The Bank is a 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 advance funds on lines of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the unaudited consolidated balance sheets.

The Bank’s exposure to credit loss is represented by the contractual amount of these commitments. The Bank uses the same credit policies in making commitments as it does for on-balance sheet instruments.

At March 31, 2022 and June 30, 2021, the following financial instruments were outstanding whose contract amounts represent credit risk:


(In thousands)	March 31, 2022		June 30, 2021
Commitments to grant loans	$	4,199	$	1,460
Unadvanced funds on equity lines of credit		5,419		5,659

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. The commitments for construction loans and lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s credit worthiness on a case-by-case basis and the commitments are collateralized by real estate.

Pursuant to the terms of noncancelable lease agreements in effect at March 31, 2022 pertaining to premises, future minimum rent commitments for the fiscal years ending 2022 through 2026 and thereafter amounted to $23,000, $119,000, $119,000, $119,000, $119,000 and $747,000, respectively.

The cost of the lease payments is not included above. Total lease expense for the nine months ended March 31, 2022 and 2021 amounted to $68,000 for each period.

Various legal claims also arise from time to time in the normal course of business which, in the opinion of management, will have no material effect on the Bank’s unaudited consolidated financial statements.