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ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)
 12 Months Ended
Dec. 31, 2022
ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) [Abstract]  
ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) [Text Block]
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,
 
December 31,
2022
2021
(In thousands)
Short-term
Fixed
-rate advances from FHLB
(1)
$
475,000
$
-
Long-term
Fixed
-rate advances from FHLB
(2)
200,000
200,000
$
675,000
$
200,000
(1)
Weighted-average interest rate of
4.56
% as of December 31, 2022.
(2)
Weighted-average interest rate of
4.25
% and
2.16
% as of December 31, 2022 and 2021, respectively.
 
 
 
 
 
 
Advances from FHLB mature as follows as of the indicated date:
December 31, 2022
(In thousands)
Within one month
$
350,000
Over one to three months
125,000
Over three to five years
200,000
 
Total
$
675,000
The $
200.0
 
million in
 
FHLB advances
 
outstanding as
 
of December
 
31, 2021
 
matured and
 
were repaid
 
during the
 
third quarter
 
of
2022. In
 
addition, during
 
the fourth
 
quarter of
 
2022, the
 
Corporation added
 
$
475.0
 
million of
 
short-term FHLB
 
advances and
 
$
200.0
million of long-term FHLB advances.
The maximum
 
aggregate balance
 
of advances
 
from the FHLB
 
outstanding at
 
any month-end
 
during the
 
years ended
 
December 31,
2022 and
 
2021 was
 
$
675.0
 
million and
 
$
440.0
 
million, respectively.
 
The total
 
average balance
 
of FHLB
 
advances during
 
2022 was
$
179.5
 
million (2021 - $
354.1
 
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
 
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, 2022 and
2021, the
 
estimated value
 
of specific
 
mortgage loans
 
pledged as
 
collateral amounted
 
to $
1.3
 
billion and
 
$
1.4
 
billion, respectively,
 
as
computed
 
by
 
the
 
FHLB
 
for
 
collateral
 
purposes,
 
which
 
represents
 
a
 
haircut
 
of
14
%
 
and
17
%
 
as
 
of
 
December
 
31,
 
2022
 
and
 
2021,
respectively.
 
The
 
carrying
 
value
 
of
 
such
 
loans
 
as
 
of
 
December
 
31,
 
2022
amounted
 
to
 
$
1.8
 
billion
 
(2021
-
 
$
1.8
 
billion).
 
As
 
of
December
 
31,
 
2022,
 
the
 
estimated
 
value
 
of
 
U.S.
 
government-sponsored
 
agencies’
 
obligations
 
and
 
U.S.
 
agencies
 
MBS
 
pledged
 
as
collateral
 
amounted
 
to $
238.1
 
million.
 
As of
 
December
 
31,
 
2022,
 
the Corporation
 
had
 
additional
 
capacity
 
of approximately
 
$
644.2
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.