Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

v3.10.0.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
Note 16 –
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, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
106
 
 
$
10,812
 
 
$
10,918
 
Home equity
 
 
35,571
 
 
 
5,960
 
 
 
41,531
 
Commercial real estate
 
 
6,397
 
 
 
9,258
 
 
 
15,655
 
Construction and land development
 
 
18,355
 
 
 
35,222
 
 
 
53,577
 
Multifamily
 
 
4,151
 
 
 
389
 
 
 
4,540
 
Consumer
 
 
18,862
 
 
 
-
 
 
 
18,862
 
Commercial business
 
 
1,655
 
 
 
44,935
 
 
 
46,590
 
Government
 
 
-
 
 
 
-
 
 
 
-
 
Total
 
$
85,097
 
 
$
106,576
 
 
$
191,673
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
The approximately $85.1 million in fixed rate commitments outstanding at December 31, 2018 had interest rates ranging from 2.99% to 10.00%, for a period not to exceed forty-five days. At December 31, 2017, fixed rate commitments outstanding of approximately $58.2 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, 2018 and 2017, the Bancorp had standby letters of credit totaling approximately $9.7 million and $9.9 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.