Commitments, Contingencies and Off-Balance Sheet Risk

9 Months Ended

Sep. 30, 2012

Commitments Contingencies and Off Balance Sheet Risk [Abstract]

Commitments, Contingencies and Off-Balance Sheet Risk

(7) Commitments, Contingencies and Off-Balance Sheet Risk

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection are issued to meet customers’ financing needs. These are agreements to provide credit or to support the credit of others, as long as the conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of commitment. The contractual amount of financial instruments with off-balance-sheet risk was as follows for September 30, 2012 and December 31, 2011:

	Contract Amount
	September 30, 2012				December 31, 2011
	Fixed		Variable		Fixed		Variable
	Rate		Rate		Rate		Rate
Commitment to extend credit:
Lines of credit and construction loans	$	13,274	$	118,110	$	6,913	$	111,710
Overdraft protection		1,294		18,381		1,320		17,828
Letters of credit		294		406		200		424
	$	14,862	$	136,897	$	8,433	$	129,962

Commitments to make loans are generally made for a period of one year or less. Fixed rate loan commitments included in the table above had interest rates ranging from 2.25% to 15.0% at September 30, 2012 and December 31, 2011, respectively. Maturities extend up to 30 years.

Citizens is required to maintain certain reserve balances on hand in accordance with the Federal Reserve Board requirements. The average reserve balance maintained in accordance with such requirements was $1,240 on September 30, 2012 and $998 on December 31, 2011.