NOTE 14 - COMMITMENTS AND OFF BALANCE SHEET ACTIVITIES

The Bank leases branch facilities and sites and is committed under various non-cancelable lease contracts that expire at various dates through the year 2026. Some of these leases are with members of the Bank’s Board of Directors or companies they control. Expense for leased premises was $986, $947 and $839 for 2013, 2012 and 2011, respectively. Minimum lease payments at December 31, 2013 for all non-cancelable leases were as follows:

2014	$	984
2015		756
2016		508
2017		443
2018		227
Thereafter		887

Total minimum lease payments	$	3,805

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, so long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

Financial instruments with off-balance-sheet risk were as follows at year-end:

	2013				2012
	Fixed		Variable		Fixed		Variable
	Rate		Rate		Rate		Rate
Commitments to make loans (at market rates)	$	7,509	$	8,188	$	6,115	$	8,324
Unused lines of credit		-		392,719		-		340,919
Unused letters of credit		-		47,155		-		46,336

The loan commitments are generally extended for terms of up to 60 days and, in many cases, allow the customer to select from one of several financing options offered. For the fixed rate commitments, the interest range was 3.25% to 5.50% in 2013 and 3.25% to 5.25% in 2012.

At December 31, 2013 and 2012, the Bank was required to have $11,643 and $10,997, respectively, on deposit with the Federal Reserve or as cash on hand as reserve.

On March 3, 2005, the Bank entered into an agreement with Northern Kentucky University whereby the University granted to the Bank the naming rights for the new Northern Kentucky University Arena constructed on the campus of the University for a term commencing immediately upon execution of the agreement and expiring twenty years after the opening of the Arena. In consideration therefore, the Bank is paying $6,000 in seven equal annual installments which began after substantial completion and opening of the Arena which occurred in September 2009.

The cost of the naming rights is being amortized over the life of the contract commencing on the opening of the Arena, which took place in September 2009. The Company recorded $300 in expense for these naming rights in 2013, 2012 and 2011, the year end balances for this asset was $3,543 and $2,986 at December 31, 2013 and 2012, respectively

In the second quarter of 2007, the Bank and Thomas More College announced a naming rights agreement for the new athletic field being constructed on Thomas More’s campus. The Bank committed $1,000 to the project, which has been named The Bank of Kentucky Field. The cost of the naming rights is being amortized over the twenty-five year life of the agreement commencing on the opening of the field, which took place in September 2008. The Company recorded $40 in expense for these naming rights in 2013, 2012 and 2011, the year end balances for this asset was $787 and $827 at December 31, 2013 and 2012 respectively.

On November 8, 2012, the Bank entered into an agreement with Gateway Community and Technical College whereby the College granted to the Bank the naming rights for the new classroom and training center located in Boone County Kentucky. The Bank committed $1,000 to the project, which will be named The Bank of Kentucky Classroom and Training Center. The cost of the naming rights will be amortized over a twenty year life commencing when the building is officially named, which is expected to take place in 2013. The Company expects to record $50 in expense annually beginning with the dedication of the building. The year-end balance for this asset was $643 and $334 at December 31, 2013 and 2012, respectively.