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

Company: Embassy Bancorp, Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 7A
Chunk 10
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 Atlantic Community Bankers Bank (“ACBB”) stock.  The restricted stocks have no quoted market value and are carried at cost.  Federal law requires a member institution of the FHLB to hold stock of its district FHLB according to a predetermined formula. Management evaluates the FHLB and ACBB restricted stock for impairment. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the issuer as compared to the capital stock amount for the issuer and the length of time this situation has persisted, (2) commitments by the issuer to make payments required by law or regulation and the level of such payments in relation to the operating performance of the issuer, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the issuer. Management believes no impairment charge is necessary related to the FHLB or ACBB restricted stock as of December 31, 2024. No impairment charge was taken related to the FHLB or ACBB restricted stock as of December 31, 2023.  Loans Receivable Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield using the effective interest method.  Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective interest method.  Delinquency fees are recognized in income when collected. The loans receivable portfolio is segmented into commercial and consumer loans. Commercial loans consist of thefollowing classes: commercial real estate, commercial construction and commercial term loans. Consumer loans consist of thefollowing classes: residential real estate and other consumer loans. The Company makes commercial loans for real estate development and other business purposes required by the customer base.  The Company’s credit policies determine advance rates against the different forms of collateral that can be pledged for commercial loans.  Typically, the majority of loans will be limited to a percentage of their underlying collateral values such as real estate values, equipment, eligible accounts receivable and inventory.  Individual loan advance rates may be higher or lower depending upon