XML 35 R21.htm IDEA: XBRL DOCUMENT v3.24.0.1
Commitments and Contigent Liabilities
12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
NOTE 13:
 
COMMITMENTS AND CONTINGENT LIABILITIES
Credit-Related Financial Instruments
The Company is party to credit related financial instruments with off
 
-balance sheet risk in the normal course of business to
meet the financing needs of its customers.
 
These financial instruments include commitments to extend credit and standby
letters of credit.
 
Such commitments involve, to varying degrees, elements of credit and interest rate
 
risk in excess of the
amount recognized in the consolidated balance sheets.
The Company’s exposure to credit
 
loss is represented by the contractual amount of these commitments.
 
The Company
follows the same credit policies in making commitments as it does for on-balance sheet
 
instruments.
At December 31, 2023 and 2022, the following financial instruments were outstanding
 
whose contract amount represents
credit risk.
 
 
 
 
 
December 31
(Dollars in thousands)
2023
2022
Commitments to extend credit
$
73,606
$
87,657
Standby letters of credit
629
1,041
Commitments to extend credit are agreements to lend to a customer provided there is no violation
 
of any condition
established in the commitment agreement and provided the commitments are
 
not otherwise cancelable by the Bank.
 
Commitments generally have fixed expiration dates or other termination clauses
 
and may require payment of a fee.
 
The
commitments for lines of credit may expire without being drawn upon.
 
Therefore, 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 records an allowance for credit
losses on off-balance sheet exposures, unless the commitments to extend credit
 
are unconditionally cancelable, through a
charge to provision for credit losses in the Company’s
 
Consolidated Statement of Earnings, prior to the adoption of ASC
326, changes in the allowance were recorded as a component of other noninterest expense.
 
The allowance for credit losses
related to unfunded commitments was $
0.3
 
million and $
0.2
 
million at December 31, 2023 and 2022, respectively,
 
and is
included in other liabilities on the Company’s
 
Consolidated Balance Sheet.
 
See “Note 1: Summary of Significant
Accounting Policies – Allowanace for credit losses –
 
Unfunded commitments.”
Standby letters of credit are conditional commitments issued by the Company to
 
guarantee the performance of a customer
to a third party.
 
The credit risk involved in issuing letters of credit is essentially the same
 
as that involved in extending loan
facilities to customers.
 
The Company holds various assets as collateral, including accounts receivable,
 
inventory,
equipment, marketable securities, and property to support those commitments
 
for which collateral is deemed necessary.
 
The Company has a recorded a liability for the estimated fair value of these standby letters
 
of credit in the amount of $
9
thousand and $
16
 
thousand at December 31, 2023 and 2022, respectively.
Contingent Liabilities
The Company and the Bank are involved in various legal proceedings, arising in connection
 
with their business.
 
In the
opinion of management, based upon consultation with legal counsel, the ultimate resolution
 
of these proceedings will not
have a material adverse effect upon the consolidated financial
 
condition or results of operations of the Company and the
Bank.