a material adverse effect on the Company's consolidated financial condition or results of operations.