16. OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES

The following table summarizes the Company’s contractual obligations and other commitments to make future payments as of the date indicated (other than securities sold under agreements to repurchase). The Company’s future cash payments associated with its contractual obligations pursuant to its certificates and other time deposits, FHLB advances, subordinated debentures, and operating leases, as of the date indicated are as follows:


	March 31, 2016
	1 year or less		More than 1 year but less than 3 years		3 years or more but less than 5 years		5 years or more		Total
	(Dollars in thousands)

Certificates and other time deposits	$	865,849	$	404,159	$	124,390	$	-	$	1,394,398
Federal Home Loan Bank advances		217,069		112,487		94		508		330,158
Subordinated debentures		541		541		1,624		30,894		33,600
Operating leases		1,857		3,365		1,919		3,841		10,982
Total	$	1,085,316	$	520,552	$	128,027	$	35,243	$	1,769,138

Payments for the FHLB advances includes interest of $1.3 million that will be paid in future years. Payments for subordinated debentures includes interest of $11.4 million that will be paid in future years. The future interest payments were calculated using the current rate in effect at March 31, 2016. Payments related to leases are based on actual payments specified in underlying contracts.

Leases — The Company’s noncancelable future operating lease commitments as of the date indicated is as follows:


	March 31, 2016
	(Dollars in thousands)

2016	$	1,857
2017		1,946
2018		1,419
2019		1,120
2020		799
Thereafter		3,841
Total	$	10,982

The Company leases certain office facilities and equipment under operating leases. Rent expense under all noncancelable operating lease obligations, net of income from noncancelable subleases aggregated, was approximately $502 thousand and $392 thousand for the three months ended March 31, 2016 and 2015, respectively.

Litigation — The Company from time to time is involved in routine litigation arising from the normal course of business. Management does not believe that there are any pending or threatened proceedings against the Company which, upon resolution, would have a material effect on the consolidated financial statements.

Financial Instruments with Off-Balance Sheet Risk — In the normal course of business, the Company is a party to various financial instruments with off-balance sheet risk to meet the financial needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual or notional amount of these instruments. The Company uses the same credit policies in making these commitments and conditional obligations as it does for on-balance sheet instruments.

The following is a summary of the various financial instruments outstanding as of the date set forth:


	March 31, 2016
	1 year or less		More than 1 year but less than 3 years		3 years or more but less than 5 years		5 years or more		Total
	(Dollars in thousands)

Commitments to extend credit	$	302,404	$	286,469	$	89,161	$	69,909	$	747,943
Standby and commercial letters of credit		16,618		1,569		63		800		19,050
Total	$	319,022	$	288,038	$	89,224	$	70,709	$	766,993

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by the Company, upon extension of credit, is based on management’s credit evaluation of the customer.

Standby and commercial letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, the Company has rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. The credit risk to the Company in issuing letters of credit is essentially the same as that involved in extending loan facilities to its customers.