Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

(a)Leasing Arrangements: The Company is obligated under a number of non-cancelable operating leases for land and buildings.  The majority of these leases have renewal options.  In addition, some o the leases contain escalation clauses tied to the consumer price index with caps.

At December 31, 2013, the Company’s future minimum rental payments required under land, buildings and equipment operating leases that have initial or remaining non-cancelable lease terms of one year or more are as follows:

(dollars in thousands)	2014		2015		2016		2017		2018		Thereafter		Total
Minimum payments	$	1,392	$	1,285	$	1,182	$	1,107	$	922	$	1,683	$	7,571

Rent expense applicable to operating leases was $1.7 million for the year ended December 31, 2013 and $1.5 million for the years ended December 31, 2012 and 2011.

(b)Commitments to Extend Credit: Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The amount of collateral obtained, if it is deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counter party.  Collateral held varies, but may include: property, plant and equipment; accounts receivable; inventory; and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party.  Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions.  Except for certain long-term guarantees, the majority of guarantees expire in one year.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.  Collateral supporting those commitments, for which collateral is deemed necessary, generally amounts to one hundred percent of the commitment amount at December 31, 2013.

For the years ended December 31, 2013, 2012 and 2011, the Bank has not been required to perform on any financial guarantees and no losses were incurred.

Commitments to extend credit were as follows:

(dollars in thousands)	December 31, 2013
Loan commitments:
Fixed rate	$	10,380
Variable rate	183,344
Total loan commitments	193,724
Standby letters of credit	1,114
Total commitments	$	194,838

(c)Contingencies: The Company and its subsidiaries are from time to time defendants in and are threatened with various legal proceedings arising from regular business activities.  Management believes the ultimate liability, if any, arising from such claims or contingencies will not have a material adverse effect on the Company’s results of operations or financial condition.