SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

6 Months Ended

Jun. 30, 2020

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

6. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER SHORT-TERM BORROWINGS

Securities sold under agreements to repurchase consist of short-term excess funds from correspondent banks, repurchase agreements and overnight liabilities to deposit clients arising from the Bank’s treasury management program. While comparable to deposits in their transactional nature, these overnight liabilities to clients are in the form of repurchase agreements. Repurchase agreements collateralized by securities are treated as financings; accordingly, the securities involved with the agreements are recorded as assets and are held by a safekeeping agent and the obligations to repurchase the securities are reflected as liabilities. Should the fair value of currently pledged securities fall below the associated repurchase agreements, the Bank would be required to pledge additional securities. To mitigate the risk of under collateralization, the Bank typically pledges at least two percent more in securities than the associated repurchase agreements. All such securities are under the Bank’s control.

At June 30, 2020 and December 31, 2019, all securities sold under agreements to repurchase had overnight maturities. Additional information regarding securities sold under agreements to repurchase follows:

(dollars in thousands)	June 30, 2020			December 31, 2019
Outstanding balance at end of period	$	177,397		$	167,617
Weighted average interest rate at end of period		0.04	%		0.32	%
Fair value of securities pledged:
U.S. Treasury securities and U.S. Government agencies	$	7,515		$	70,015
Mortgage backed securities - residential		167,945			134,265
Collateralized mortgage obligations		12,915			17,030
Total securities pledged	$	188,375		$	221,310

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(dollars in thousands)	2020			2019			2020			2019
Average outstanding balance during the period	$	176,541		$	220,189		$	192,755		$	225,864
Average interest rate during the period		0.04	%		0.60	%		0.14	%		0.67	%
Maximum outstanding at any month end during the period	$	177,397		$	226,002		$	177,397		$	226,002