Company: EMYB
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001449794-25-000035
Chunk: 35

Company: Embassy Bancorp, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 35
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26  $ 4,321  $ (424) $ 4,771  $ (26) Provision for Credit Losses and Reserve for Unfunded Loan Commitments The allowance for credit losses is established through provisions for credit losses charged against income. Loans deemed to be uncollectible are charged against the allowance for credit losses, and subsequent recoveries, if any, are credited to the allowance. The measurement of expected credit losses also applies to off-balance sheet credit exposures such as loan commitments and unused lines of credit. The allowance for credit losses is maintained at a level management considers to be adequate to provide for losses that can be reasonably anticipated over the expected life of the loans. Management’s periodic evaluation of the adequacy of the allowance is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the 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 September 30, 2025, the provision for credit losses on loans was $36 thousand and the credit for credit losses on unused commitments was $9 thousand, compared to credit for credit losses on loans of $40 thousand and the provision for credit losses on unused commitments of $10 thousand for the three months ended September 30, 2024. In the three months ended September 30, 2025 and September 30, 2024, there were no charge-offs and no recoveries.  For the nine months ended September 30, 2025, the credit for credit losses on loans was $73 thousand and the credit for credit losses on unused commitments was $31 thousand, compared to credit for credit losses on loans of $484 thousand and the provision for credit losses on unused commitments of $99 thousand