Borrowings

12 Months Ended

Dec. 31, 2020

The Company has a maximum line of credit with the FHLB approximating 45% of eligible assets. FHLB advances are subject to collateral criteria that require the Company to pledge assets under a blanket pledge arrangement as collateral for its borrowings from the FHLB. Based on assets currently pledged and advances currently outstanding at December 31, 2020, the Company's available borrowing line is $232.7 million, representing approximately 11% of total assets. Additional advances of up to 45% of eligible assets, or $946.2 million, are dependent on the availability of acceptable collateral such as marketable securities or real estate loans, although all FHLB advances are secured by a blanket pledge of the Company’s assets. The Company has outstanding FHLB advances of $14.8 million and $8.9 million as of December 31, 2020 and 2019, respectively, which were originated to match fund low income housing projects that qualify for long-term fixed interest rates. These advances have original terms of either 18 or 20 years with 30 year amortization periods and fixed interest rates ranging from 1.23% to 3.25%.

The Federal Reserve Bank is holding $79.5 million of loans as collateral to secure available borrowing lines through the discount window of $46.4 million at December 31, 2020. There were no discount window advances outstanding at December 31, 2020 and 2019. The Company paid less than $1,000 in interest in 2020 and 2019 on this agreement. The

Company utilized the Federal Reserve Bank's PPPLF to fund SBA PPP loans during the second quarter of 2020, but has repaid those funds in full as of June 30, 2020. This advance had an interest rate of 0.35%.

The Company is subject to provisions under Alaska state law, which generally limit the amount of the Bank's outstanding debt to 35% of total assets or $736.0 million at December 31, 2020 and 15% of total assets $244.7 million at December 31, 2019.

Securities sold under agreements to repurchase were zero for both December 31, 2020 and 2019. The average balance outstanding of securities sold under agreement to repurchase during 2020 and 2019 was zero and $15.2 million, respectively, and the maximum outstanding at any month-end was zero and $36.6 million, respectively, during the same time periods. The securities sold under agreement to repurchase were held by the FHLB under the Company’s control.

The future principal payments that are required on the Company’s borrowings as of December 31, 2020, are as follows:


(In Thousands)
2021			$312
2022			412
2023			421
2024			431
2025			441
Thereafter			12,800
Total			$14,817

The Company recognized interest expense of $387,000, $291,000, and $273,000 on borrowings and securities sold under repurchase agreements in 2020, 2019, and 2018, respectively. The average interest rates paid on long-term debt in the same periods was 3.12%, 3.39%, and 3.39%, respectively.