Company: CMTV
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001654954-25-005620
Chunk: 32

Company: COMMUNITY BANCORP /VT
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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 of these extensions of credit. The overall health of the economy, including unemployment rates, has an impact on the credit quality of this segment.

 21Table of Contents

Specific component Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are also not included in the collective evaluation. In general, loans individually evaluated for estimated credit losses include those (i) greater than $100,000 with a nonaccrual status or (ii) have other unique characteristics differing from the portfolio segment. Specific reserves are established when appropriate for such loans based on the present value of expected future cash flows of the loan. However, when management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Modifications of Loans  A loan is considered modified if, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount. The Company is deemed to have granted such a concession if it has modified a loan in any of the following ways:  ·Reduced accrued interest; ·Reduced the original contractual interest rate to a rate that is below the current market rate for the borrower; ·Converted a variable-rate loan to a fixed-rate loan; ·Extended the term of the loan beyond an insignificant delay; ·Deferred or forgiven principal in an amount greater than three months of payments; ·Performed a refinancing and deferred or forgiven principal on the original loan; ·Capitalized protective advance to pay delinquent real estate taxes; or ·Capitalized delinquent accrued interest.  An insignificant delay or insignificant shortfall in the number of payments typically would not require the loan to be accounted for as modified. However, pursuant to regulatory guidance, any payment delays longer than three months is generally not considered insignificant. Management’s assessment of whether a concession has been granted also takes into consideration payments expected to be received from third parties, including third-party guarantors