Note

–

Commitments and Contingencies

–

In the normal course of business, the Bank is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and commercial letters of credit which are

not

included in the accompanying financial statements. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and commercial letters of credit is represented by the contractual amount of those instruments. The Bank’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit. The Bank uses the same credit policies in making such commitments and conditional obligations as it does for instruments that are included in the balance sheet. In the normal course of business, the Bank has made commitments to extend credit of approximately

$343.7

million and standby and commercial letters of credit of approximately

$22.7

million at

March 31, 2019.

The Bank leases certain branch offices through non-cancelable operating leases with terms that range from

one

ten

years and contain various renewal options for certain of the leases. Rental expense under these agreements was

$673,000

and

$579,000

for the

three

months ended

March 31, 2019

and

2018,

respectively.

Future minimum lease payments under these leases are as follows:

	(Dollars in thousands)
April 1, 2019 through March 31, 2020	$	2,329
April 1, 2020 through March 31, 2021		1,752
April 1, 2021 through March 31, 2022		1,536
April 1, 2022 through March 31, 2023		1,299
April 1, 2023 and Thereafter		6,999
Total Future Minimum Lease Payments	$	13,915

In the normal course of business, the Bank is involved in various legal proceedings. In the opinion of management and counsel, the disposition or ultimate resolution of such proceedings would

not

have a material adverse effect on the Bank’s financial statements.