Commitments

12 Months Ended

Dec. 31, 2022

Commitments

Commitments

Note 14: 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:

	December 31, 2022						December 31, 2021
	Fixed		Variable		Total		Fixed		Variable		Total
Letters of credit:
Borrower:
Financial standby	$	3,514	$	15,365	$	18,879	$	384	$	17,474	$	17,858
Performance standby		3,161		13,989		17,150		456		14,907		15,363
		6,675		29,354		36,029		840		32,381		33,221
Non-borrower:
Performance standby		-		67		67		-		67		67
Total letters of credit	$	6,675	$	29,421	$	36,096	$	840	$	32,448	$	33,288
Unused loan commitments:	$	139,070	$	860,255	$	999,325	$	84,225	$	895,665	$	979,890

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, 2022, aggregate future minimum rental income to be received under noncancelable leases totaled $572,000.  Total facility net operating lease expense or revenue recorded under all operating leases was a net expense of $396,000 in 2022, $361,000 in 2021, and $223,000 in 2020.  Total ATM lease expense, including the costs related to servicing those ATM’s, was $1.9 million in 2022, $1.2 million in 2021, and $1.0 million in 2020.

The following table below is the estimated aggregate minimum annual rental commitments at December 31, 2022:

											2028
	2023		2024		2025		2026		2027		and thereafter
Rental commitment	$	1,460	$	1,543	$	1,792	$	1,595	$	1,631	$	10,036

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.