14. COMMITMENTS, CONTINGENCIES AND CREDIT RISK  Financial Instruments With Off-Balance-Sheet Risk  The Corporation is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets.  The Corporations exposure to credit loss, in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, is represented by the contractual amount of those instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. These commitments are as follows (dollars in thousands):           September 30,  December 31,    2020 2019 Commitments to extend credit:        Variable rate  $ 113,982  $ 106,278  Fixed rate  77,073  50,796  Standby letters of credit - Variable rate  8,075  5,441  Credit card commitments - Fixed rate  6,828  5,841            $ 205,958  $ 168,356   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 Corporation evaluates each customers creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on managements credit evaluation of the party. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties.  Standby letters of credit are conditional commitments issued by the Corporation to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The commitments are structured to allow for 100% collateralization on all standby letters of credit.  Credit card commitments are commitments on credit cards issued by the Corporations subsidiary and serviced by other companies. These commitments are unsecured.  Legal Proceedings and Contingencies  In the normal course of business, the Corporation is involved in various legal proceedings. For an expanded discussion on the Corporations legal proceedings, see Part II, Item 1, Legal Proceedings in this report.  C oncentration of Credit Risk  The Bank grants commercial, residential, agricultural, and consumer loans throughout Michigan and Northeastern Wisconsin. The Banks most prominent concentration in the loan portfolio relates to commercial real estate loans to operators of nonresidential buildings. This concentration at September 30, 2020 represents $136.372 million, or 15.75%, compared to $141.965 million, or 18.54 %, of the commercial loan portfolio on December 31, 2019. The remainder of the commercial loan portfolio is diversified in such categories as hospitality and tourism, real estate agents and managers, new car dealers, gas stations and convenience stores, petroleum, forestry, agriculture and construction. Due to the diversity of the Banks locations, the ability of debtors of residential and consumer loans to honor their obligations is not tied to any particular economic sector.