CHFC 2017 Annual Report

Future minimum lease payments for operating leases and other noncancelable contractual obligations are as follows: (Dollars in thousands) Future Minimum Lease Payments (1) Years ending December 31, 2018 $ 22,973 2019 21,487 2020 18,808 2021 16,794 2022 20,112 Thereafter 33,775 Total $ 133,949 (1) Future minimum lease payments are reduced by $0.9 million related to sublease income to be received within the next five years. Minimum payments include estimates, where applicable, of estimated usage and annual Consumer Price Index increases of approximately 2.1%. Total expense recorded under operating leases and other noncancelable contractual obligations was $30.8 million in 2017, compared to $20.4 million in 2016 and $15.6 million in 2015. Legal Proceedings The Corporation and Chemical Bank are subject to various pending or threatened legal proceedings arising out of the normal course of business and related to our merger and acquisition history. The Corporation assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that the Corporation will incur a loss and the amount of the loss can be reasonably estimated, the Corporation records a liability in the Consolidated Financial Statements. While the ultimate liability with respect to these litigation matters and claims cannot be determined at this time, in the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the financial position or results of operations of the Corporation. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2017 136