Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

v3.8.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
Note 15 – Commitments and Contingencies
 
The Bancorp is a party to financial instruments in the normal course of business to meet the financing needs of its customers. These financial instruments, which include commitments to make loans and standby letters of credit, are not reflected in the accompanying consolidated financial statements. Such financial instruments are recorded when they are funded.
 
The Bancorp’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to originate loans and standby letters of credit is represented by the contractual amount of those instruments. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. The Bancorp uses the same credit policy to make such commitments as it uses for on-balance sheet items. Since commitments to make loans may expire without being used, the amount does not necessarily represent future cash commitments.
 
The Bancorp had outstanding commitments to originate loans as follows:
 
 
 
(Dollars in thousands)
 
 
 
Fixed
 
 
Variable
 
 
 
 
 
 
Rate
 
 
Rate
 
 
Total
 
December 31, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
70
 
 
$
7,678
 
 
$
7,748
 
Home equity
 
 
31,008
 
 
 
1,838
 
 
 
32,846
 
Commercial real estate
 
 
1,351
 
 
 
6,866
 
 
 
8,217
 
Construction and land development
 
 
8,074
 
 
 
21,105
 
 
 
29,179
 
Multifamily
 
 
174
 
 
 
322
 
 
 
496
 
Consumer
 
 
16,469
 
 
 
-
 
 
 
16,469
 
Commercial business
 
 
1,103
 
 
 
41,381
 
 
 
42,484
 
Government
 
 
-
 
 
 
-
 
 
 
-
 
Total
 
$
58,249
 
 
$
79,190
 
 
$
137,439
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016:
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
82
 
 
$
7,683
 
 
$
7,765
 
Home equity
 
 
25,896
 
 
 
2,839
 
 
 
28,735
 
Commercial real estate
 
 
1,426
 
 
 
5,973
 
 
 
7,399
 
Construction and land development
 
 
5,838
 
 
 
8,029
 
 
 
13,867
 
Multifamily
 
 
6,168
 
 
 
192
 
 
 
6,360
 
Consumer
 
 
15,332
 
 
 
-
 
 
 
15,332
 
Commercial business
 
 
1,088
 
 
 
41,474
 
 
 
42,562
 
Government
 
 
-
 
 
 
-
 
 
 
-
 
Total
 
$
55,830
 
 
$
66,190
 
 
$
122,020
 
 
The approximately $58.2 million in fixed rate commitments outstanding at December 31, 2017 had interest rates ranging from 2.99% to 10.00%, for a period not to exceed forty-five days. At December 31, 2016, fixed rate commitments outstanding of approximately $55.8 million had interest rates ranging from 2.99% to 10.00%, for a period not to exceed forty-five days. Mortgage interest rate locks with borrowers which are included with real estate commitments, were treated as derivative transactions.
   
Standby letters of credit are conditional commitments issued by the Bancorp to guarantee the performance of a customer to a third party. At December 31, 2017 and 2016, the Bancorp had standby letters of credit totaling approximately $9.9 million and $7.8 million, respectively which are not included in the tables above. The Bancorp evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bancorp upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral obtained may include accounts receivable, inventory, property, land or other assets.