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## Derivative Instruments 

From time to time, the Company enters into interest rate swaps to meet the financing, interest rate and equity risk management needs of its customers. The carrying amounts of these derivative instruments represent their fair value. 

## Off-balance sheet Instruments 

The fair values of the Company’s off-balance-sheet financial instruments are based on fees charged to enter into similar agreements. However, commitments to extend credit do not represent a significant value to the Company until such commitments are funded. The Company has determined that the estimated fair value of commitments to extend credit approximates the carrying amount and is immaterial to the financial statements. 

The carrying value and related estimated fair value of the Company’s financial instruments at December 31, 2011 and 2010 are presented below. 

<img src='content_image/280365.jpg'>

## NOTE 19: RELATED PARTY TRANSACTIONS 

A director of the Company is an officer in a construction company that the Company contracted with during 2011 and 2008 for the construction of two new branch facilities. Total payments made to the construction company under the terms of the construction contracts were $844 thousand and $587 thousand for the years ended December 31, 2011 and December 31, 2009, respectively. No payments were made to the construction company for the year ended December 31, 2010. 

Another executive officer and director of the Company is the owner of a heating and air conditioning company that the Company contracted with during 2011 for the replacement and improvement of the heating and cooling systems in the Bank’s 23,000 square foot operations center. Total payments made to the heating and air conditioning company under the terms of the contract were $200 thousand for the year ended December 31, 2011. 

The Bank has made, and expects in the future to continue to make in the ordinary course of business, loans to directors and executive officers of the Company, the Bank, and their affiliates. In management’s opinion, these loans were made in the ordinary course of business at normal credit terms, including interest rate and collateral requirements, and do not represent more than normal credit risk. An analysis of such outstanding loans is presented below. 

<img src='content_image/280366.jpg'>

During 2011 and 2010, certain executive officers and directors of the Company and the Bank, including companies with which they are affiliated, were deposit customers of the bank. Total deposits for these persons at December 31, 2011 and 2010 amounted to $18.4 million and $18.7 million, respectively. 

