Company: EMYB
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001449794-25-000009
Chunk: 31

Company: Embassy Bancorp, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 31
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 loan portfolio, current and forecasted economic conditions and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant change. The allowance consists of a collectively evaluated component and an individually evaluated component. The collectively evaluated component covers non-classified loans and classified loans not considered loans individually evaluated for credit losses, and is based on historical loss experience adjusted for forecasting factors and qualitative factors. The individually evaluated component relates to loans that are classified as loans individually evaluated for credit losses and/or restructured. For loans that are classified as loans individually evaluated for credit losses, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the loans individually evaluated for credit losses is lower than the carrying value of that loan. 

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 For the three months ended March 31, 2025, the provision for credit losses on loans was $56 thousand and the credit for credit losses on unused commitments was $9 thousand, compared to credit for credit losses of $158 thousand and the provision for credit losses on unused commitments of $86 thousand for the three months ended March 31, 2024. In the three months ended March 31, 2025 there were no charge-offs and no recoveries. In the three months ended March 31, 2024 there were no charge-offs and recoveries of $240 thousand.  The provision (credit) for credit losses is a function of the allowance for credit loss methodology that the Company uses to determine the appropriate level of the allowance for inherent credit losses after net charge-offs have been deducted. See the discussion below under “Credit Risk and Loan Quality” regarding the Company’s considerations of its March 31, 2025 allowance for credit loss levels. The allowance for credit losses is $12.2 million as of March 31, 2025, which is 0.96% of total loans receivable, compared to $12.5 million or 0.99% of total loans receivable as of March 31, 2024. At December 31, 2024, the allowance for credit losses was $12.2 million, which represented 0.96% of total loans receivable. Based principally on loan growth, economic conditions, asset quality, and loan-loss experience, including that of comparable institutions in the Company’s market area, the allowance is believed to be adequate to absorb any losses expected in the portfolio. Because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance