(22)Commitments

(a)

Loan Commitments

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any terms or conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on an individual basis. The Company’s policy is to require suitable collateral, primarily real estate, to be provided by customers prior to disbursement of approved loans. At December 31, 2019 and 2018, the Company had loan commitments aggregating to $8.7 million (interest rates from 3.375% to 4.000%) and $7.9 million (interest rates from 4.125% to 5.000%), respectively, primarily consisting of fixed-rate residential first mortgage loans. In addition to commitments to originate loans, at December 31, 2019 and 2018, the Company had $24.5 million and $26.9 million, respectively, in unused lines of credit to borrowers.

(b)

Reserve Requirements

The Company is required by the Federal Reserve Bank to maintain reserves based on the amount of deposits held. The reserve requirement at December 31, 2019 and 2018 was $13.5 million and $11.9 million, respectively, and the Company met such requirements.