Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Note 12 - Commitments and Contingencies

The following table illustrates our contractual obligations and commercial commitments by due date as of December 31, 2021:


(dollars in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Construction holdbacks (1)	$	524,462	$	298,692	$	225,770	$	—	$	—
Operating lease obligations (2)		10,870		861		1,959		2,079		5,971
Total	$	535,332	$	299,553	$	227,729	$	2,079	$	5,971

(1)

The funding timing and amounts of construction holdbacks are uncertain as these commitments relate to loans for construction costs and depend on the progress and performance of the underlying projects.

(2)

The total operating lease obligation includes $2.9 million of imputed interest.

Construction Loans

Our commitments and contingencies include usual obligations incurred by real estate lending companies in the normal course of business, including construction holdbacks as disclosed in Note 4.

Lease Commitments

On March 18, 2020, we entered into a non-cancelable operating lease agreement for our office space in Seattle with an original lease period expiring in January 2032, which includes an option to extend the lease term for an additional five years. We have concluded that the renewal option is not reasonably certain of being exercised, therefore, the renewal is not included in the right of use asset and lease liability. The lease commencement date was in the first quarter of 2021. The total future cash payments included in the measurement of our operating lease liabilities, net of lease incentives, was $11.7 million at inception of the lease. The right-of-use assets obtained in exchange for the new operating lease obligation and the tenant improvements were $6.4 and $2.0 million, respectively. The discount rate for the operating lease was 6%, resulting in an imputed interest amount of $3.3 million.

Legal Proceedings

From time to time, we are named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, we do not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect our results of operations, financial condition or cash flows.

Concentration Risk

Our loan portfolio is primarily secured by first deed of trust liens on residential and commercial real estate located in 19 states and the District of Columbia. Our loan portfolio is also concentrated within ten counties, the largest being Utah County in Utah. As of December 31, 2021 and 2020, the top ten counties make up 46.6% and 43.2% of the total committed amount of loans in our total portfolio.