Loan Commitments and Standby Letters of Credit

12 Months Ended

Dec. 31, 2012

Loan Commitments and Standby Letters of Credit

Loan commitments are made to accommodate the financial needs of the Company's customers. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. They primarily are issued to facilitate the customers' normal course of business transactions. Standby performance letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Historically, almost all of the Company's standby letters of credit expire unfunded.

The credit risk associated with letters of credit is essentially the same as that of traditional loan facilities and are subject to the Company's normal credit policies. Since the majority of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future funding requirements. Commitments generally have fixed expiration dates or other termination clauses. Management believes that the proceeds obtained through a liquidation of collateral, the enforcement of guarantees and normal collection activities against the borrower would be sufficient to cover the potential amount of future payment required under the corresponding letters of credit. The amount of the liability for guarantees under standby letters of credit issued was $48,000 and $0 as of December 31, 2012 and December 31, 2011, respectively.

The Company's maximum exposure to credit loss for loan commitments (unfunded loans and unused lines of credit, including home equity lines of credit) and standby letters of credit outstanding were as follows:



	December 31,
(in thousands)	2012		2011
Unfunded commitments of existing commercial loans	$	308,721	$	269,180
Unfunded commitments of existing consumer/residential loans	98,903		86,273
Standby letters of credit	34,052		36,455
Commitments to grant loans	4,862		11,658
Total	$	446,538	$	403,566