Note 17: Commitments and Credit Risk

Total commercial and commercial real estate loans comprised 38% and 36%, respectively, of the loan portfolio for the years ended December 31, 2015 and December 31, 2014, with substantially all of these loans secured by commercial real estate and business assets mainly located in Ohio. Installment loans account for approximately 1% of the loan portfolio for both years ended December 31, 2015 and 2014. These loans are secured by consumer assets including automobiles, which account for 49% and 30%, respectively, of the installment loan portfolio. Residential one-to-four family real estate loans comprise 61% and 63% of the loan portfolio at December 31, 2015 and 2014, respectively, and primarily include first mortgage loans on residential properties and home equity lines of credit. Included in cash and due from banks as of the years ended December 31, 2015 and 2014, is $2.6 million and $2.9 million respectively of uninsured deposits in the form of branch cash on hand.

Commitments to Originate Loans

Commitments to originate loans 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. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management's credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate.

At December 31, 2015 and 2014, the Company had outstanding commitments to originate fixed-rate loans aggregating approximately $2.1 million and $734,000, respectively. The commitments extended over varying periods of time with the majority being disbursed within a one-year period.

Mortgage loans in the process of origination represent amounts that the Company plans to fund within a normal period of one year. Total mortgage loans in the process of origination amounted to approximately $4.5 million and $1.1 million at December 31, 2015 and 2014, respectively.

The Company had undisbursed amounts of nonresidential real estate and land loans of $4.2 million and commercial loans of $291,000 at December 31, 2015. The Company had undisbursed amounts of nonresidential real estate and land loans of $4.1 million at December 31, 2014.

At December 31, 2015, the Company had unused extensions of credit totaling $7.8 million, compared to $8.0 million at December 31, 2014, related to consumer loans.

Standby Letters of Credit

Standby letters of credit are irrevocable conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under non-financial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. Fees for letters of credit are initially recorded by the Company as deferred revenue and are included in earnings at the termination of the respective agreements.

Should the Company be obligated to perform under the standby letters of credit, the Company may seek recourse from the customer for reimbursement of amounts paid.

The Company had outstanding standby letters of credit totaling $407,000 at December 31, 2015, and $157,000 at December 31, 2014, with terms not exceeding eleven months. At both December 31, 2015 and 2014, the Company had no deferred revenue under standby letter of credit agreements.

Lines of Credit

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management's credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments.

At December 31, 2015, the Company had granted unused lines of credit to borrowers aggregating approximately $17.1 million and $19.4 million for commercial lines and open-end consumer lines, respectively. At December 31, 2014, the Company had granted unused lines of credit to borrowers aggregating approximately $16.6 million and $18.6 million for commercial lines and open-end consumer lines, respectively.

Leases

The Company currently leases two branch banking facilities under an operating lease. The first lease originated in fiscal 2000 for a ten year term and 3 five year renewal options ending in October 2018. The Company's second operating lease commenced in fiscal 2001 for an original five year term with 3 five year renewal options and has currently renewed the third option to expire in April 2021. The minimum annual lease payments over the current lease term are as follows:

Year ending	(In thousands)

2016	$	60
2017		60
2018		55
2019		28
2020		28
Thereafter		9
Total	$	240

The Company incurred rental expense under operating leases totaling approximately $60,000 for the years ended December 31, 2015 and December 31, 2014.

There were no other material commitments or contingencies at December 31, 2015.