CITIZENS HOLDING CO MS

Commitments to Extend Credit

In the ordinary course of business, the Company makes various commitments and incurs certain contingent liabilities to fulfill the financing needs of its customers. These commitments and contingent liabilities include commitments to extend credit and issue standby letters of credit. They involve, to varying degrees, elements of credit risk in excess of the amount recognized in the statements of financial condition. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. At* December 31, 2023and December 31, 2022,commitments related to unused lines of credit were $99,369 and $75,602, respectively, and standby letters of credit were $16,089 and $5,438, respectively. The fair value of such commitments isnot* materially different than stated values. As some of these commitments are expected to expire without being drawn upon, the total commitment amount doesnot necessarily represent future cash requirements. The Company applies the same credit policies and standards as it does in the lending process when making these commitments. The collateral obtained is based upon the assessed credit worthiness of the borrower. Collateral held varies, but* may*include accounts receivable, crops, livestock, inventory, property and equipment, residential real estate and income-producing commercial properties.

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Note16: Continued