COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases its premises under non-cancelable operating leases, and at December 31, 2018, the future minimum rental commitments under these leases are as follows:



	December 31, 2018
	(Dollars in thousands)
2019	$	14,968
2020	13,008
2021	12,090
2022	7,964
2023	5,788
Thereafter	19,338
	$	73,156

Operating lease expense recorded under such leases in 2018, 2017, and 2016 amounted to approximately $19.6 million, $17.8 million, and $14.7 million, respectively.

Legal Contingencies

In the normal course of business, the Company is involved in various legal claims. The Company has reviewed all legal claims against the Company with counsel for the fiscal year ended December 31, 2018 and has taken into consideration the views of such counsel as to the outcome of the claims. Accrued loss contingencies for all legal claims totaled approximately $755 thousand and $414 thousand at December 31, 2018 and December 31, 2017, respectively. It is reasonably possible the Company may incur losses in addition to the amounts the Company has accrued. However, at this time, the Company is unable to estimate the range of additional losses that are reasonably possible because of a number of factors, including the fact that certain of these litigation matters are still in their early stages and involve claims for which, at this point, the Company believes have little to no merit. The Company has considered these and other possible loss contingencies and does not expect the amounts to be material to any of the consolidated financial statements.

Unfunded Commitments and Letters of Credit

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, standby letters of credit and other commercial letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition. The Company’s exposure to credit loss in the event of nonperformance by the other party to commitments to extend credit and standby letters of credit and other commercial letters of credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for extending loan facilities to customers. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable; inventory; property, plant and equipment; and income-producing properties.

Commitments at December 31, 2018 and 2017 are summarized as follows:



	December 31,
	2018		2017
	(Dollars in thousands)
Commitments to Fund Low Income Housing Partnership Investments	$	46,507	$	38,467
Unused Credit Extensions	1,712,032		1,526,981
Standby Letters of Credit	69,763		74,748
Other Commercial Letters of Credit	65,822		74,147
	$	1,894,124	$	1,714,343

Commitments and letters of credit generally have variable rates that are tied to the prime rate. The amount of fixed rate commitments is not considered material to this presentation. From time to time, the Company enters into certain types of contracts that contingently require the Company to indemnify parties against third party claims and other obligations customarily indemnified in the ordinary course of the Company’s business. The terms of such obligations vary, and, generally, a maximum obligation is not explicitly stated. Therefore, the overall maximum amount of the obligations cannot be reasonably estimated. The most significant of these contracts relate to certain agreements with the Company’s officers and directors under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations in its consolidated statements of financial condition as of December 31, 2018 and 2017.

Mortgage-Banking Derivatives

The Company enters into various stand-alone mortgage-banking derivatives in order to hedge the risk associated with the fluctuation of interest rates. Changes in fair value are recorded as mortgage banking revenue. Residential mortgage loans funded with interest rate lock commitments and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. At December 31, 2018, the Company had approximately $874 thousand in interest rate lock commitments and $874 thousand in total forward sales commitments for the future delivery of residential mortgage loans. At December 31, 2017, the Company had approximately $4.8 million in interest rate lock commitments and $4.8 million in total forward sales commitments.