Financial Instruments With Off-Balance Sheet Risk and Credit Risk
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2014
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments With Off-Balance Sheet Risk and Credit Risk [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments With Off-Balance Sheet Risk and Credit Risk | Note 10 – Financial Instruments with Off-Balance Sheet Risk and Credit Risk The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit and standby letters of credit. In addition to the amounts shown below, the Company has extended commitment letters at December 31, 2014 in the amount of $23.280 million to various borrowers. At December 31, 2013, commitment letters totaled $12.364 million. Commitment letters are done in the normal course of business and typically expire after 120 days. All of these off-balance-sheet instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet, although material losses are not anticipated. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company'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 notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The totals for financial instruments whose contract amount represents credit risk are shown below:
Standby letters of credit are conditional commitments by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions.The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds real estate and bank deposits as collateral supporting those commitments for which collateral is deemed necessary. The Company has approximately $100 thousand in deposits in other financial institutions in excess of amounts insured by the FDIC at December 31, 2014. |