Commitments, Contingencies and Concentrations of Risk

Lease Commitments – The Company leases a portion of its facilities from non-affiliates under operating leases expiring at various dates through 2028. The following schedule shows the minimum annual lease payments, excluding any renewals and extensions, property taxes, and other operating expenses, due under these agreements:



Year ending December 31,	Amount
	(dollars in thousands)
2019	$	11,468
2020	10,869
2021	10,133
2022	9,296
2023	8,124
Thereafter	10,518
Total	$	60,408

Rental expense under all operating leases totaled $9.2 million for 2018, $4.8 million for 2017, and $4.4 million for 2016.

Legal Proceedings –-The Company is not involved in any material pending legal proceedings other than legal proceedings occurring in the ordinary course of business. Management believes that none of these legal proceedings, individually or in the aggregate, will have a material adverse impact on the results of operations or financial condition of the Company.

Employment Agreements—The Company has entered into a three-year employment agreement with its Chief Executive Officer (“CEO”). This agreement provides for the payment of a base salary, a bonus based upon the CEO’s individual performance and the Company’s overall performance, provides a vehicle for the CEO’s use, and provides for the payment of severance benefits upon termination under specified circumstances.

Additionally, the Bank has entered into three-year employment agreements with each of the following executive officers: the Bank’s President and Chief Operating Officer, the Chief Credit Officer and Chief Innovation Officer. The agreements provide for the payment of a base salary, a bonus based upon the individual’s performance and the overall performance of the Bank, and the payment of severance benefits upon termination under specified circumstances.

Availability of Funding Sources. The Company funds substantially all of the loans thatit originates or purchases through deposits, internally generated funds and/or borrowings. The Company competes for deposits primarily on the basis of rates, and, as a consequence, the Company could experience difficulties in attracting deposits to fund its operations if the Company does not continue to offer deposit rates at levels that are competitive with other financial institutions. To the extent that the Company is not able to maintain its currently available funding sources or to access new funding sources, it would have to curtail its loan production activities or sell loans and investment securities earlier than is optimal. Any such event could have a material adverse effect on the Company’s results of operations, financial condition and cash flows.