COMMUNITY BANCORP VT
For the period ended Dec 31, 2023. Filed Mar 29, 2024.
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FY2023 · Filed Mar 29, 2024
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EX-13 · Modifications of Loans
Modifications of Loans
A loan is considered modified if, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider.
The Company is deemed to have granted such a concession if it has modified a loan in any of the following ways:
| · | Reduced accrued interest; |
| · | Reduced the original contractual interest rate to a rate that is below the current market rate for the borrower; |
| · | Converted a variable-rate loan to a fixed-rate loan; |
| · | Extended the term of the loan beyond an insignificant delay; |
| · | Deferred or forgiven principal in an amount greater than three months of payments; |
| · | Performed a refinancing and deferred or forgiven principal on the original loan; |
| · | Capitalized protective advance to pay delinquent real estate taxes; or |
| · | Capitalized delinquent accrued interest. |
An insignificant delay or insignificant shortfall in the number of payments typically would not require the loan to be accounted for as modified. However, pursuant to regulatory guidance, any payment delays longer than three months is generally not considered insignificant. Management’s assessment of whether a concession has been granted also takes into consideration payments expected to be received from third parties, including third-party guarantors, provided the third party can perform on the guarantee.
The Company’s modified loans are principally a result of extending loan repayment terms to relieve cash flow difficulties. The Company has only, on a limited basis, reduced accrued interest or reduced interest rates for borrowers below the current market rate for the borrower. The Company has not generally forgiven principal within the terms of original restructurings, nor converted variable rate terms to fixed rate terms. However, the Company evaluates each potential loan modification on its own merits and does not foreclose the granting of any concession. In connection with modifications, the Company considers applicable regulatory guidance, including a 2023 interagency Policy Statement on Prudent Commercial Real Estate Loan Accommodations and Workouts.
There were no loan modifications during 2023.
Prior to adoption of ASU 2022-02, new TDRs, by portfolio segment, for the periods presented were as follows:
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