Advances from Federal Home Loan Bank

12 Months Ended

Jun. 30, 2021

Advances from Federal Home Loan Bank

Advances from Federal Home Loan Bank

Note 12 – Advances from Federal Home Loan Bank

The Bank is a member of the FHLB system, which consists of 11 regional Federal Home Loan Banks. The FHLB provides a central credit facility primarily for member institutions. The Bank has a maximum borrowing capacity with the FHLB of Pittsburgh of approximately $280.8 million and $223.0 million at June 30, 2021 and June 30, 2020, respectively, of which $41.0 million and $64.2 million, exclusive of purchase accounting fair value adjustment, was outstanding at June 30, 2021 and June 30, 2020, respectively. FHLB advances are secured by qualifying assets of the Bank, which include Federal Home Loan Bank stock and loans. The Bank had $407.4 million and $322.0 million of loans pledged as collateral as of June 30, 2021 and June 30, 2020, respectively. The Bank, as a member of the FHLB of Pittsburgh, is required to acquire and hold shares of capital stock in that FHLB. The Bank was in compliance with the requirements for the FHLB of Pittsburgh with an investment of $2.7 million and $3.9 million at June 30, 2021 and June 30, 2020, respectively. On August 24, 2020, the Company paid off $23.2 million of advances from the FHLB of Pittsburgh due to the low interest rate environment and excess cash held on the Company’s Statement of Financial Condition.

Advances from the FHLB of Pittsburgh consist of the following as of June 30, 2021 and 2020:

(Dollars in thousands)	June 30, 2021		June 30, 2020
FHLB advances:
Convertible	$	20,000	$	20,000
Fixed		14,000		21,767
Mid-term		7,000		23,125
Total FHLB advances	$	41,000	$	64,892

Regarding the convertible rate notes, the FHLB of Pittsburgh has the option to convert the notes at rates ranging from 0.01% to 0.23% above the three-month LIBOR on a quarterly basis upon the arrival of specified conversion dates or the occurrence of specific events. Accordingly, contractual maturities above may differ from expected maturities. In the event the FHLB of Pittsburgh converts these advances, the Bank has the option of accepting the variable rate or repaying the advances without penalty.

Contractual maturities and the associated weighted average interest rate of FHLB advances at June 30, 2021 and 2020 are as follows:

	June 30, 2021
(Dollars in thousands)			Weighted
Twelve months ending:	Amount		Average Rate
2022	$	7,000	2.03	%
2023		13,000	2.74	%
2024		7,000	2.00	%
2025		14,000	2.92	%
Total FHLB advances	$	41,000	2.55	%