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OTHER SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2021

15. OTHER SHORT-TERM BORROWINGS

The following is a summary of other short-term borrowings:


(In thousands)	December 31, 2021		December 31, 2020
Repurchase agreements	$	1,862	$	—
AFX		—		120,000
Other short-term borrowings	$	1,862	$	120,000

Repurchase Agreements

The Bank utilizes securities sold under agreements to repurchase (“repurchase agreements”) as part of its borrowing policy to add liquidity. Repurchase agreements represent funds received from customers, generally on an overnight basis, which are

collateralized by investment securities, of which 100% were pass-through MBS issued by GSEs with a carrying amount of $3.8 million at December 31, 2021.

Repurchase agreements are financing arrangements with $1.9 million maturing during the first quarter of 2022. At maturity, the securities underlying the agreements are returned to the Bank. The primary risk associated with these secured borrowings is the requirement to pledge a market value-based balance of collateral in excess of the borrowed amount. The excess collateral pledged represents an unsecured exposure to the lending counterparty. As the market value of the collateral changes, both through changes in discount rates and spreads as well as related cash flows, additional collateral may need to be pledged. In accordance with the Bank’s policies, eligible counterparties are defined and monitored to minimize exposure.

Interest expense on repurchase agreements for the year ended December 31, 2021 was $3 thousand. There was no interest expense on repurchase agreements for the years ended December 31, 2020 and 2019.

AFX

The Bank is a member of AFX, through which it may either borrow or lend funds on an overnight or short-term basis with other member institutions. The availability of funds changes daily. Interest expense on AFX borrowings for the years ended December 31, 2021, 2020 and 2019 was $1 thousand, $45 thousand, and $226 thousand, respectively.