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Note 20 - Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Commitments and Contingencies | Note 20. Commitments and Contingencies In the normal course of business, the subsidiary banks make various commitments and incur certain contingent liabilities that are not presented in the accompanying Consolidated Financial Statements. The commitments and contingent liabilities include various guarantees, commitments to extend credit, and standby letters of credit. 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 subsidiary banks evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the subsidiary banks upon extension of credit, is based upon management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, marketable securities, inventory, property, plant and equipment, and income-producing commercial properties. Standby letters of credit are conditional commitments issued by the subsidiary banks to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements and, generally, have terms of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The subsidiary banks hold collateral, as described above, supporting those commitments if deemed necessary. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the subsidiary banks would be required to fund the commitments. The maximum potential amount of future payments the subsidiary banks could be required to make is represented by the contractual amount. If the commitment is funded, the subsidiary banks would be entitled to seek recovery from the customer. At December 31, 2023 and 2022, no amounts had been recorded as liabilities for the subsidiary banks’ potential obligations under these guarantees. As of December 31, 2023 and 2022, commitments to extend credit aggregated $2.0 billion and $1.7 billion, respectively. As of December 31, 2023 and 2022, standby letters of credit aggregated $23.7 million and $25.8 million, respectively. Management does not expect that all of these commitments will be funded. ​ Note 20. Commitments and Contingencies (continued) The Company has also executed contracts for the sale of mortgage loans in the secondary market in the amount of $2.6 million and $1.5 million as of December 31, 2023 and 2022, respectively. These amounts are included in loans held for sale at the respective balance sheet dates. Residential mortgage loans sold to investors in the secondary market are sold with varying recourse provisions. Essentially, all loan sales agreements require the repurchase of a mortgage loan by the seller in situations such as breach of representation, warranty, or covenant, untimely document delivery, false or misleading statements, failure to obtain certain certificates of insurance, unmarketability, etc. Certain loan sales agreements contain repurchase requirements based on payment-related defects that are defined in terms of the number of days/months since the purchase, the sequence number of the payment, and/or the number of days of payment delinquency. Based on the specific terms stated in the agreements of investors purchasing residential mortgage loans from the Company’s subsidiary banks, the Company had $11.0 million and $14.5 million of sold residential mortgage loans with recourse provisions still in effect at December 31, 2023 and 2022, respectively. The subsidiary banks did not repurchase any loans from secondary market investors under the terms of loans sales agreements during the years ended December 31, 2023, 2022, and 2021. In the opinion of management, the risk of recourse and the subsequent requirement of loan repurchase to the subsidiary banks is not significant, and accordingly no liabilities have been established related to such. See Note 6 regarding the Company’s contractual commitments for construction. Aside from cash on-hand and in-vault, the majority of the Company’s cash is maintained at upstream correspondent banks. The total amount of cash on deposit, certificates of deposit, and federal funds sold exceeded federal insured limits by approximately $96.1 million and $67.7 million as of December 31, 2023 and 2022, respectively. In the opinion of management, no material risk of loss exists due to the financial condition of the upstream correspondent banks. In an arrangement with Goldman Sachs, CRBT offers a cash management program for select customers. Based on a predetermined minimum balance, which must be maintained in the customer’s account, excess funds are automatically swept daily to an institutional money market fund administered by Goldman Sachs. At December 31, 2023 and 2022, the Company had $1.9 million and $69.4 million, respectively of customer funds invested in this cash management program. In the opinion of management, no material risk of loss exists due to the financial condition of Goldman Sachs. As of December 31, 2023 and 2022, there were $5.4 million and $5.3 million of investment securities pledged on the Goldman Sachs program, respectively, as a cover to the swap exposure.

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