NOTE 13—COMMITMENTS WITH OFF-BALANCE SHEET RISK

The Bank is a party to commitments to extend credit in the normal course of business to meet the financing needs of its customers. Commitments are agreements to lend to customers providing that there are no violations of any condition established in the contract. Commitments to extend credit have a fixed expiration date or other termination clause. These instruments involve elements of credit and interest rate risk more than the amount recognized in the statements of financial position. The Bank uses the same credit policies in making commitments to extend credit as it does for on-balance sheet instruments.

The Bank evaluates each customer’s credit on a case-by-case basis. The amount of collateral obtained is based on management’s credit evaluation of the customer. The amount of commitments to extend credit and the exposure to credit loss for non-performance by the customer (before considering collateral) was $212,550 and $144,616 as of June 30, 2025 and 2024, respectively. As of June 30, 2025, $144,581 of the commitments carried variable rates and $67,969 carried fixed rates with interest rates ranging from 3.05% to 10.25% with maturity dates from July 2025 to August 2060. As of June 30, 2024, $130,955 of the commitments carried variable rates and $13,661 carried fixed rates with interest rates ranging from 3.05% to 10.50% with maturity dates from July 2024 to January 2056. Financial standby letters of credit were $2,010 and $1,180 as of June 30, 2025 and 2024, respectively. In addition, commitments to extend credit of $12,609 and $11,298 as of June 30, 2025 and 2024, respectively, were available to checking account customers related to the overdraft protection program. Since some loan commitments expire without being used, the amount does not necessarily represent future cash commitments.