In the ordinary course of business, we enter into financial commitments to meet the financing needs of our customers. These financial commitments include commitments to extend credit, unused lines of credit, commercial and similar letters of credit and standby letters of credit. Those instruments involve varying degrees of credit and interest rate risk not recognized in our financial statements.

Our exposure to loss in the event of nonperformance on these financial commitments is represented by the contractual amount of those instruments. We use the same credit policies in making commitments as we do for loans reflected in the financial statements.


	September 30, 2026		December 31, 2025
	(dollars in thousands)
Commitments to make loans	$	48,174	$	41,635
Unused lines of credit	57,266		64,513
Commercial and similar letters of credit	169		2,389
Standby letters of credit	4,405		5,025
Total	$	110,014	$	113,562

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. Since many of the commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. We evaluate each client's creditworthiness on a case-by-case basis.

We record a liability for lifetime expected losses on off-balance-sheet credit exposure that does not fit the definition of unconditionally cancelable commitments in accordance with ASC 326, which we refer to as the reserve for unfunded loan commitments ("RUC"). We use the loss rate and exposure at default framework to estimate a RUC. Loss rates for the expected funded balances are determined based on the associated pooled loan analysis loss rate and the exposure at default is based on an estimated utilization given default. The RUC was $407,000 and $484,000 as of September 30, 2026 and December 31, 2025. We recorded a provision for unfunded loan commitments of $0, a reversal of provision for unfunded loan commitments of $77,000, and a reversal of provision for unfunded loan commitments of $125,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025. We recorded a reversal of provision for unfunded loan commitments of $77,000 and $225,000 for the nine months ended September 30, 2026 and 2025.

In addition, we invest in Small Business Investment Company funds, other equity investments for CRA purposes and investments in fintech venture funds. Pursuant to these investments, we may commit to an investment amount to be fulfilled in future periods. These unfunded commitments are not on the Company's balance sheets and totaled $1.1 million as of September 30, 2026 and $1.6 million as of December 31, 2025.

We are involved in various matters of litigation which have arisen in the ordinary course of business and accruals for estimates of potential losses have been provided when necessary and appropriate under generally accepted accounting principles. In the opinion of management, the disposition of such pending litigation will not have a material effect on the Company's consolidated financial statements.