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Note 11 - Commitments Guarantees, and Contingent Liabilities
 6 Months Ended
Jun. 30, 2012
Commitments Contingencies and Guarantees [Text Block]
11.  COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES

Credit Commitments and Guarantees

In the normal course of business, the Company enters into a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers and to conduct lending activities. These instruments include commitments to extend credit and standby and commercial letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition.

On May 17, 2012, the Company entered into a $200.0 million forward committed advance with the FHLB scheduled to settle on May 19, 2014 and mature on May 20, 2019. The Company entered into this commitment to take advantage of the current low market rates for future funding. The Company will pay a fixed interest rate of 2.05% to the FHLB if and when the advance is funded.

Contractual or Notional Amounts of Financial Instruments

(Dollar amounts in thousands)

   
June 30,
2012
   
December 31,
2011
 
Commitments to extend credit:
           
Commercial and industrial
  $ 641,637     $ 609,601  
Commercial real estate
    157,964       139,574  
Home equity lines
    253,449       257,315  
1-4 family real estate construction
    16,477       13,300  
Credit card lines
    23,522       21,257  
Overdraft protection program (1)
    175,260       178,699  
All other commitments
    81,712       129,015  
Total commitments
  $ 1,350,021     $ 1,348,761  
Letters of credit:
               
1-4 family real estate construction
  $ 7,039     $ 8,661  
Commercial real estate
    53,211       49,373  
All other
    49,020       58,532  
Total letters of credit
  $ 109,270     $ 116,566  
Unamortized fees associated with letters of credit (2)
  $ 516     $ 668  
Remaining weighted-average term (in months)
    13.39       9.62  
Remaining lives (in years)
 
0.1 to 12.1
   
0.1 to 12.6
 

(1)
Federal regulation regarding electronic fund transfers requires consumers to affirmatively consent to the institution’s overdraft service for automated teller machine and one-time debit card transactions before overdraft fees may be assessed on the account. Consumers are provided a specific line for the amount they may overdraw.
(2)
Included in other liabilities in the Consolidated Statements of Financial Condition. The Company will amortize these amounts into income over the commitment period.

Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party and are most often issued in favor of a municipality where construction is taking place to ensure the borrower adequately completes the construction.

The maximum potential future payments guaranteed by the Company under standby letters of credit arrangements are equal to the contractual amount of the commitment. If a commitment is funded, the Company may seek recourse through the liquidation of the underlying collateral including real estate, production plants and property, marketable securities, or receipt of cash.

Legal Proceedings

In August 2011, the Bank was named in a purported class action lawsuit filed in the Circuit Court of Cook County, Illinois on behalf of certain of the Bank’s customers who incurred overdraft fees. The complaint has been amended several times with the most recent amendment filed in March 2012. The Bank filed a motion to dismiss the lawsuit in May 2012, which is pending. The lawsuit is based on the Bank’s practices pursuant to debit card transactions, and alleges, among other things, that these practices resulted in customers being unfairly assessed overdraft fees. The lawsuit seeks an unspecified amount of damages and other relief, including restitution.

The Company believes that the complaint contains significant inaccuracies and factual misstatements and that the Bank has meritorious defenses. As a result, the Bank intends to vigorously defend itself against the allegations in the lawsuit.

As of June 30, 2012, there were certain other legal proceedings pending against the Company and its subsidiaries in the ordinary course of business. The Company does not believe that liabilities, individually or in the aggregate, arising from legal proceedings, if any, would have a material adverse effect on the consolidated financial condition of the Company as of June 30, 2012.