Commitments, Contingencies and Concentrations of Credit Risk

The Company, in the normal course of business, is party to financial instruments and commitments which involve, to varying degrees, elements of risk in excess of the amounts recognized in the consolidated financial statements. These financial instruments and commitments include unused consumer lines of credit and commitments to extend credit.

At December 31, 2018, the following commitments and contingent liabilities existed which are not reflected in the accompanying consolidated financial statements (in thousands):



	December 31, 2018
Unused consumer and construction loan lines of credit (primarily floating-rate)	$	326,990
Unused commercial loan lines of credit (primarily floating-rate)	406,954
Other commitments to extend credit:
Fixed-Rate	91,360
Adjustable-Rate	4,732
Floating-Rate	90,118

The Company’s fixed-rate loan commitments expire within 90 days of issuance and carried interest rates ranging from 3.63% to 7.50% at December 31, 2018.

The Company’s maximum exposure to credit losses in the event of nonperformance by the other party to these financial instruments and commitments is represented by the contractual amounts. The Company uses the same credit policies in granting commitments and conditional obligations as it does for financial instruments recorded in the consolidated statements of financial condition.

These commitments and obligations do not necessarily represent future cash flow requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s assessment of risk. Substantially all of the unused consumer and construction loan lines of credit are collateralized by mortgages on real estate.

At December 31, 2018, the Company is obligated under noncancelable operating leases for premises and equipment. Rental expense under these leases aggregated approximately $5.2 million, $3.2 million, and $3.1 million for the years ended December 31, 2018, 2017 and 2016, respectively.

The projected minimum rental commitments as of December 31, 2018 are as follows (in thousands):



For the Year Ended December 31,	Rental Commitments
2019	$	5,474
2020	5,225
2021	4,965
2022	4,792
2023	3,771
Thereafter	10,097
Total	$	34,324

The Company grants one-to-four family and commercial first mortgage real estate loans to borrowers primarily located in central and southern New Jersey. The ability of borrowers to repay their obligations is dependent upon various factors including the borrowers’ income and net worth, cash flows generated by the underlying collateral, value of the underlying collateral and priority of the Company’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the Company’s control; the Company is, therefore, subject to risk of loss. A decline in real estate values could cause some residential and commercial mortgage loans to become inadequately collateralized, which would expose the Bank to a greater risk of loss.

The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks. Collateral and/or guarantees are required for all loans.

The Company is a defendant in certain claims and legal actions arising in the ordinary course of business. Management and its legal counsel are of the opinion that the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.