13. OFF-BALANCE-SHEET ACTIVITIES, COMMITMENTS AND CONTINGENCIES Financial instruments with off-balance-sheet risk - The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters-of-credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the CFS. The Companys exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for recorded instruments. Financial instruments whose contract amounts represent credit risk outstanding at year-end follow: 2019 2018 Commitments to grant loans and unfunded commitments under lines of credit $ 409,969 $ 346,245 Standby letters-of-credit 10,748 5,062 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on managements credit evaluation of the customer. Standby letters-of-credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those letters-of-credit are primarily issued to support public and private borrowing arrangements. Essentially all letters-of-credit issued have expiration dates within one year. The credit risk involved in issuing letters-of-credit is essentially the same as that involved in extending loan facilities to customers. The Company requires collateral supporting those commitments if deemed necessary. Litigation - The Company is a defendant in legal actions arising from time to time in the normal course of business. Management believes that the ultimate liability, if any, arising from these matters will not materially affect the CFS, based on information known as of the date the CFS were available to be issued. FHLB Letters of Credit - The Company uses letters of credit to pledge to certain public deposits. The balance of these letters of credit was $199.0 million and $199.0 million at December 31, 2019 and 2018, respectively. Lease Commitments - The Company leases certain office facilities and office equipment under operating leases. Rent expense for all operating leases totaled approximately $2.4 million in 2019 and $2.0 million in 2018. Occupancy expense was reduced by approximately $891,000 and $911,000 for rental income during 2019 and 2018, respectively. Future minimum lease payments due under non-cancelable operating leases as of December 31, 2019 are as follows: 2020 $ 1,613 2021 1,439 2022 1,248 2023 999 2024 722 Thereafter 4,367 $ 10,388