Financial Instruments with Off-Balance Sheet Risk

12 Months Ended

Dec. 31, 2023

Financial Instruments With Off-balance Sheet Risk

Financial Instruments with Off-Balance Sheet Risk

Various commitments to extend credit are made in the normal course of banking business. Letters of credit are also issued for the benefit of customers. These commitments are subject to loan underwriting standards and geographic boundaries consistent with the Company’s loans outstanding.

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 some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Loan commitments outstanding and lines and letters of credit at December 31, 2023 and 2022 are as follows:


(dollars in thousands)	2023		2022
Unfunded loan commitments	$	1,981,334	$	2,335,735
Unfunded lines of credit	98,614		107,919
Letters of credit	87,146		100,196
Interest rate lock commitments	—		6,963
Total	$	2,167,094	$	2,550,813

As of December 31, 2023, the total reserve for unfunded commitments was $5.6 million as compared to $5.9 million at December 31, 2022 and is accounted for as a liability on the Consolidated Statements of Financial Condition. See Note 1 of the Consolidated Financial Statements for more information on the accounting policy for the allowance for unfunded commitments.

The Bank maintains a reserve for the potential repurchase of residential mortgage loans, which was $0 at December 31, 2023 and $25 thousand at December 31, 2022. These amounts are included in other liabilities in the accompanying Consolidated Balance Sheets. The Company commenced the cessation of first lien residential mortgage origination for secondary sale during the three months ended March 31, 2023, and subsequently, completed residual origination and sales activities as of June 30, 2023. Additions to the reserve are a component of other expenses in the accompanying Consolidated Statements of Income. The reserve is available to absorb losses on the repurchase of loans sold related to document and other fraud, early payment default and early payoff. Through December 31, 2023, no reserve charges have occurred related to fraud.