Note 5 – Leases and Commitments

The Corporation has entered into a lease agreement for its main office facility. Payments began in February 2005 and the initial term of the lease expires in October 2015. In October 2007, the Corporation exercised its first renewal option on the property which expires in October 2025. The main office lease has one additional ten year renewal option. The Corporation also entered into a lease agreement for its former branch office in Bloomfield Township which provided for lease payments to begin in March 2006 and expire February 2016. The Bloomfield Township branch office lease was terminated effective January 18, 2010 pursuant to an agreement with the leaseholder. The termination agreement called for a one-time payment of $110,000 to the leaseholder to end the lease. In October 2010, the Corporation entered into a one year lease agreement for a lending production office (“LPO”) in Bay City, Michigan. The lease has two, one year renewal options. In March 2011, a new one year lease was signed for additional office space in the building adjacent to the main office at a rate of $2,800 per month. The lease has two, five year renewal options. In May 2011, the Bank began a month-to-month lease for a LPO in Farmington Hills, Michigan with no future commitment.

Rent expense under these agreements was $73,000 and $59,000 for the three month period ended June 30, 2011 and 2010, respectively. For the six months ended June 20, 2011 and 2010, rent expense under these agreements was $137,000 and $127,000 respectively.

The following is a schedule of future minimum rental payments under operating leases on a calendar year basis:


2011	$	138
2012		243
2013		239
2014		244
2015		249
Thereafter		2,727

Total	$	3,839