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ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)
 12 Months Ended
Dec. 31, 2023
ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) [Abstract]  
ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)
NOTE 13 – ADVANCES
 
FROM THE FEDERAL HOME LOAN BANK (“FHLB
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following is a summary of the advances from the FHLB as of the indicated dates:
December 31, 2023
December 31, 2022
(In thousands)
Short-term
Fixed
-rate advances from the FHLB
(1)
$
-
$
475,000
Long-term
Fixed
-rate advances from the FHLB
(2)
500,000
200,000
$
500,000
$
675,000
(1)
Weighted-average interest rate of
4.56
% as of December 31, 2022.
(2)
Weighted-average interest rate of
4.45
% and
4.25
% as of December 31, 2023 and 2022, respectively.
 
 
 
 
 
 
 
Advances from the FHLB mature as follows as of the indicated date:
December 31, 2023
(In thousands)
Over one to five years
(1)
$
500,000
(1) Average remaining term to maturity of
2.49
 
years.
During 2023, the
 
Corporation added $
300.0
 
million of long-term FHLB
 
advances at an
 
average cost of
4.59
%, and repaid its
 
short-
term FHLB advances.
The maximum
 
aggregate balance
 
of advances
 
from the
 
FHLB outstanding
 
at any month
 
end during
 
the years
 
ended December
 
31,
2023 and
 
2022 was
 
$
925.0
 
million and
 
$
675.0
 
million, respectively.
 
The total
 
average balance
 
of FHLB
 
advances during
 
2023 was
$
541.0
 
million (2022 - $
179.5
 
million).
The Corporation
 
receives advances
 
and applies
 
for the
 
issuance of
 
letters of
 
credit from
 
the FHLB
 
under an
 
Advances, Collateral
Pledge, and
 
Security Agreement
 
(the “Collateral
 
Agreement”), which
 
requires the
 
Corporation to
 
maintain a
 
minimum of
 
qualifying
mortgage collateral or
 
U.S. Treasury
 
or U.S. agencies MBS
 
collateral, as applicable.
 
The amount of collateral
 
required for an
 
advance
incorporates a
 
collateral discount
 
or “haircut,”
 
which is incorporated
 
into the member’s
 
pledge and determined
 
by the FHLB.
 
Haircut
refers to the percentage
 
by which an asset’s
 
market value is reduced
 
for the purpose of collateral
 
levels. As of December
 
31, 2023 and
2022,
 
the estimated
 
value of
 
specific mortgage
 
loans pledged
 
as collateral,
 
net of
 
haircut, amounted
 
to $
1.2
 
billion and
 
$
1.3
 
billion,
respectively,
 
as
 
computed
 
by
 
the
 
FHLB
 
for
 
collateral
 
purposes.
 
As
 
of
 
December
 
31,
 
2023
 
and
 
2022,
 
the
 
estimated
 
value
 
of
 
U.S.
government-sponsored agencies’
 
obligations and U.S.
 
agencies MBS pledged
 
as collateral, net
 
of haircut, amounted
 
to $
454.0
 
million
and $
238.1
 
million, respectively.
 
As of December
 
31, 2023, the
 
Corporation had
 
additional capacity of
 
approximately $
978.3
 
million
on this
 
credit facility
 
based on
 
collateral pledged
 
at the
 
FHLB, adjusted
 
by a
 
haircut reflecting
 
the perceived
 
risk associated
 
with the
collateral. Advances may be repaid prior to
 
maturity, in whole or
 
in part, at the option of the borrower upon
 
payment of any applicable
fee
 
specified
 
in
 
the
 
contract
 
governing
 
such
 
advance.
 
In
 
calculating
 
the
 
fee,
 
due
 
consideration
 
is
 
given
 
to
 
(i)
 
all
 
relevant
 
factors,
including,
 
but
 
not
 
limited
 
to,
 
any
 
and
 
all
 
applicable
 
costs
 
of
 
repurchasing
 
and/or
 
prepaying
 
any
 
associated
 
liabilities
 
and/or
 
hedges
entered into with respect to the
 
applicable advance; (ii) the financial characteristics,
 
in their entirety,
 
of the advance being prepaid;
 
and
(iii),
 
in
 
the
 
case
 
of
 
adjustable-rate
 
advances,
 
the
 
expected
 
future
 
earnings
 
of
 
the
 
replacement
 
borrowing
 
as long
 
as
 
the replacement
borrowing is at
 
least equal to the
 
original advance’s
 
par value and the
 
replacement borrowing’s
 
tenor is at least
 
equal to the remaining
maturity of the prepaid advance.