OTHER COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2020

OTHER COMMITMENTS AND CONTINGENCIES

OTHER COMMITMENTS AND CONTINGENCIES

9. OTHER COMMITMENTS AND CONTINGENCIES

Loan Commitments

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and advance funds on various lines of credit. Those commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying unaudited interim Consolidated Financial Statements.

The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments.

The following off-balance sheet financial instruments were outstanding at June 30, 2020 and December 31, 2019. The contract amounts represent credit risk.

	June 30,		December 31,
	2020		2019
	(in thousands)
Commitments to grant loans	$	581,524	$	98,866
Unadvanced funds on home equity lines of credit		170,671		157,867
Unadvanced funds on revolving lines of credit		150,958		147,047
Unadvanced funds on construction loans		129,745		112,158

Commitments to extend credit and unadvanced portion of construction loans are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Commitments to grant loans generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for unadvanced funds on construction loans, home equity and revolving lines of credit may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. Commitments to grant loans, and unadvanced construction loans and home equity lines of credit are collateralized by real estate, while revolving lines of credit are unsecured.