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Offsetting Assets And Liabilities
 9 Months Ended
Sep. 30, 2018
Offsetting Assets And Liabilities [Abstract]  
Offsetting Assets And Liabilities

Note 8 – Offsetting Assets and Liabilities



The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities.  Under these arrangements, the Company may transfer legal ownership over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets.  As a result, these repurchase agreements are accounted for as collateralized financing arrangements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities.  The obligation to repurchase the securities is reflected as a liability in the Company's consolidated balance sheet, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities. In addition, as the Company does not enter into reverse repurchase agreements, there is no such offsetting to be done with the repurchase agreements.



The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., fails to make an interest payment to the counterparty). For private institution repurchase agreements, if the private institution counterparty were to default (e.g., declare bankruptcy), the Company could cancel the repurchase agreement (i.e., cease payment of principal and interest), and attempt collection on the amount of collateral value in excess of the repurchase agreement fair value. The collateral is held by a third party financial institution in the counterparty's custodial account. The counterparty has the right to sell or repledge the investment securities. For government entity repurchase agreements, the collateral is held by the Company in a segregated custodial account under a tri-party agreement.



The following table presents the liabilities subject to an enforceable master netting arrangement or repurchase agreements as of September 30, 2018 and December 31, 2017:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

Net Amounts

 

 

 

 

 

 

 

 

 



 

 

Gross

 

 

Gross Amounts

 

 

of Liabilities

 

 

 

 

 

 

 

 

 



 

 

Amounts of

 

 

Offset in the

 

 

Presented in the

 

 

 

 

 

Cash

 

 

 



 

 

Recognized

 

 

Consolidated

 

 

Consolidated

 

 

Financial

 

 

Collateral

 

 

 



 

 

Liabilities

 

 

Balance Sheet

 

 

Balance Sheet

 

 

Instruments

 

 

Pledged

 

 

Net Amount



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

(In Thousands)

September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase Agreements:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Institutions

 

$

 17,875 

 

$

 -

 

$

 17,875 

 

$

 (17,875)

 

$

 -

 

$

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase Agreements:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Institutions

 

$

 9,999 

 

$

 -

 

$

 9,999 

 

$

 (9,999)

 

$

 -

 

$

 -



As of September 30, 2018 and December 31, 2017, the fair value of securities pledged was $20.7 million and $15.8 million, respectively.