COMMITMENTS AND CONTINGENCIES

Commitments

In the normal course of business, the Company is a party to both on- and off-balance sheet financial instruments involving, to varying degrees, elements of credit risk and interest rate risk in addition to the amounts recognized in the consolidated statements of condition.

The following is a summary of the Company's contractual off-balance sheet commitments for the dates indicated:



	December 31,
(In thousands)	2019		2018
Commitments to extend credit	$	734,649	$	654,575
Standby letters of credit	5,211		3,063
Total	$	739,860	$	657,638

The Company’s commitments to extend credit from its lending activities do not necessarily represent future cash requirements since certain of these instruments may expire without being funded and others may not be fully drawn upon. These commitments are subject to the Company’s credit approval process, including an evaluation of the customer’s creditworthiness and related collateral requirements. Commitments generally have fixed expiration dates or other termination clauses. Of the total commitments to extend credit, $274.6 million and $270.8 million were unconditionally cancellable by the Company at December 31, 2019 and 2018, respectively.

Standby letters of credit are conditional commitments issued to guarantee the performance of a borrower to a third party. In the event of nonperformance by the borrower, the Company would be required to fund the commitment and would be entitled to the underlying collateral, if applicable, which generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate. The maximum potential future payments are limited to the contractual amount of the commitment.

Legal Contingencies

In the normal course of business, the Company and its subsidiaries are subject to pending and threatened litigation, claims investigations and legal and administrative cases and proceedings. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that, based on the information currently available, the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial statements.

Reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. Assessments of litigation exposure are difficult because they involve inherently

unpredictable factors including, but not limited to: whether the proceeding is in the early stages; whether damages are

unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter

involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions;

whether discovery has begun or is not complete; whether meaningful settlement discussions have commenced; and whether the

lawsuit involves class allegations. In many lawsuits and arbitrations, it is not possible to determine whether a liability has been

incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case a

reserve will not be recognized until that time. Assessments of class action litigation, which is generally more complex than

other types of litigation, are particularly difficult, especially in the early stages of the proceeding when it is not known whether

a class will be certified or how a potential class, if certified, will be defined. As a result, we may be unable to estimate

reasonably possible losses with respect to every litigation matter we face.

As of December 31, 2019 and 2018, the Company did not have any material loss contingencies that were provided for and/or that are required to be disclosed.