Securities Sold Under Agreements to Repurchase ("Repurchase agreements")

9 Months Ended

Sep. 30, 2024

Securities Sold Under Agreements to Repurchase ("Repurchase agreements")

Securities Sold Under Agreements to Repurchase ("Repurchase agreements")

(7)   Securities Sold Under Agreements to Repurchase (“repurchase agreements”)

The Bank utilizes repurchase agreements to facilitate the needs of our customers and provide additional funding to our balance sheet. Repurchase agreements are transactions whereby we offer to sell to a counterparty an undivided interest in an eligible security at an agreed upon purchase price, and which obligates the Bank to repurchase the security on an agreed upon date at an agreed upon repurchase price plus interest at an agreed upon rate. Securities sold under repurchase agreements are recorded at the amount of cash received in connection with the transaction and are reflected in the accompanying consolidated balance sheet. Repurchase agreements are subject to terms and conditions of the master repurchase agreements between the Bank and the customer and are accounted for as secured borrowings. At September 30, 2024 and December 31, 2023, repurchase agreements totaled $8.4 million and $86.7 million, respectively.

These borrowings were collateralized with government-sponsored enterprise securities with a market value of $17.2 million and $89.8 million at September 30, 2024 and December 31, 2023, respectively. We monitor collateral levels on a continuous basis and maintain records of each transaction specifically describing the applicable security and the counterparty’s fractional interest in that security, and we segregate the security from its general assets in accordance with regulations governing custodial holdings of securities. The primary risk with repurchase agreements is market risk associated with the securities securing the transactions, as we may be required to provide additional collateral based on fair value changes of the underlying securities.