Note 15: Commitments

In the normal course of business, there are outstanding commitments that are not reflected in the Consolidated Financial Statements. Commitments include financial instruments that involve, to varying degrees, elements of credit, interest rate, and liquidity risk. In management’s opinion, these do not represent unusual risks and management does not anticipate significant losses as a result of these transactions. The Company uses the same credit policies in making commitments and conditional obligations for borrowers as it does for on-balance sheet instruments.

The following table is a summary of financial instrument commitments as of December 31, were as follows:


	2019						2018
	Fixed		Variable		Total		Fixed		Variable		Total
Letters of credit:
Borrower:
Financial standby	$	339	$	9,612	$	9,951	$	327	$	7,158	$	7,485
Commercial standby		-		-		-		-		397		397
Performance standby		571		6,212		6,783		532		6,381		6,913
		910		15,824		16,734		859		13,936		14,795
Non-borrower:
Performance standby		-		67		67		-		67		67
Total letters of credit	$	910	$	15,891	$	16,801	$	859	$	14,003	$	14,862

Unused loan commitments:	$	111,348	$	320,120	$	431,468	$	89,303	$	297,785	$	387,088

The Bank occupies facilities under long-term operating leases, some of which include provisions for future rent increases. In addition, the Company leases space at sites that house automatic teller machines (ATMs). The Company also receives rental income on certain leased properties. As of December 31, 2019, aggregate future minimum rental income to be received under noncancelable leases totaled $42,000. Total facility net operating lease expense or revenue recorded under all operating leases was a net expense of $248,000, $180,000 and $64,000 in 2019, 2018 and 2017, respectively. Total ATM lease expense, including the costs related to servicing those ATM’s, was $916,000, $979,000 and $679,000 in 2019, 2018 and 2017, respectively, with growth in expense in 2018 forward due to the ATMs obtained with the acquisition of ABC Bank.

The following table below is the estimated aggregate minimum annual rental commitments at December 31, 2019:


											2025
	2020		2021		2022		2023		2024		and thereafter
Rental commitment	$	496	$	742	$	621	$	612	$	628	$	3,940

Legal proceedings

The Company and its subsidiaries, from time to time, pursue collection suits and other actions that arise in the ordinary course of business against their borrowers and are defendants in legal actions arising from normal business activities. Management, after consultation with legal counsel, believes that the ultimate liabilities, if any, resulting from these actions will not have a material adverse effect on the financial position of the Bank or on the consolidated financial position of the Company based on all known information at this time.