Contractual Obligations, Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2024

Contractual Obligations, Commitments and Contingent Liabilities

Contractual Obligations, Commitments and Contingent Liabilities

16. Contractual Obligations, Commitments and Contingent Liabilities

Contractual Obligations

The Corporation enters into contractual obligations in the normal course of business. Among these obligations are FHLB advances and junior subordinated debentures, operating lease agreements for banking and subsidiaries’ offices, and for data processing and telecommunications equipment.  At December 31, 2024, no large capital obligations are anticipated.

Commitments

Loan commitments are made to accommodate the financial needs of our customers. Loan commitments have credit risk essentially the same as that involved in extending loans to customers and are subject to normal credit policies. Commitments to extend credit generally have fixed expiration dates, may require payment of a fee, and contain cancellation clauses in the event of an adverse change in the customer’s credit quality.

Commitments to extend credit in the form of consumer, commercial and business as of December 31, 2024 and December 31, 2023 are as follows:

(in thousands)	2024		2023
Residential mortgage - home equity	$	70,894	$	72,080
Residential mortgage - construction		13,138		17,684
Commercial		163,079		160,196
Consumer - personal credit lines		4,224		4,186
Standby letters of credit		16,522		11,037
Total	$	267,857	$	265,183

We do not issue any guarantees that would require liability recognition or disclosure other than the standby letters of credit issued by the Bank. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party to support contractual obligations and to ensure job performance. Generally, the Bank’s letters of credit are issued with expiration dates within one year. Historically, most letters of credit expire unfunded, and therefore, cash requirements are substantially less than the total commitment. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank generally holds collateral and/or personal guarantees supporting letters of credit.