Company: EMYB
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001449794-25-000002
Chunk: 11

Company: Embassy Bancorp, Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 7A
Chunk 11
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 the financial strength of the borrower and/or term of the loan.  The assets financed through commercial term loans are used within the business for its ongoing operation.  Repayment of these kinds of loans generally comes from the cash flow of the business or the ongoing conversion of assets.  Commercial real estate loans include long-term loans financing commercial properties.  Repayments of these loans are dependent upon either the ongoing cash flow of the borrowing entity or the resale of or lease of the subject property.  Commercial real estate loans typically require a loan to value ratio of not greater than 80% and vary in terms. Residential mortgages and home equity loans are secured by the borrower’s residential real estate in either a first or second lien position.  Residential mortgages and home equity loans have varying interest rates (fixed or variable) depending on the financial condition of the borrower and the loan to value ratio.  Residential mortgages may have amortizations up to 30 years and home equity loans may have maturities up to 25 years.  Other consumer loans include installment loans, car loans, and overdraft lines of credit.  Some of these loans may be unsecured.‎ 

61    Embassy Bancorp, Inc.  

 For all classes of loans receivable, the accrual of interest may be discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing.  A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured.  When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed.  Interest received on nonaccrual loans, including impaired loans, generally is applied against principal.  Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt.  The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments. Allowance for Credit Losses On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss