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Commitments to Extend Credit
6 Months Ended
Jun. 30, 2024
Commitments to Extend Credit [Abstract]  
Commitments to Extend Credit

Note 6 – Commitments to Extend Credit

The Company has commitments to extend credit with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

Commitments to extend credit are generally agreements to lend to a customer as long as there is no violation of any condition established in the contract, and generally have fixed expiration dates or other termination clauses. The commitments for lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer.

The Company’s exposure to credit loss is represented by the contractual amount of the commitments which are not unconditionally cancellable. There was a $394,000 and $487,000 allowance for credit losses associated with these commitments at June 30, 2024 and December 31, 2023, respectively. The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments.

The following commitments to extend credit were outstanding as of the dates specified:

 

 

 

Contract Amount

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

Commitments to grant loans

 

$

6,743

 

 

$

21,045

 

Unfunded commitments to fund loans and lines of credit

 

 

84,126

 

 

 

75,721

 

Commercial and Standby letters of credit

 

 

1,212

 

 

 

1,212