Commitements, Contingencies and Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2011

Commitments, Contingencies and Concentrations of Credit Risk

Commitments, Contingencies and Concentrations of Credit Risk

Note 12 — Commitments, Contingencies and Concentrations of Credit Risk

In the normal course of business, the Corporation has outstanding commitments and contingent liabilities, such as standby and commercial letters of credit, unused portions of lines of credit and commitments to extend various types of credit. Commitments to extend credit and standby letters of credit generally do not exceed one year.

These financial instruments involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the consolidated financial statements. The commitment or contract amount of these financial instruments is an indicator of the Corporation's level of involvement in each type of instrument as well as the exposure to credit loss in the event of non-performance by the other party to the financial instrument.

The Corporation controls the credit risk of these financial instruments through credit approvals, limits and monitoring procedures. To minimize potential credit risk, the Corporation generally requires collateral and other credit-related terms and conditions from the customer. In the opinion of management, the financial condition of the Corporation will not be materially affected by the final outcome of these commitments and contingent liabilities.

A substantial portion of the Bank's loans are secured by real estate located in New Jersey. Accordingly, the collectability of a substantial portion of the loan portfolio of the Bank is susceptible to changes in the real estate market.

The following table provides a summary of financial instruments with off-balance sheet risk at December 31, 2011 and 2010:

	2011		2010
	(Dollars in Thousands)
Commitments under commercial loans and lines of credit	$	90,866	$	77,786
Home equity and other revolving lines of credit		49,203		50,131
Outstanding commercial mortgage loan commitments		32,938		32,554
Standby letters of credit		1,800		2,225
Performance letters of credit		20,482		12,019
Outstanding residential mortgage loan commitments		—		250
Overdraft protection lines		5,850		4,898
Other consumer		—		—
Total	$	201,139	$	179,863

Other expenses include rentals for premises and equipment of $710,000 in 2011, $692,000 in 2010 and $704,000 in 2009. At December 31, 2011, the Corporation was obligated under a number of non-cancelable leases for premises and equipment, many of which provide for increased rentals based upon increases in real estate taxes and the cost of living index. These leases, most of which have renewal provisions, are principally operating leases. Minimum rentals under the terms of these leases for the years 2012 through 2016 are $625,000, $500,000, $533,000, $538,000 and $408,000, respectively. Minimum rentals due 2017 and after are $3,911,000.

The Corporation is subject to claims and lawsuits that arise in the ordinary course of business. Based upon the information currently available in connection with such claims, it is the opinion of management that the disposition or ultimate determination of such claims will not have a material adverse impact on the consolidated financial position, results of operations, or liquidity of the Corporation.