SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER BORROWINGS

12 Months Ended

Dec. 31, 2023

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER BORROWINGS

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER BORROWINGS

11.         SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER BORROWINGS

Other borrowings can consist of FHLB convertible advances, FHLB of Atlanta overnight advances, FHLB advances maturing within one year, federal funds purchased, Federal Reserve Board Discount Window, secured borrowings and securities sold under agreements to repurchase (“repo”) that mature within one year, which are secured transactions with customers. The balance in repo accounts at December 31, 2023 and 2022 was $3.0 million and $6.5 million, respectively.

At December 31, 2023 and 2022, we had pledged callable agency securities, residential government-sponsored mortgage-backed securities and collateralized mortgage obligations with a carrying value of $6.8 million and $14.2 million, respectively, to customers who require collateral for overnight repurchase agreements and deposits.

Other borrowings consist of the following (in thousands):

	December 31,
	2023			2022
FHLB collateral advances maturing 10/15/2024	$	30,000		$	—
Short-term FHLB advances maturing 1/3/2023		—			50,000
Short-term FHLB advances maturing 1/13/2023		—			100,000
Short-term FHLB advances maturing 1/23/2023		—			50,000
Short-term FHLB advances maturing 1/27/2023		—			125,000
Total FHLB advances		30,000			325,000
Securities sold under agreements to repurchase		3,044			6,445
Total	$	33,044		$	331,445
Weighted average interest rate at year end		5.57	%		4.19	%

We repaid our short-term FHLB advances of $325.0 million that were outstanding as of December 31, 2022 and matured in the first quarter of 2023. As of December 31, 2023, Primis Bank had lendable collateral value in the form of residential 1-4 family mortgages, HELOCs, commercial mortgage loans, and investment securities supporting borrowing capacity of approximately $596.1 million from the FHLB, of which the Company has used $30.0 million.

Each FHLB advance is payable at its maturity date, with a prepayment penalty for fixed rate advances paid off earlier than maturity. Residential 1-4 family mortgage loans in the amount of approximately $364.6 million and $405.2 million were pledged as collateral for FHLB advances as of December 31, 2023 and 2022, respectively. HELOCs in the amount of approximately $31.6 million and $27.4 million were pledged as collateral for FHLB advances at December 31, 2023 and 2022, respectively. Commercial mortgage loans in the amount of approximately $199.9 million and $169.6 million were pledged as collateral for FHLB advances as of December 31, 2023 and 2022, respectively. No investment securities were pledged as collateral as of December 31, 2023 and $3.5 million were pledged as collateral as of December 31, 2022. At December 31, 2023, Primis Bank had available collateral to borrow an additional $466.1 million from the FHLB.

In June 2023, the Bank took the necessary steps to participate in the Federal Reserve discount window borrowing program. As of December 31, 2023, the Bank had borrowing capacity of $596.4 million within the program and has not borrowed under the program during the year.

In March 2023, the Federal Reserve established the Bank Term Funding Program (“BTFP”) in response to industry disruption, offering loans with up to one year in maturity to eligible depository institutions in exchange for pledged collateral in the form of U.S. Treasuries, agency debt and mortgage-backed securities and other qualifying assets. Borrowing capacity under the BTFP is based on the par value, not fair value, of the collateral. As of December 31, 2023, we had securities available of $117.2 million for utilization with the BTFP, but no borrowings were utilized during 2023. When the BTFP expires, the Bank plans to pledge qualifying securities to the Federal Reserve discount window.

Secured Borrowings

The Company transferred $23.4 million in principal balance of loans to another financial institution in 2023 that were accounted for as secured borrowings. The balance of secured borrowings was $20.4 million as of December 31, 2023 and the remaining amortized cost balance of the underlying loans was $20.5 million. None of the loans underlying the secured borrowings were past due 30 days or greater or on nonaccrual as of December 31, 2023 and were all internally rated as “pass” loans as presented in our “credit quality indicators” section of “Note 4 – Loans and Allowance for Credit Losses”.  The loans were included in our allowance for credit losses process and an allowance was calculated on the loans as part of their inclusion in a pool with other loans with similar credit risk characteristics. There were no charge-offs of the loans underlying the secured borrowings during the year ended December 31, 2023. The underlying loans collateralize the borrowings and cannot be sold or pledged by the Company.