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COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES 17. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
In the ordinary course of business, the Company is subject to legal actions that involve claims for monetary relief. See Note 24 for additional information.
Financial Instruments With Off-Balance Sheet Risk
In the ordinary course of business, the Company is a party to financial instruments with off-balance sheet risk, primarily to meet the financing needs of its customers. To varying degrees, these financial instruments involve elements of credit risk that are not recognized in the Consolidated Statements of Financial Condition.
Exposure to loss for commitments to extend credit and standby letters of credit written is represented by the contractual amount of those instruments. The Company generally requires collateral to support such financial instruments in excess of the contractual amount of those instruments and use the same credit policies in making commitments as it does for on-balance sheet instruments.
The following represents a summary of off-balance sheet financial instruments at year-end:
 
 December 31,
(Dollars in thousands)20212020
Financial instruments with contract amounts which represent potential credit risk:
Construction loan commitments$403,767 $406,639 
Commercial mortgage loan commitments91,871 100,729 
Commercial loan commitments1,088,098 1,083,512 
Owner-occupied commercial commitments74,846 70,155 
Commercial standby letters of credit92,048 95,897 
Residential loan commitments6,815 2,842 
Consumer loan commitments731,850 591,856 
Total$2,489,295 $2,351,630 
At December 31, 2021, the Company had total commitments to extend credit of $2.5 billion. Commitments for consumer lines of credit were $731.9 million of which, $600.7 million were secured by real estate. Residential loan commitments generally have closing dates within a one month period but can be extended to six months. Not reflected in the table above are commitments to sell residential loans of $57.9 million and $91.9 million at December 31, 2021 and 2020, respectively.
Commitments provide for financing on predetermined terms as long as the customer continues to meet specific criteria. 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 completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. The Company evaluates each customer’s creditworthiness and obtain collateral based on its credit evaluation of the counterparty.
Secondary Market Loan Sales
The Company typically sells newly originated residential loans in the secondary market to mortgage loan aggregators and on a more limited basis, to GSEs, such as FHLMC, FNMA, and the FHLB. Loans held for sale are reflected on the Consolidated Statements of Financial Condition at their fair value with changes in the value reflected in the Consolidated Statements of Income. Gains and losses are recognized at the time of sale. The Company periodically retains the servicing rights on residential loans sold which results in monthly service fee income. The mortgage servicing rights are included in Intangible assets in the Consolidated Statements of Financial Condition. Otherwise, the Company sells loans with servicing released on a nonrecourse basis. Rate-locked loan commitments that the Company intends to sell in the secondary market are accounted for as derivatives under ASC 815, Derivatives and Hedging (ASC 815).
The Company does not sell loans with recourse, except for standard loan sale contract provisions covering violations of representations and warranties and, under certain circumstances, early payment default by the borrower. These are customary repurchase provisions in the secondary market for residential loan sales. These provisions may include either an indemnification from loss or the repurchase of loans. Repurchases and losses have been rare and no provision is made for losses at the time of sale. There were no repurchases for the years ended December 31, 2021 and 2020.
Unfunded Lending Commitments
At December 31, 2021 and December 31, 2020, the allowance for credit losses of unfunded lending commitments was $7.4 million and $8.2 million, respectively. A provision release for unfunded lending commitments of $0.8 million was recognized during the year ended December 31, 2021, and a provision expense for unfunded lending commitments of $3.7 million was recognized during year ended December 31, 2020.