Commitments and Loss Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Loss Contingencies

Commitments and Loss Contingencies

14) Commitments and Loss Contingencies

Loss Contingencies

The Company is involved in certain legal actions arising from normal business activities. Management, based upon the advice of legal counsel, believes the ultimate resolution of all pending legal actions will not have a material effect on the financial statements of the Company.

Off-Balance Sheet Arrangements

In the normal course of business the Company makes commitments to extend credit to its customers as long as there are no violations of any conditions established in the contractual arrangements. These commitments are obligations that represent a potential credit risk to the Company, but are not reflected on the Company’s consolidated balance sheets. Total unused commitments to extend credit were $1,185,077,000 at September 30, 2020, compared to $753,078,000 at September 30, 2019, and $1,120,638,000 at December 31, 2019. Unused commitments represented 44% outstanding gross loans at September 30, 2020, 40% at September 30, 2019, and 44% at December 31, 2019.

The effect on the Company’s revenues, expenses, cash flows and liquidity from the unused portion of the commitments to provide credit cannot be reasonably predicted because there is no certainty that lines of credit and letters of credit will ever be fully utilized. The following table presents the Company’s commitments to extend credit for the periods indicated:

	September 30,
	2020						2019						December 31, 2019
	Fixed		Variable				Fixed		Variable				Fixed		Variable
	Rate		Rate		Total		Rate		Rate		Total		Rate		Rate		Total
	(Dollars in thousands)
Unused lines of credit and commitments
to make loans	$	133,400	$	1,026,450	$	1,159,850	$	148,011	$	589,479	$	737,490	$	147,372	$	951,206	$	1,098,578
Standby letters of credit		4,089		21,138		25,227		2,244		13,344		15,588		11,445		10,615		22,060
	$	137,489	$	1,047,588	$	1,185,077	$	150,255	$	602,823	$	753,078	$	158,817	$	961,821	$	1,120,638

For the nine months ended September 30, 2020, there was an increase of $547,000 to the allowance for losses for the Company’s off-balance sheet credit exposures. The increase in the allowance for losses for off-balance sheet credit exposures in the first nine months of 2020 was driven by increased loss factors in the CECL model for all loan segments with off-balance sheet exposures which resulted from deterioration in the economic forecast assumptions used in the CECL model.