FMAR » Topics » (6) Credit Commitments

These excerpts taken from the FMAR 10-K filed Mar 31, 2009.

Credit Commitments

        Credit commitments are agreements to lend to a customer as long as there is no violation of any condition to the contract. Loan commitments generally have interest rates fixed at current market amounts, fixed expiration dates, and may require payment of a fee. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time. Letters of credit are commitments issued to guarantee the performance of a customer to a third party.

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        Our exposure to credit loss in the event of nonperformance by the borrower is the contract amount of the commitment. Loan commitments, lines of credit, and letters of credit are made on the same terms, including collateral, as outstanding loans. We are not aware of any accounting loss we would incur by funding our commitments.

        Outstanding loan commitments, unused lines of credit, and letters of credit were as follows at December 31, 2008:

(dollars in thousands)    
 

Commitments to extend credit

  $ 229,283  

Unused lines of credit

    105,257  

Letters of credit

    4,151  
       

  $ 338,691  
       

Credit Commitments



        Credit commitments are agreements to lend to a customer as long as there is no violation of any condition to the contract. Loan
commitments generally have interest rates fixed at current market amounts, fixed expiration dates, and may require payment of a fee. Lines of credit generally have variable interest rates. Such lines
do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time. Letters of credit are commitments issued to guarantee the
performance of a customer to a third party.



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        Our exposure to credit loss in the event of nonperformance by the borrower is the contract amount of the commitment. Loan commitments, lines of credit, and
letters of credit are made on the same terms, including collateral, as outstanding loans. We are not aware of any accounting loss we would incur by funding our commitments.




        Outstanding
loan commitments, unused lines of credit, and letters of credit were as follows at December 31, 2008:



























































(dollars in thousands)   
 

Commitments to extend credit

 $229,283 

Unused lines of credit

  105,257 

Letters of credit

  4,151 
    

 $338,691 
    




Credit Commitments



        Credit commitments are agreements to lend to a customer as long as there is no violation of any condition to the contract. Loan
commitments generally have interest rates fixed at current market amounts, fixed expiration dates, and may require payment of a fee. Lines of credit generally have variable interest rates. Such lines
do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time. Letters of credit are commitments issued to guarantee the
performance of a customer to a third party.



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        Our exposure to credit loss in the event of nonperformance by the borrower is the contract amount of the commitment. Loan commitments, lines of credit, and
letters of credit are made on the same terms, including collateral, as outstanding loans. We are not aware of any accounting loss we would incur by funding our commitments.




        Outstanding
loan commitments, unused lines of credit, and letters of credit were as follows at December 31, 2008:



























































(dollars in thousands)   
 

Commitments to extend credit

 $229,283 

Unused lines of credit

  105,257 

Letters of credit

  4,151 
    

 $338,691 
    




(6) Credit Commitments

        Commitments to extend credit are agreements to lend to customers, provided that terms and conditions established in the related contracts are met. At December 31, 2008 and 2007, we had commitments to originate first mortgage loans on real estate of approximately $166.894 million and $24.444 million, respectively, most of which were committed for sale in the secondary market.

        At December 31, 2008 and 2007, we also had commitments to loan funds under unused home equity lines of credit aggregating approximately $75.244 million and $79.660 million, respectively, and unused commercial lines of credit, retail checking lines of credit, as well as unfunded construction, commercial, and consumer commitments aggregating approximately $92.402 million and $96.656 million, respectively. Such commitments generally carry a fixed rate of interest, while home equity lines of credit are generally variable.

        Commitments for first mortgage loans generally expire within 60 days and are normally funded with loan principal repayments, excess liquidity, and deposits. Since certain commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent our future cash requirements.

        Substantially all outstanding commitments at December 31, 2008 and 2007 are for loans to be secured by real estate with appraised values in excess of the commitment amounts. Our exposure to credit loss under these contracts in the event of nonperformance by the other parties is represented by the commitment amounts, assuming the collateral has no value.

        Letters of credit are commitments issued to guarantee the performance of a customer to a third party. At December 31, 2008 and 2007, letters of credit totaled $4.151 million and $4.973 million, respectively.

