Note 19 - Commitments, Guarantees and Other Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

19.     Commitments, Guarantees and Other Contingencies

Unused lending commitments to clients are not recorded in the Consolidated Balance Sheets until funds are advanced. For commercial clients, lending commitments generally take the form of unused revolving credit arrangements to finance clients’ working capital requirements. For retail clients, lending commitments are generally unused lines of credit secured by residential property. The Company routinely extends lending commitments for both floating and fixed-rate loans.

The following table summarizes the contractual amounts of the Company’s unused lending commitments relating to extensions of credit with off-balance sheet risk at December 31, 2013 (in thousands).

Commitments to extend credit:
Revolving, open-end loans secured by single-family residential properties	$	59,183
Commercial real estate, construction and land development loans secured by real estate
Single-family residential construction loans		11,186
Commercial real estate, other construction loan, and land development loans		20,317
Commercial and industrial loans		37,461
Overdraft protection loans		30,015
Other		6,875
Total commitments to extend credit	$	165,037

Standby letters of credit are issued for clients in connection with contracts between clients and third parties. Letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third party. The maximum potential amount of undiscounted future advances related to letters of credit was $3.7 million and $3.6 million at December 31, 2013 and 2012, respectively.

The reserve for estimated credit losses on unfunded lending commitments at December 31, 2013 and 2012 was $259 thousand and $367 thousand, respectively, and is recorded in Other liabilities in the Consolidated Balance Sheets.

For disclosure regarding our derivative financial instruments and hedging activities, see Note 20, Derivative Financial Instruments and Hedging Activities.

Loan Participations

The Company periodically sells portions of loans extended to clients in order to manage overall credit concentrations under loan participation agreements. With regard to loan participations, the Company serves as the lead bank and is, therefore, responsible for certain administrative and other management functions as agent to the participating banks. The participation agreements include certain standard representations and warranties related to the Company’s duties to the participating banks.

Contractual Obligations

In addition to other contractual commitments and arrangements disclosed herein, the Company enters into other contractual obligations in the ordinary course of business. The following table summarizes these contractual obligations at December 31, 2013 (in thousands) except obligations for teammate benefit plans for which obligations are paid from separately identified assets. For disclosure regarding obligations of teammate benefit plans, see Note 16, Benefit Plans.

	Less than one year		Over one through three years		Over three through five years		Over five years		Total
Real property operating lease obligations	$	1,738	$	3,381	$	3,306	$	8,785	$	17,210
Time deposit accounts		140,297		34,344		22,139		55		196,835
Contractually required interest payments on time deposits		189		169		121		1		480
Total	$	142,224	$	37,894	$	25,566	$	8,841	$	214,525

Obligations under noncancelable real property operating lease agreements noted above are payable over several years with the longest obligation expiring in 2029. Option periods that the Company has not yet exercised are not included in the preceding table.

In 2012, the Company reduced the Bank’s branch network by four branches through sale or consolidation into existing branches. In conjunction with these branch reductions, one branch lease was assigned to the purchaser of the branch as of July 1, 2012, although the Bank remains as a named party to the lease in the event the purchaser fails to satisfy its obligations. Future lease payments related to this facility to be made by the purchaser total $77 thousand through September 2015. These payments are the primary responsibility of the sublessee, and, therefore, have been excluded from the preceding table.

Though not included in the preceding table, the Company is contractually obligated to make minimum required contributions to the Pension Plan, however, these contributions are determined annually and, therefore, future obligations beyond 2014 cannot be reasonably estimated at this time. For disclosure regarding contributions that the Company expects to contribute to the Pension Plan during 2014, see Note 16, Benefit Plans.

In March 2013, the Bank signed a subscription agreement for a $2.0 million limited partnership investment in Plexus Fund III, L.P. (the “Fund”). The Fund closed on May 1, 2013, raising commitments of $150 million of private limited partnership interests (of which the Bank committed to invest up to $2.0 million) and $150 million of funding commitments from the Small Business Administration in the form of 10-year debentures. The fund is licensed as a Small Business Investment Company under the Small Business Investment Act of 1958. The principal objective of the Fund is the realization of current yield and long-term capital appreciation through mezzanine and equity investments in a diversified portfolio of companies located throughout the United States. The Fund focuses primarily on investments in “lower middle-market companies.” Earnings from the fund will come from returns generated from the underlying investments, less management and other fees payable to the Fund. Capital calls on limited partners may occur through the fifth anniversary of the Fund’s closing (May 1, 2018) at the sole general partner’s discretion on an as-needed basis. During 2013, the Bank invested $350 thousand into the Fund in connection with its capital call obligation. As of December 31, 2013, $1.7 million remains to be invested by the Bank. Because the timing of capital calls is not definitive at this point, they have been excluded from the preceding table.

The Company enters into agreements with third parties with respect to the leasing, servicing, and maintenance of equipment. However, because we believe that these agreements are immaterial when considered individually, or in the aggregate, with regard to our Consolidated Financial Statements, we have not included such agreements in the preceding contractual obligations table. Therefore, we believe that noncompliance with terms of such agreements would not have a material impact on our business, financial condition, results of operations or cash flows. Furthermore, as most such commitments are entered into for a 12-month period with option extensions, long-term obligations beyond 2014 cannot be reasonably estimated at this time.

Legal Proceedings

The Company is a party to claims and lawsuits arising in the course of normal business activities. Management is not aware of any material pending legal proceedings against the Company which, if resolved adversely, would have a material adverse impact on the Company’s financial position, results of operations or cash flows.