Transfers of Financial Assets

3 Months Ended

Mar. 31, 2023

Transfers of Financial Assets

Transfers of Financial Assets

6. Transfers of Financial Assets

The Company’s transfers of financial assets with continuing interest may include pledges of collateral to secure public deposits and repurchase agreements, FHLB and FRB borrowing capacity, automated clearing house (“ACH”) transactions and interest rate swaps.

For public deposits and repurchase agreements, the Company enters into bilateral agreements with the entity to pledge investment securities as collateral in the event of default. The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreement should the Company be in default. The counterparty has the right to sell or repledge the investment securities. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional investment securities. For transfers of assets with the FHLB and the FRB, the Company enters into bilateral agreements to pledge loans as collateral to secure borrowing capacity. For ACH transactions, the Company enters into bilateral agreements to collateralize possible daylight overdrafts. For interest rate swaps, the Company enters into bilateral agreements to pledge collateral when either party is in a negative fair value position to mitigate counterparty credit risk. Counterparties to ACH transactions, certain interest rate swaps, the FHLB and the FRB do not have the right to sell or repledge the collateral.

The carrying amounts of the assets pledged as collateral to secure public deposits, borrowing arrangements and other transactions as of March 31, 2023 and December 31, 2022 were as follows:

(dollars in thousands)	March 31, 2023		December 31, 2022
Public deposits	$	2,760,479	$	2,977,693
Federal Home Loan Bank		3,493,694		3,451,070
Federal Reserve Bank		1,646,765		1,704,803
ACH transactions		131,344		133,173
Interest rate swaps		20,678		31,091
Total	$	8,052,960	$	8,297,830

As the Company did not enter into reverse repurchase agreements or repurchase agreements, no collateral was accepted as of March 31, 2023 and December 31, 2022. In addition, no debt was extinguished by in-substance defeasance.