(6) Credit Commitments



        Commitments to extend credit are agreements to lend to customers, provided that terms and conditions established in the related
contracts are met. At December 31, 2008 and 2007, we had commitments to originate first mortgage loans on real estate of approximately $166.894 million and $24.444 million,
respectively, most of which were committed for sale in the secondary market.



        At
December 31, 2008 and 2007, we also had commitments to loan funds under unused home equity lines of credit aggregating approximately $75.244 million and
$79.660 million, respectively, and unused commercial lines of credit, retail checking lines of credit, as well as unfunded construction, commercial, and consumer commitments aggregating
approximately $92.402 million and $96.656 million, respectively. Such commitments generally carry a fixed rate of interest, while home equity lines of credit are generally variable.



        Commitments
for first mortgage loans generally expire within 60 days and are normally funded with loan principal repayments, excess liquidity, and deposits. Since certain
commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent our future cash requirements.




        Substantially
all outstanding commitments at December 31, 2008 and 2007 are for loans to be secured by real estate with appraised values in excess of the commitment amounts. Our
exposure to credit loss under these contracts in the event of nonperformance by the other parties is represented by the commitment amounts, assuming the collateral has no value.



        Letters
of credit are commitments issued to guarantee the performance of a customer to a third party. At December 31, 2008 and 2007, letters of credit totaled
$4.151 million and $4.973 million, respectively.



(6) Credit Commitments



        Commitments to extend credit are agreements to lend to customers, provided that terms and conditions established in the related
contracts are met. At December 31, 2008 and 2007, we had commitments to originate first mortgage loans on real estate of approximately $166.894 million and $24.444 million,
respectively, most of which were committed for sale in the secondary market.



        At
December 31, 2008 and 2007, we also had commitments to loan funds under unused home equity lines of credit aggregating approximately $75.244 million and
$79.660 million, respectively, and unused commercial lines of credit, retail checking lines of credit, as well as unfunded construction, commercial, and consumer commitments aggregating
approximately $92.402 million and $96.656 million, respectively. Such commitments generally carry a fixed rate of interest, while home equity lines of credit are generally variable.



        Commitments
for first mortgage loans generally expire within 60 days and are normally funded with loan principal repayments, excess liquidity, and deposits. Since certain
commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent our future cash requirements.




        Substantially
all outstanding commitments at December 31, 2008 and 2007 are for loans to be secured by real estate with appraised values in excess of the commitment amounts. Our
exposure to credit loss under these contracts in the event of nonperformance by the other parties is represented by the commitment amounts, assuming the collateral has no value.



        Letters
of credit are commitments issued to guarantee the performance of a customer to a third party. At December 31, 2008 and 2007, letters of credit totaled
$4.151 million and $4.973 million, respectively.



These excerpts taken from the FMAR 10-K filed Mar 14, 2008.

(6) Credit Commitments

        Commitments to extend credit are agreements to lend to customers, provided that terms and conditions established in the related contracts are met. At December 31, 2007 and 2006, we had commitments to originate first mortgage loans on real estate of approximately $24.444 million and $57.333 million, respectively, most of which were committed for sale in the secondary market.

        At December 31, 2007 and 2006, we also had commitments to loan funds under unused home equity lines of credit aggregating approximately $79.660 million and $78.767 million, respectively, and unused commercial lines of credit, retail checking lines of credit, as well as unfunded construction commitments aggregating approximately $96.656 million and $158.127 million, respectively. Such commitments generally carry a fixed rate of interest, while home equity lines of credit are generally variable.

        Commitments for first mortgage loans generally expire within 60 days and are normally funded with loan principal repayments, excess liquidity, and deposits. Since certain commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent our future cash requirements.

        Substantially all outstanding commitments at December 31, 2007 and 2006 are for loans to be secured by real estate with appraised values in excess of the commitment amounts. Our exposure to credit loss under these contracts in the event of nonperformance by the other parties is represented by the commitment amounts, assuming the collateral has no value.

        Letters of credit are commitments issued to guarantee the performance of a customer to a third party. At December 31, 2007 and 2006, letters of credit totaled $4.973 million and $4.677 million, respectively.

        We have established a reserve for potential loan repurchases in the amount of $325,000 as of December 31, 2007, which is included in other liabilities. This amount reflects the anticipated settlement of an outstanding repurchase claim with one of the Company's significant investors of bank-originated mortgages. The settlement, if reached, will extinguish current outstanding claims of the investor which existed as of December 31, 2007. Management is not aware of any other material repurchase claims in existence as of December 31, 2007.

