SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2023

SHORT-TERM BORROWINGS.

SHORT-TERM BORROWINGS

NOTE 6 — SHORT-TERM BORROWINGS

Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, Federal Discount Window, and FHLB advances, which generally represent overnight or less than 30 -day borrowings.

Short-term borrowings and weighted-average interest rates at and for the years ended December 31, 2023 and 2022 are as follows:

(Dollars in thousands)	December 31, 2023				December 31, 2022
			Average				Average
	Amount		Rate		Amount		Rate
Federal funds purchased	$	—	6.57	%	$	—	—	%
Securities sold under agreements to repurchase		19,708	3.28	%		20,368	0.84	%
Federal Discount Window		1	4.99	%		—	2.78	%
Federal Home Loan Bank of Pittsburgh		133,759	5.45	%		133,050	2.82	%
Total	$	153,468	5.21	%	$	153,418	2.21	%

At December 31, 2023, the maximum borrowing capacity of federal funds purchased and the Federal Discount Window was $15,000,000 and $8,547,000, respectively. Please refer to Note 7 ― Long-Term Borrowings for the Corporation’s maximum borrowing capacity at FHLB.

Securities Sold Under Agreements to Repurchase (“Repurchase Agreements”)

The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Corporation may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Corporation to repurchase the assets.

As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability on the Corporation’s consolidated balance sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is not offsetting or netting of the investment securities assets with the repurchase agreement liabilities. In addition, as the Corporation does not enter into reverse repurchase agreements, there is no such offsetting to be done with the repurchase agreements.

The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Corporation be in default (e.g., fails to make an

interest payment to the counterparty). The collateral is held by a correspondent bank in the counterparty’s custodial account. The counterparty has the right to sell or repledge the investment securities.

The following table presents the short-term borrowings subject to an enforceable master netting arrangement or repurchase agreements as of December 31, 2023 and 2022.

(Dollars in thousands)			Gross		Net Amounts
			Amounts		of Liabilities
			Offset		Presented
	Gross		in the		in the
	Amounts of		Consolidated		Consolidated				Cash
	Recognized		Balance		Balance		Financial		Collateral		Net
	Liabilities		Sheet		Sheet		Instruments		Pledge		Amount
December 31, 2023
Repurchase agreements (a)	$	19,708	$	—	$	19,708	$	(19,708)	$	—	$	—
December 31, 2022
Repurchase agreements (a)	$	20,368	$	—	$	20,368	$	(20,368)	$	—	$	—

(a) As of December 31, 2023 and 2022, the fair value of securities pledged in connection with repurchase agreements was $28,902,000 and $34,160,000, respectively.

The following table presents the remaining contractual maturity of the master netting arrangement or repurchase agreements as of December 31, 2023.

(Dollars in thousands)	Remaining Contractual Maturity of the Agreements
	Overnight				Greater		Greater
	and		Up to		30 -90		than
	Continuous		30 days		Days		90 Days		Total
December 31, 2023:
Repurchase agreements and repurchase-to-maturity transactions:
U.S. Treasury and/or agency securities	$	19,708	$	—	$	—	$	—	$	19,708
Total	$	19,708	$	—	$	—	$	—	$	19,708