COMMITMENTS AND CONTINGENCIES

The Company had commitments under construction contracts of $3,016 as of December 31, 2016. As of December 31, 2016, the Company also had a commitment under a forward starting interest rate swap with a notional amount of $100,000. For additional information about the forward starting interest rate swap, see Note 9 — Derivatives and Hedging Activity.

The Parent Company and the Billings office of FIB are the anchor tenants in a building owned by an entity in which FIB has a 50% ownership interest.

The Company leases certain premises and equipment from third parties under operating leases. Total rental expense to third parties was $1,879 in 2016, $2,660 in 2015 and $1,190 in 2014.

The total future minimum rental commitments, exclusive of maintenance and operating costs, required under operating leases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2016, are as follows:



	Third Parties		Related Entity		Total
For the year ending December 31:
2017	$	1,256	$	1,145	$	2,401
2018	1,219		1,111		2,330
2019	1,164		971		2,135
2020	1,104		971		2,075
2021	1,009		971		1,980
Thereafter	5,731		4,529		10,260
Total	$	11,483	$	9,698	$	21,181

Residential mortgage loans sold to investors in the secondary market are sold with varying recourse provisions. Essentially all of the loan sales agreements require the repurchase of a mortgage loan by the seller in situations such as breach of representation, warranty or covenant; untimely document delivery; false or misleading statements; failure to obtain certain certificates or insurance; unmarketability; etc. Certain loan sales agreements contain repurchase requirements based on payment-related defects that are defined in terms of the number of days or months since the purchase, the sequence number of the payment, and/or the number of days of payment delinquency. Based on the specific terms stated in the agreements, the Company had $2,711 and $3,465 of sold residential mortgage loans with recourse provisions still in effect as of December 31, 2016 and 2015, respectively. The Company did not repurchase any significant amount of loans from secondary market investors under the terms of loan sales agreements during the years ended December 31, 2016, 2015 and 2014. In the opinion of management, the risk of recourse and the subsequent requirement of loan repurchase to the Company is not significant, and accordingly no liabilities have been established related to such. In addition, the Company made various representations and warranties associated with the sale of loans. The Company has not incurred significant losses resulting from these provisions.

FIB was a defendant in a lender liability lawsuit, Kelly Logging Inc. v. First Interstate Bank (the “case"), which was tried in August, 2014 in the Montana Fourth Judicial District Court in Missoula, Montana. The case was settled on August 31, 2015. Legal and settlement costs related to the case of $5,000 and $4,000 during 2015 and 2014, respectively, are included in loss contingency expense in the Company's consolidated statements of income. During 2016, the Company recovered $4,150 of these loss contingency expenses. The recovery is included in non-recurring litigation recovery in the Company's consolidated statements of income.

In the normal course of business, the Company is involved in various other claims and litigation. In the opinion of management, following consultation with legal counsel, the ultimate liability or disposition thereof is not expected to have a material adverse effect on the consolidated financial condition, results of operations or liquidity of the Company.