Company: CMTV
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001654954-25-009542
Chunk: 78

Company: COMMUNITY BANCORP /VT
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 78
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The credit loss expense was made up of the following components for the periods indicated:

Three Months Ended June 30,  Change   2025  2024  $   % Credit loss expense - loans $394,622  $351,921  $42,701   12.13%Credit loss expense (reversal) - OBS credit exposure  12,424   (20,339)  32,763   -161.08%Credit loss expense $407,046  $331,582  $75,464   22.76%

Six Months Ended June 30,  Change   2025  2024  $  % Credit loss expense - loans $813,496  $669,721  $143,775   21.47%Credit loss reversal - OBS credit exposure  (81,396)  (24,560)  (56,836)  231.42%Credit loss expense $732,100  $645,161  $86,939   13.48%

The increase in the credit loss expense on loans in both periods of 2025 compared to the same periods of 2024, was due in part to changes in the economic forecast, prepayments speeds, loan curtailments and adjustments to certain qualitative factors used in the model, as well as an increase in the volume of the loan portfolio.  The increase in the OBS credit exposure for the three months ended June 30, 2025 is attributable to an increase in unfunded loan commitments under contract and the decrease in the six months ended June 30, 2025 is attributable to a decrease in unfunded loan commitments under contract. 

ACL and provisions –The Company’s ACL policy provides guidance in maintaining an adequate methodology for establishing, estimating, and maintaining allowances for credit losses under ASC 326.  The policy creates a measurement model to establish a proper ACL based on current expected credit losses rather than losses incurred.

The Company maintains an ACL at a level that management believes is appropriate to absorb losses inherent in the loan portfolio as of the measurement date (See Note 5 of the accompanying unaudited interim consolidated financial statements).  Although the Company, in establishing the ACL, considers the expected inherent losses in individual loans and pools of loans, the ACL is a general reserve available to absorb all credit losses in the loan