Hanover Bancorp, Inc. /MD Commitments Disclosure
Note 14. Loan Commitments and Other Related Activities
Some financial instruments such as loan commitments, credit lines, letters of credit, and overdraft protection are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.
The contractual amounts of financial instruments with off-balance sheet risk were as follows:
December 31, | ||||||||||||
| 2025 | 2024 | ||||||||||
(in thousands) | Fixed Rate | Variable Rate | Fixed Rate | Variable Rate | ||||||||
Standby letters of credit | $ | 805 | $ | — | $ | 812 | $ | — | ||||
Loan commitments outstanding |
| 22,489 |
| 18,108 |
| 3,008 |
| 34,596 | ||||
Unused lines of credit |
| 12,997 |
| 107,351 |
| 14,415 |
| 78,501 | ||||
Commitments to make loans are generally made for periods of 60 days or less. The fixed rate loan commitments at December 31, 2025 have interest rates ranging from 5.62% to 7.15% and maturities ranging from 1 year to 30 years. The fixed rate loan commitments at December 31, 2024 have interest rates ranging from 6.625% to 7.75% and maturities ranging from 3 years to 30 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Dec 21, 2023 | |
| 2022 | Dec 23, 2022 | |
| 2021 | Dec 23, 2021 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.