FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

6 Months Ended

Jun. 30, 2021

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

NOTE 7 – FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. At June 30, 2021, and December 31, 2020 these financial instruments consisted of the following:

($ in thousands)	June 30, 2021				December 31, 2020
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	86,584	$	33,205	$	97,738	$	16,203
Unused lines of credit		178,224		210,529		157,006		195,221
Standby letters of credit		2,848		9,903		4,182		11,486

Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments have interest rates ranging from 0.5% to 18.0% and maturities ranging from approximately 1 year to 30 years.

The Company adopted ASC 326, effective January 1, 2021, which requires the Company to estimate expected credit losses for OBSC exposures which are not unconditionally cancellable. The Company maintains a separate ACL on OBSC exposures, including unfunded commitments and letters of credit, which is included on the accompanying consolidated balance sheet as of June 30, 2021.

Changes in the ACL on OBSC exposures were at June 30, 2021 were as follows ($ in thousands):

	Three Months Ended		Six Months Ended
	June 30, 2021		June 30, 2021
Balance at beginning of period	$	718	$	—
Adoption of ASU 326		—		718
Credit loss expense related to OBSC exposures		—		—
Balance at end of period	$	718	$	718

The Company recorded no provision for credit losses on OBSC exposures for the three- and six-months period ended June 30, 2021. Adjustments to the ACL on OBSC exposures will be recorded to provision for credit losses.

No credit loss estimate is reported for OBSC exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation on the arrangement.