the prime rate plus 0.25%, but not less than 4.00%. This line of credit has covenants specific to capital and other financial  ratios, which the Company was in compliance with at December 31, 2012. There were no outstanding balance on the line of  credit at December 30, 2012.  OFF BALANCE SHEET ARRANGEMENTS. As a provider of financial services, we routinely issue financial  guarantees in the form of financial and performance standby letters of credit. Standby letters of credit are contingent  commitments issued by us generally to guarantee the payment or performance obligation of a customer to a third party. While these standby letters of credit represent a potential outlay by us, a significant amount of the commitments may expire  without being drawn upon. We have recourse against the customer for any amount the customer is required to pay to a third  party under a standby letter of credit. The letters of credit are subject to the same credit policies, underwriting standards and  approval process as loans made by us. Most of the standby letters of credit are secured, and in the event of nonperformance  by the customers, we have the right to the underlying collateral, which could include commercial real estate, physical plant  and property, inventory, receivables, cash and marketable securities. The contract amount of these standby letters of credit,  which represents the maximum potential future payments guaranteed by us, was $1.8 million at December 31, 2012.  At December 31, 2012, we had outstanding loan commitments, excluding standby letters of credit, of $53.5  million. We anticipate that sufficient funds will be available to meet current loan commitments. These commitments consist  of unfunded lines of credit and commitments to finance real estate loans.  CAPITAL. The Federal Reserve has established capital requirements for bank holding companies which generally  parallel the capital requirements for national banks under OCC regulations. The regulations provide that such standards will  generally be applied on a consolidated (rather than a bank-only) basis in the case of a bank holding company with more than  $500 million in total consolidated assets.  At December 31, 2012, we continued to maintain a sound leverage capital ratio of 10.09% and a total risk-based  capital ratio of 17.83%. As shown by the following table, our capital exceeded the minimum capital requirements at  December 31, 2012 (dollars in thousands):  At December 31, 2012, the Bank continued to maintain a leverage ratio of 9.90% and a total risk-based capital  ratio of 17.33%. As shown by the following table, the Bank’s capital exceeded the minimum capital requirements at  December 31, 2012 (dollars in thousands):  Actual Actual Required Required amount percent amount percent Leverage 61,839 $ 10.09% 24,504 $ 4.0% Tier 1 capital 61,839 16.39% 15,092 4.0% Total risk-based capital 67,273 17.83% 30,184 8.0% Banks and bank holding companies are generally expected to operate at or above the minimum capital  requirements. The above ratios are well in excess of regulatory minimums and should allow us to operate without capital  adequacy concerns. The Federal Deposit Insurance Corporation Improvement Act of 1991 establishes a bank rating system  based on the capital levels of banks. As of December 31, 2012 and 2011, we were rated "well capitalized", which is the  highest rating available under this capital-based rating system. We have $16.5 million in trust preferred securities which, in  accordance with current capital guidelines, has been included in Tier 1 capital as of December 31, 2012. Cash distributions  on the securities are payable quarterly, are deductible for income tax purposes and are included in interest expense in the  consolidated financial statements.  Actual Actual Required Required amount percent amount percent Leverage 60,463 $ 9.90% 24,433 $ 4.0% Tier 1 capital 60,463 16.09% 15,029 4.0% Total risk-based capital 65,124 17.33% 30,057 8.0% 57 