COMMITMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2019

COMMITMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES

COMMITMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES

NOTE 18 – COMMITMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES

During the normal course of business, the Company becomes a party to financial instruments with off-balance sheet risk in order to meet the financing needs of its customers. These financial instruments include commitments to make loans and open-ended revolving lines of credit. Amounts as of the years ended December 31, 2019 and 2018, were as follows:

	2019				2018
	Fixed		Variable		Fixed		Variable
(dollars in thousands)	Rate		Rate		Rate		Rate
Commercial loan lines of credit	$	39,104	$	1,451,704	$	63,625	$	1,337,437
Commercial letters of credit		0		0		0		3,245
Standby letters of credit		0		70,932		0		81,512
Real estate mortgage loans		4,448		1,488		2,811		2,881
Real estate construction mortgage loans		478		2,139		400		2,189
Home equity mortgage open-ended revolving lines		0		247,562		0		232,362
Consumer loan open-ended revolving lines		180		17,116		215		14,468
Total	$	44,210	$	1,790,941	$	67,051	$	1,674,094

The index on variable rate commercial loan commitments is principally the national prime rate. Interest rate ranges on commitments and open-ended revolving lines of credit for years ended December 31, 2019 and 2018, were as follows:

	2019				2018
	Fixed		Variable		Fixed		Variable
	Rate		Rate		Rate		Rate
Commercial loan	0.75-14.50	%	2.65-9.25	%	0.75-14.50	%	2.65-10.00	%
Real estate mortgage loan	3.13-4.00	%	3.75-4.25	%	3.75-6.13	%	3.75-11.00	%
Consumer loan open-ended revolving line	15.00	%	3.88-15.00	%	15.00	%	3.88-15.00	%

Commitments, excluding open-ended revolving lines, generally have fixed expiration dates of one year or less. Open-ended revolving lines are monitored for proper performance and compliance on a monthly basis. Since many commitments expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company follows the same credit policy (including requiring collateral, if deemed appropriate) to make such commitments as it follows for those loans that are recorded in its financial statements.

The Company’s exposure to credit losses in the event of nonperformance is represented by the contractual amount of the commitments. Management does not expect any significant losses as a result of these commitments.