13.	Commitments and Contingencies

Litigation.

The Company is involved in various claims and legal proceedings that arise in the course of conducting the Company’s business.. The outcome of such claims and legal proceedings are inherently difficult to predict. Management, after consultation with legal counsel and based upon information currently available to the Company, believes that any liability resulting from the resolution of such claims and proceedings will

not

have a material effect upon the Company’s consolidated financial condition, results of operations, or liquidity taken as a whole.

Lending.

In the normal course of business, the Company becomes a party to financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit in the form of loans or through commercial or standby letters of credit and financial guarantees. Those instruments represent varying degrees of exposure to risk in excess of the amounts included in the accompanying Consolidated Balance Sheets. The contractual or notional amount of these instruments indicates a level of activity associated with a particular class of financial instrument and is

not

a reflection of the level of expected losses, if any.

The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Unless noted otherwise, the Company does

not

require collateral or other security to support financial instruments with credit risk.

Financial instruments for which contract amounts represent the amount of credit risk include the following:

	As of December 31,
	2018		2017
	(In thousands)
Commitments to extend credit	$	2,691,579	$	2,366,368
Standby letters of credit		245,087		140,814
Commercial letters of credit		35,759		27,353
Bill of lading guarantees		730		24
Total	$	2,973,155	$	2,534,559

Commitments to extend credit are agreements to lend to a customer provided there is

violation of any condition established in the commitment agreement. These commitments generally have fixed expiration dates and are expected to expire without being drawn upon. The total commitment amounts do

not

necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company upon extension of credit is based on management’s credit evaluation of the borrowers.

As of

December 31, 2018,

the Company does

not

have fixed-rate or variable-rate commitments with characteristics similar to options, which provide the holder, for a premium paid at inception to the Company, the benefits of favorable movements in the price of an underlying asset or index with limited or

exposure to losses from unfavorable price movements.

As of

December 31, 2018,

commitments to extend credit of

$2.7

billion include commitments to fund fixed rate loans of

$200.4

million and adjustable rate loans of

$2.5

billion.

Commercial letters of credit and bill of lading guarantees are issued to facilitate domestic and foreign trade transactions while standby letters of credit are issued to make payments on behalf of customers if certain specified future events occur. The credit risk involved in issuing letters of credit and bill of lading guarantees is essentially the same as that involved in making loans to customers.

Leases.

The Company is obligated under a number of operating leases for premises and equipment with terms ranging from

one

10.5

years, many of which provide for periodic adjustment of rentals based on changes in various economic indicators. Rental expense was

$12.1

million for

2018,

$12.0

million for

2017,

and

$10.2

million for

2016.

The following table shows future minimum payments under operating leases with terms in excess of

one

year as of

December 31, 2018.

Year Ending December 31,	Commitments
	(In thousands)
2019	$	8,835
2020		7,220
2021		6,406
2022		5,406
2023		4,208
Thereafter		4,899
Total minimum lease payments	$	36,974

Rental income was

$0.4

million for

2018,

$0.4

million for

2017,

and

$0.4

million for

2016.

The following table shows future rental payments to be received under operating leases with terms in excess of

one

year as of

December 31, 2018:

Year Ending December 31,	Commitments
	(In thousands)
2019	$	214
2020		120
2021		79
2022		25
Total minimum lease payments to be received	$	438