(6) Credit Commitments



        Commitments to extend credit are agreements to lend to customers, provided that terms and conditions established in the related contracts are met. At
December 31, 2007 and 2006, we had commitments to originate first mortgage loans on real estate of approximately $24.444 million and $57.333 million, respectively, most of which
were committed for sale in the secondary market.



        At
December 31, 2007 and 2006, we also had commitments to loan funds under unused home equity lines of credit aggregating approximately $79.660 million and
$78.767 million, respectively, and unused commercial lines of credit, retail checking lines of credit, as well as unfunded construction commitments aggregating approximately
$96.656 million and $158.127 million, respectively. Such commitments generally carry a fixed rate of interest, while home equity lines of credit are generally variable.




        Commitments
for first mortgage loans generally expire within 60 days and are normally funded with loan principal repayments, excess liquidity, and deposits. Since certain
commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent our future cash requirements.



        Substantially
all outstanding commitments at December 31, 2007 and 2006 are for loans to be secured by real estate with appraised values in excess of the commitment amounts. Our
exposure to credit loss under these contracts in the event of nonperformance by the other parties is represented by the commitment amounts, assuming the collateral has no value.




        Letters
of credit are commitments issued to guarantee the performance of a customer to a third party. At December 31, 2007 and 2006, letters of credit totaled
$4.973 million and $4.677 million, respectively.



        We
have established a reserve for potential loan repurchases in the amount of $325,000 as of December 31, 2007, which is included in other liabilities. This amount reflects the
anticipated settlement of an outstanding repurchase claim with one of the Company's significant investors of bank-originated mortgages. The settlement, if reached, will extinguish current
outstanding claims of the investor which existed as of December 31, 2007. Management is not aware of any other material repurchase claims in existence as of December 31, 2007.



This excerpt taken from the FMAR 10-K filed Mar 16, 2007.

(5)  Credit Commitments

Commitments to extend credit are agreements to lend to customers, provided that terms and conditions established in the related contracts are met. At December 31, 2006 and 2005, we had commitments to originate first mortgage loans on real estate of approximately $57.333 million and $97.067 million, respectively, most of which were committed for sale in the secondary market.

At December 31, 2006 and 2005, we also had commitments to loan funds under unused home equity lines of credit aggregating approximately $78.767 million and $73.486 million, respectively, and unused commercial lines of credit, retail checking lines of credit, as well as unfunded construction commitments

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aggregating approximately $158.127 million and $204.391 million, respectively. Such commitments generally carry a fixed rate of interest, while home equity lines of credit are generally variable.

Commitments for first mortgage loans generally expire within 60 days and are normally funded with loan principal repayments, excess liquidity and deposits. Since certain commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent our future cash requirements.

Substantially all outstanding commitments at December 31, 2006 and 2005 are for loans to be secured by real estate with appraised values in excess of the commitment amounts. Our exposure to credit loss under these contracts in the event of non-performance by the other parties is represented by the commitment amounts, assuming the collateral has no value.

Letters of credit are commitments issued to guarantee the performance of a customer to a third party. At December 31, 2006 and 2005, letters of credit totaled $4.677 million and $4.825 million, respectively.

This excerpt taken from the FMAR 10-K filed Mar 16, 2006.
Credit Commitments.   Credit commitments are agreements to lend to a customer as long as there is no violation of any condition to the contract. Loan commitments generally have interest rates fixed at current market amounts, fixed expiration dates, and may require payment of a fee. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time. Letters of credit are commitments issued to guarantee the performance of a customer to a third party.

Outstanding loan commitments, unused lines of credit, and letters of credit were as follows at December 31, 2005:

(dollars in thousands)

 

 

 

Commitments to extend credit

 

$

257,356

 

Unused lines of credit

 

117,588

 

Letters of credit

 

4,825

 

 

 

$

379,769

 

 

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Our exposure to credit loss in the event of nonperformance by the borrower is the contract amount of the commitment. Loan commitments, lines of credit, and letters of credit are made on the same terms, including collateral, as outstanding loans. We are not aware of any accounting loss we would incur by funding our commitments.

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