Financial Instruments with Off-Balance Sheet Risk
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12 Months Ended |
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Dec. 31, 2014
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Fair Value Disclosures [Abstract] | |
Financial Instruments with Off-Balance Sheet Risk | Financial Instruments with Off-Balance Sheet Risk We make commitments to extend credit in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit in the form of loans or through standby letters of credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being fully drawn upon, the total commitment amount does not necessarily represent future cash requirements. We are exposed to credit loss equal to the contract amount of the commitment in the event of nonperformance by the borrower. We use the same credit policies in making commitments as we do for on-balance-sheet instruments and we evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us, is based on Management's credit evaluation of the borrower. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and real property. The contractual amount of loan commitments and standby letters of credit not reflected on the consolidated statements of condition was $349.3 million at December 31, 2014. This amount included $173.3 million under commercial lines of credit (these commitments are contingent upon customers maintaining specific credit standards), $115.6 million under revolving home equity lines, $2.1 million under standby letters of credit, $46.7 million under undisbursed construction loans, and a remaining $11.6 million under personal and other lines of credit. In 2014 we refined our methodology for estimating allowance for losses on off-balance sheet commitments, which totaled $1.0 million as of December 31, 2014. Approximately 37% of the commitments expire in 2015, approximately 45% expire between 2016 and 2022 and approximately 18% expire thereafter. |