14.	COMMITMENTS

Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Company makes various commitments to extend credit that are not reflected in the accompanying consolidated balance sheets. Commitments, which are disbursed subject to certain limitations, extend over various periods of time. Generally, unused commitments are cancelled upon expiration of the commitment term as outlined in each individual contract. The following table summarizes the Company's significant commitments: (dollars in thousands)

	Dec 2011		Dec 2010
Commitments to extend credit:
Commercial mortgage and commercial loans (1)	$	76,279	$	76,505
Residential mortgage loans		14,098		14,519
Revolving home equity lines of credit		38,453		38,944
Other		15,725		16,436
Standby letters of credit		5,123		5,100
Commitments to sell loans:
Residential mortgage loans		15,743		15,562

1)	Commercial mortgage and commercial loan commitments to extend credit are presented net of the portion of participation interests due to investors.

Management believes that none of these arrangements exposes the Company to any greater risk of loss than already reflected on our balance sheet, so accordingly, no reserves have been established for these commitments.

The Company's exposure to credit loss in the event of nonperformance by the other parties to the financial instruments for commitments to extend credit is represented by the contract amount of those instruments. The Company uses the same credit policies and collateral requirements in making commitments as it does for on-balance sheet instruments.

Lease Obligations

The Company leases banking facilities and other office space under operating leases that expire at various dates through 2022 and that contain certain renewal options. Rent expenses charged to operations were $674,000 and $513,000 for the years ended December 31, 2011 and 2010, respectively. As of December 31, 2011, future minimum annual rental payments under these leases are as follow: (dollars in thousands)

Year Ended December	Amount
2012	$	535
2013		533
2014		535
2015		547
2016		559
Thereafter		3,091
Total Minimum Operating Lease Payments	$	5,800