16. COMMITMENTS

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

NOTE 16. COMMITMENTS

The Company makes commitments to extend credit in the normal course of business and issues standby letters of credit to meet the financing needs of its customers. The amount of the commitments represents the Company's exposure to credit loss that is not included in the consolidated balance sheet. As of the December 31, 2016 and 2015, the Company had the following commitments outstanding:

	2016		2015
Commitments to extend credit	$	148,060,176	$	135,138,834
Standby letters of credit		1,089,117		1,344,191

The Company uses the same credit policies in making commitments to extend credit and issue standby letters of credit as it does for the loans reflected in the consolidated balance sheet.

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 many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. Collateral required, if any, upon extension of credit is based on management's credit evaluation of the borrower’s ability to pay. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment.

The Bank leases four of its branch offices and both of its loan production offices under long term lease arrangements which had initial terms of either three, five or ten years. Lease expense was $173,777, $164,294 and $120,728 for 2016, 2015 and 2014, respectively. As of December 31, 2016, the required lease payments for the next five years were as follows:

2017	$	145,099
2018		102,726
2019		74,349
2020		75,500
2021		55,439