FEDERAL HOME LOAN BANK ADVANCES & OTHER BORROWINGS

9 Months Ended

Sep. 30, 2023

FEDERAL HOME LOAN BANK ADVANCES & OTHER BORROWINGS

FEDERAL HOME LOAN BANK ADVANCES & OTHER BORROWINGS

NOTE 6 – FEDERAL HOME LOAN BANK ADVANCES & OTHER BORROWINGS

Advances from the Federal Home Loan Bank (“FHLB”) at September 30, 2023 and December 31, 2022 are summarized as follows:

(Dollars in thousands)	September 30, 2023		December 31, 2022
Convertible advance maturing February 13, 2026; fixed rate of 4.184%	$	50,000	$	—
Convertible advance maturing May 7, 2027; fixed rate of 3.025%		50,000		—
Convertible advance maturing October 26, 2027; fixed rate of 3.530%		25,000		25,000
Convertible advance maturing January 25, 2028; fixed rate of 3.243%		50,000		—
Convertible advance maturing February 14, 2028; fixed rate of 3.625%		25,000		—
Convertible advance maturing May 8, 2028; fixed rate of 2.860%		50,000		—
Convertible advance maturing June 23, 2028; fixed rate of 3.655%		50,000		—
Convertible advance maturing June 16, 2032; fixed rate of 1.905%		—		50,000
Convertible advance maturing June 23, 2032; fixed rate of 1.950%		—		100,000
Convertible advance maturing August 6, 2032; fixed rate of 1.892%		—		100,000
Convertible advance maturing October 26, 2032; fixed rate of 3.025%		25,000		25,000
Convertible advance maturing May 12, 2037; fixed rate of 1.135%		—		75,000
Total FHLB advances	$	325,000	$	375,000

The FHLB advances outstanding at September 30, 2023 all have a conversion feature that allows the FHLB to call the advances after six months ($100.0 million) or one year ($225.0 million). At September 30, 2023 and December 31, 2022, the Company had a line of credit with the FHLB, set as a percentage of total assets, with maximum borrowing capacity of $1.04 billion and $1.01 billion, respectively. The available borrowing amounts are collateralized by the Company’s FHLB stock and pledged residential real estate loans, which totaled $2.30 billion and $2.29 billion at September 30, 2023 and December 31, 2022, respectively.

At September 30, 2023, the Company had unsecured federal funds lines available with correspondent banks of approximately $47.5 million. There were no advances outstanding on these lines at September 30, 2023.

At September 30, 2023, the Company had Federal Reserve Discount Window funds available of approximately $446.2 million. The funds are collateralized by a pool of construction and development, commercial real estate and commercial and industrial loans with carrying balances totaling $510.4 million as of September 30, 2023, as well as all of the Company’s municipal and mortgage backed securities. There were no outstanding borrowings on this line as of September 30, 2023.

The Company sells the guaranteed portion of certain SBA loans it originates and continues to service the sold portion of the loan. The Company sometimes retains an interest only strip or servicing fee that is considered to be more than customary market rates. An interest rate strip can result from a transaction when the market rate of the transaction differs from the stated rate on the portion of the loan sold.

The sold portion of SBA loans that have an interest only strip are considered secured borrowings and are included in other borrowings. Secured borrowings at September 30, 2023 and December 31, 2022 were $0 and $392,000, respectively.