NOTE 1 5  OFF BALANCE SHEET RISKS, COMMITMENTS, AND CONTINGENT LIABILITIES The Company, in the normal course of business, is party to financial instruments with off balance sheet risk. The financial instruments include commitments to extend credit and standby letters of credit. The contract or notional amounts of these instruments reflect the potential future obligations of the Company pursuant to those financial instruments. Creditworthiness for all instruments is evaluated on a case-by-case basis in accordance with the Companys credit policies. Collateral from the client may be required based on the Companys credit evaluation of the client and may include business assets of commercial clients, as well as personal property and real estate of individual clients or guarantors. An approved but unfunded loan commitment represents a potential credit risk and a liquidity risk, since the Companys client(s) may demand immediate cash that would require funding. In addition, unfunded loan commitments represent interest rate risk as market interest rates may rise above the rate committed to the Companys client. Since a portion of these loan commitments normally expire unused, the total amount of outstanding commitments at any point in time may not require future funding. Commitments to make loans are generally made for periods of one year or less. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third party. The terms and risk of loss involved in issuing standby letters of credit are similar to those involved in issuing loan commitments and extending credit. In addition to credit risk, the Company also has liquidity risk associated with standby letters of credit because funding for these obligations could be required immediately. The Company does not deem this risk to be material. No liability is currently established for standby letters of credit. The following table presents the contractual amounts of financial instruments with off-balance sheet risk for each year ended: 201 8 201 7 Fixed Rate Variable Rate Fixed Rate Variable Rate (in thousands) Commitments to make loans $ 5,317 $ 11,236 $ 27,349 $ 31,412 Unused lines of credit 7,410 73,024 11,034 57,727 Standby letters of credit 541 1,752 2,216 373 Commitments to make loans are generally made for periods of one year or less. In connection with the purchase of loan participations, the Bank entered into risk participation agreements, which had notional amounts totaling $26.6 million at December 31, 2018 and $19.8 million at December 31, 2017. The risk participation agreements are not designated against specific assets or liabilities under ASC 815, Derivatives and Hedging, and, therefore, do not qualify for hedge accounting. The Company does not use derivatives for trading or speculative purposes but rather as a result of services provided to certain borrowers. The derivatives are recorded in other liabilities on the balance sheet at fair value and changes in fair value of both the borrower and the offsetting swap agreements are recorded (and essentially offset) in non-interest income. In the normal course of business, the Company and its subsidiaries have been named, from time to time, as defendants in various legal actions. Certain of the actual or threatened legal actions may include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. The Company contests liability and/or the amount of damages as appropriate in each pending matter. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot predict with certainty the loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, or other relief, if any, might be. Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that the outcome of such pending matters will not have a material adverse effect on the consolidated financial condition of the Company, although the outcome of such matters could be material to the Companys operating results and cash flows for a particular future period, depending on, among other things, the level of the Companys revenues or income for such period. The Company will accrue for a loss contingency if ( 1 ) it is probable that a future event will occur and confirm the loss and ( 2 ) the amount of the loss can be reasonably estimated. The Company is not currently involved in any material litigation.