Commitments and contingencies:

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates.

Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.



	March 31		December 31
	2020		2019
Commitments to extend credit, excluding interest rate lock commitments	$	1,154,092	$	1,086,173
Letters of credit	20,080		19,569
Balance at end of period	$	1,174,172	$	1,105,742

In connection with the adoption of CECL on January 1, 2020, the Company estimates expected credit losses on off-balance sheet loan commitments that are not accounted for as derivatives. When applying the CECL methodology to estimate expected credit loss, the Company considers the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions. As such, the Company recorded an allowance for credit losses on unfunded commitments in other liabilities amounting to $2,947. The impact net of taxes was recorded as part of the cumulative adjustment to retained earnings of $25,018 on January 1, 2020.

The table below presents activity within the allowance for credit losses on unfunded commitments:



	For the Three Months Ended March 31,
	2020
Balance at beginning of period	$	—
Impact of CECL adoption on provision for credit losses on unfunded commitments	2,947
Increase from unfunded commitments acquired in business combination	70
Provision for credit losses on unfunded commitments	1,601
Balance at end of period	$	4,618

In connection with the sale of mortgage loans to third party investors, the Bank makes usual and customary representations and warranties as to the propriety of its origination activities. Occasionally, the investors require the Bank to repurchase loans sold to them under the terms of the warranties. When this happens, the loans are recorded at fair value with a corresponding charge to a valuation reserve. The total principal amount of loans repurchased (or indemnified for) was $2,799 and $1,393, for the three months ended March 31, 2020 and 2019, respectively. The Company has established a reserve associated with loan repurchases. This reserve is recorded in accrued expenses and other liabilities on the consolidated balance sheets.

The following table summarizes the activity in the repurchase reserve:



	For the Three Months Ended March 31,
	2020			2019
Balance at beginning of period	$	3,529		$	3,273
Provision for loan repurchases or indemnifications	372			59
Recoveries on previous losses	(72		)	—
Balance at end of period	$	3,829		$	3,332