NOTE 13 – COMMITMENTS

Leases

The Bank is party to various operating leases for property and equipment. Lease expense for the years ended June 30, 2015 and 2014 was $27,000 and $17,000, respectively.

Future minimum lease payments under these lease agreements are as follows for the fiscal years ended:

2016	$	27,000
2017		27,000
2018		27,000
2019		17,000
	$	98,000

The Bank entered into lease agreements with various tenants who lease space from the Bank in certain locations where the Bank has a branch office. Revenue from these leases for the years ended June 30, 2015 and 2014 was $23,000 and $33,000, respectively.

Future minimum lease payments under these lease agreements are as follows for the fiscal years ended:

2015	$	10,000
2016		10,000
2017		1,000
	$	21,000

Loans

In the ordinary course of business, the Bank has various outstanding commitments to extend credit that are not reflected in the accompanying consolidated financial statements. These commitments involve elements of credit risk in excess of the amounts recognized in the balance sheet.

The Bank uses the same credit policies in making commitments for loans as it does for loans that have been disbursed and recorded in the consolidated balance sheet. The Bank generally requires collateral when it makes loan commitments, which generally consists of the right to receive first mortgages on improved or unimproved real estate when performance under the contract occurs.

Commitments to extend credit 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 some portions of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Certain of these commitments are for fixed-rate loans, and, therefore, their values are subject to market risk as well as credit risk. Generally, these commitments do not extend beyond 90 days.

At June 30, 2015 the Bank’s total commitment to extend credit at variable rates was $33,247,000. The amount of fixed-rate commitments was approximately $2,636,000 at June 30, 2015. The fixed-rate loan commitments at June 30, 2015 have interest rates ranging from 2.95% to 21.0%. The Bank had no letters of credit outstanding at June 30, 2015.

At June 30, 2014 the Bank’s total commitment to extend credit at variable rates was $30,700,000. The amount of fixed-rate commitments was approximately $711,000 at June 30, 2014. The fixed-rate loan commitments at June 30, 2014 have interest rates ranging from 3.25% to 21.0%. The Bank had no letters of credit outstanding at June 30, 2014