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COMMITMENTS WITH OFF-BALANCE SHEET RISK
12 Months Ended
Jun. 30, 2012
Commitments With Off Balance Sheet Risk Disclosure [Abstract]  
Commitments With Off-Balance Sheet Risk Disclosure [Text Block]

NOTE 12—COMMITMENTS WITH OFF-BALANCE SHEET RISK

 

The Bank is a party to commitments to extend credit in the normal course of business to meet the financing needs of its customers. Commitments are agreements to lend to customers providing there are no violations of any condition established in the contract. Commitments to extend credit have a fixed expiration date or other termination clause. These instruments involve elements of credit and interest rate risk more than the amount recognized in the statements of financial position. The Bank uses the same credit policies in making commitments to extend credit as it does for on-balance sheet instruments.

 

The Bank evaluates each customer’s credit on a case by case basis. The amount of collateral obtained is based on management’s credit evaluation of the customer. The amount of commitments to extend credit and the exposure to credit loss for non-performance by the customer was $33,808 and $27,528 as of June 30, 2012 and 2011, respectively. Of the June 30, 2012 commitments, $28,978 carried variable rates of interest ranging from 2.00% to 7.25% and $4,830 carried fixed rates of interest ranging from 2.25% to 8.50%. Of the June 30, 2011 commitments, $25,119 carried variable rates of interest ranging from 2.00% to 7.25% and $2,409 carried fixed rates of interest ranging from 2.75% to 7.75%. Financial standby letters of credit were $645 and $579 as of June 30, 2012 and 2011, respectively. In addition, commitments to extend credit of $8,029 and $7,759 as of June 30, 2012 and 2011, respectively, were available to checking account customers related to the overdraft protection program. Since some loan commitments expire without being used, the amount does not necessarily represent future cash commitments.