COMMUNITY BANCORP VT

Year ended December 31, 2022

There were no TDRs for which there was a payment default during the twelve-month period ended December 31, 2022.

Prior to adoption of ASU 2022-02, TDRs were treated as other impaired loans and carried individual specific reserves with respect to the calculation of the ALL. These loans were categorized as non-performing, may have been past due, and were generally adversely risk rated. The TDRs that had defaulted under their restructured terms were generally in collection status and their ALL reserve was typically calculated using the fair value of collateral method.

Prior to adoption of ASU 2022-02, the specific allowances within the ALL related to TDRs as of December 31, 2022 totaled $106,280.

As of the balance sheet dates, the Company evaluates whether it is contractually committed to lend additional funds to debtors with impaired, non-accrual or modified loans. The Company is contractually committed to lend on one SBA guaranteed line of credit to a borrower whose lending relationship was previously modified.

Note 5. Loan Servicing

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others were $136,695,808 and $142,567,853 at December 31, 2023 and 2022, respectively. Proceeds on loan sales of $8,034,329 and $12,865,842 were realized for December 31, 2023 and 2022, with net gains of $153,491 and $237,881 for the respective periods. Most loan sales are with servicing rights retained.

The following table summarizes changes in MSRs for the years ended December 31,

Note 6. Bank Premises and Equipment

The major classes of bank premises and equipment and accumulated depreciation and amortization at December 31 were as follows:

Note 7. Leases

The Company has operating and finance leases for some of its bank premises, with remaining lease terms of one year to 18 years. Some of the operating leases have options to renew, which are reflected in the years disclosed. The Company’s operating lease right-of-use assets and finance lease assets are included in “Bank premises and equipment, net” in the consolidated balance sheet and operating lease liabilities and finance lease liabilities are included in Accrued interest and other liabilities in the consolidated balance sheet.

The components of lease expense for the periods presented were as follows:

Total rental expense not associated with operating lease costs above amounted to $13,691 and $14,142 for the years ended December 31, 2023 and 2022, respectively.

Supplemental information related to leases as of the balance sheet dates was as follows: