Note 1 3  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 period ended: September 30, 2018 December 31, 2017 Fixed Rate Variable Rate Fixed Rate Variable Rate (in thousands) Commitments to make loans $ 6,609 $ 11,436 $ 27,349 $ 31,412 Unused lines of credit 5,505 63,887 11,034 57,727 Standby letters of credit 542 1,749 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 is party to risk participation agreements, which had notional amounts totaling $26.6 million at September 30, 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 derivatives are recorded 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. The fair value of the derivative instruments incorporates a consideration of credit risk in accordance with ASC 820, resulting in some volatility in earnings each period. At September 30, 2018 and December 31, 2017, the fair value of the risk participation agreements were $26.6 million and $19.8 million, respectively. The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. Litigation is subject to inherent uncertainties and unfavorable rulings could occur. The Company records contingent liabilities resulting from claims against it when a loss is assessed to be probable and the amount of the loss is reasonably estimable. Accruals are not made in cases where liability is not probable or the amount cannot be reasonably estimated. Assessing probability of loss and estimating probable losses requires analysis of multiple factors, including in some cases judgments about the potential actions of third party claimants and courts. Recorded contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain. Based upon current knowledge and after consultation with counsel, the Company believes pending legal proceedings or claims should not have a material impact on its financial position or results of operations. However, in light of the uncertainties involved in such proceedings, the outcome of a particular matter may be material to the financial position or results of operations for a particular reporting period in the future.