XML 38 R20.htm IDEA: XBRL DOCUMENT

OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES

12 Months Ended

Dec. 31, 2024

OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES

OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES

12.

OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES

Commitments to Extend Credit

The Company, in the normal course of business, is party to financial instruments with off balance sheet risk. These financial instruments primarily 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 Company’s credit policies. Collateral from the client may be required based on the Company’s 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.

The Company also extends binding commitments to clients and prospective clients. Such commitments assure a borrower of financing for a specified period of time at a specified rate. The risk to the Company under such loan commitments is limited by the terms of the

contracts. For example, the Company may not be obligated to advance funds if the client’s financial condition deteriorates or if the client fails to meet specific covenants.

An approved but unfunded loan commitment represents a potential credit risk and a liquidity risk, since the Company’s 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 Company’s 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.

The following table presents the Company’s commitments, exclusive of Mortgage Banking loan commitments for each year ended:


December 31, (in thousands)			2024			2023

Unused warehouse lines of credit			$	404,240		$	623,277
Unused home equity lines of credit				478,040			446,006
Unused loan commitments - other				1,093,990			1,159,284
Standby letters of credit				11,282			11,012
Total commitments			$	1,987,552		$	2,239,579

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.

The following tables present a rollforward of the ACLC for years ended December 31, 2024 and 2023:


			ACLC Roll-forward
			Years Ended December 31,
			2024															2023
			Beginning						Charge-						Ending			Beginning						Charge-						Ending
(in thousands)			Balance			Provision			offs			Recoveries			Balance			Balance			Provision			offs			Recoveries			Balance

Loan Commitments
Unused warehouse lines of credit			$	116		$	(37)		$	—		$	—		$	79		$	190		$	(74)		$	—		$	—		$	116
Unused home equity lines of credit				55			128			—			—			183			332			(277)			—			—			55
Unused construction lines of credit				820			(143)			—			—			677			384			436			—			—			820
Unused RCS lines of credit				—			300			—			—			300			—			—			—			—			—
Unused loan commitments - other				349			(98)			—			—			251			344			5			—			—			349

Total			$	1,340		$	150		$	—		$	—		$	1,490		$	1,250		$	90		$	—		$	—		$	1,340

The Company increased its ACLC $150,000 during 2024 driven by an increase in provision of $300,000 for an increase in unused RCS lines of credit partially offset by the ACLC at the Core Bank decreasing $150,000 primarily due to a year over year decrease in unused commitments.