HVBC 2016 Annual Report

HV Bancorp, Inc. and Subsidiary Notes to the Consolidated Financial Statements Years Ended June 30, 2017 and 2016 88 Open mortgage loan commitments granted to loan applicants at June 30, 2017 and 2016 are $21.4 million and $26.2 million, respectively. Open commercial loan commitments granted to loan applicants at June 30, 2017 and 2016 are $600,000 and $1.8 million, respectively. At June 30, 2017 and 2016, the Company had forward loan sales commitments amounting to $21.4 million and $30.1 million, respectively. The Company had mandatory TBAs amounting to $17.5 million and $22.0 million, respectively. The undisbursed portion of open-ended HELOCs at June 30, 2017 and 2016 are $7.9 million, and $7.2 million, respectively. The undisbursed portion of open-ended commercial and commercial real estate lines of credit at June 30, 2017 and 2016 are $134,000 and $78,000, respectively. There were no outstanding performance standby letters of credit at June 30, 2017 and 2016. In the normal course of business, the Company sells loans in the secondary market. As is customary in such sales, the Company provides indemnification to the buyer under certain circumstances. This indemnification may include the obligation to repurchase loans or refund fees by the Company, under certain circumstances. In most cases, repurchases and losses are rare, and no provision is made for losses at the time of sale. When repurchases and losses are probable and reasonably estimable, a provision is made in the financial statements for such estimated losses. There was no provision for losses from repurchases as of June 30, 2017 and 2016. Residential mortgage loans serviced for others at June 30, 2017 and 2016 are $4.7 million and $5.6 million, respectively. The Company is required to maintain certain average reserve balances as established by the FRB. The amounts of this reserve balance for the reserve computation period, which included June 30, 2017 and 2016, were $769,000 and $790,000, respectively, which were satisfied through the restriction of vault cash held at the Company's branches. No additional reserves were required to be maintained at the FRB of Philadelphia in excess of the required $25,000 clearing balance requirement. In connection with the operation of certain branch and administrative offices, the Company has entered into operating leases for periods ranging from 1 to 30 years. Total rental expense for the years ended June 30, 2017 and 2016 were $461,000 and $466,000, respectively. As of June 30, 2017, future minimum lease payments under such operating leases are: (Dollars in thousands) 2018 $ 447 2019 352 2020 234 2021 77 2022 58 Thereafter 997 $ 2,165 15. Concentrations At June 30, 2017 and 2016, the Company’s lending activities are concentrated in Southeastern Pennsylvania, with the largest concentration in Montgomery, Bucks and Philadelphia Counties. The performance of the Company's loan portfolio is affected by economic conditions in the borrowers' geographic region.