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COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | 9 Months Ended
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Sep. 30, 2024
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | NOTE J: COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS The Company 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 consist primarily of commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. These commitments consist principally of unused commercial and consumer credit lines. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of an underlying contract with a third-party. The credit risks associated with commitments to extend credit and standby letters of credit are essentially the same as that involved with extending loans to customers and are subject to the Company’s normal credit policies. Collateral may be obtained based on management’s assessment of the customer’s creditworthiness. The fair value of the standby letters of credit is immaterial for disclosure. The contract amounts of commitments and contingencies are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, |  | December 31,
(000’s omitted) | ​ | 2024 | ​ | 2023
Commitments to extend credit | ​ | $ | 1,682,414 | ​ | $ | 1,494,549
Standby letters of credit | ​ |  | 78,105 | ​ |  | 61,352
Total | ​ | $ | 1,760,519 | ​ | $ | 1,555,901
​ On November 16, 2023, the Federal Deposit Insurance Corporation (“FDIC”) issued a final rulemaking that implemented a special assessment to recover the uninsured deposit losses from bank failures that occurred during 2023. The final rule anticipated collecting the special assessment over eight quarterly assessment periods beginning in 2024 at an annual rate of approximately 13.4 basis points of uninsured deposits that exceeded $5.0 billion as of December 31, 2022. The FDIC has indicated that the amount of the special assessment and number of quarterly assessment periods are subject to adjustment as their loss estimates change. The Company accrued $1.5 million of expense related to the FDIC special assessment in 2023. During the nine months ended September 30, 2024, the Company adjusted its accrual for the FDIC special assessment for a net decrease of $0.2 million. The adjustments were made based on the receipt of new information from the FDIC that indicated an update to the special assessment amount and an increase in the number of quarterly assessment periods from eight to ten. Total FDIC insurance expense was $2.0 million and $1.9 million for the three months ended September 30, 2024 and 2023 and was $6.5 million and $5.9 million for the nine months ended September 30, 2024 and 2023, respectively. During 2024, CBNA entered into agreements to invest a total of $10.0 million in investment tax credits generated by a solar energy producing company. The Company has elected to account for the investment using the proportional amortization method. At September 30, 2024, the balance of the Company’s investment in these tax credits was $10.0 million and the unfunded commitment related to the solar energy tax credit investments was $9.6 million. These amounts were reflected in other assets and accrued interest and other liabilities, respectively, on the consolidated statements of condition. The Company expects to fund the commitment by December 31, 2025 as capital calls are made. The Company did not recognize any amortization, income tax credits or other income tax benefits related to its solar energy tax credit investments during the three and nine months ended September 30, 2024. Legal Contingencies On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with pending or threatened legal proceedings or other matters in which claims for monetary damages are asserted. For those matters where it is probable that the Company will incur losses and the amounts of the losses are reasonably estimable, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent such matters could result in exposure in excess of that liability, the amount of such excess is not currently estimable. The range of losses that are reasonably possible for matters where an exposure is not currently estimable or considered probable is not believed to be material in the aggregate. This is based on information currently available to the Company and involves elements of judgment and significant uncertainties. The Company recorded a loss contingency in 2023 related to the anticipated settlement, following mediation, of a threatened collective and class action asserted against CBNA on behalf of certain nonexempt branch employees, regarding unpaid wages under the Fair Labor Standards Act and applicable state labor laws. On February 5, 2024, following a mediation held on February 1, 2024, the Company agreed to a settlement in the amount of $5.8 million. A settlement agreement has been executed by the parties and the terms of the settlement have been approved by the Court. The Company recorded a $5.8 million litigation accrual at December 31, 2023. During the second quarter of 2024, the Company paid $5.8 million to the qualified settlement fund and the claims administrator mailed a notice and settlement check to class members who are eligible to participate in the settlement. Any funds that remain in the qualified settlement fund after the deadline to negotiate the settlement checks will revert to CBNA during the three months ended December 31, 2024.

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