FEDERAL HOME LOAN BANK ADVANCES, FEDERAL RESERVE BANK BORROWINGS AND OTHER BORROWINGS

9 Months Ended

Sep. 30, 2023

FEDERAL HOME LOAN BANK ADVANCES, FEDERAL RESERVE BANK BORROWINGS AND OTHER BORROWINGS

Federal Home Loan Bank (FHLB) Advances

The following table presents advances from the FHLB as of the dates indicated:


($ in thousands)	September 30, 2023			December 31, 2022
Fixed rate:
Outstanding balance (1)	$	811,000		$	711,000
Interest rates ranging from	0.64		%	0.64		%
Interest rates ranging to	3.70		%	3.70		%
Weighted average interest rate	3.04		%	2.97		%
Variable rate:
Outstanding balance	$	—		$	20,000
Weighted average interest rate	—		%	4.59		%

(1)Excludes $2.7 million and $3.7 million of unamortized debt issuance costs at September 30, 2023 and December 31, 2022.

As of September 30, 2023, FHLB advances consisted of $611 million in term advances with a weighted average life of 2.75 years and a weighted average interest rate of 2.91% and $200 million in putable advances with a weighted average life of 4.25 years and a weighted average interest rate of 3.44%. Term advances are payable at maturity date, and advances paid early are subject to a prepayment penalty. The putable advances can be called quarterly until maturity at the option of the FHLB beginning in December 2023.

FHLB advances are collateralized by a blanket lien on all real estate loans. As of September 30, 2023, our secured borrowing capacity with the FHLB totaled $2.42 billion, of which the Bank was eligible to borrow an additional $1.19 billion based on qualifying loans with an aggregate unpaid principal balance of $3.63 billion as of that date.

The Bank’s investment in the capital stock of the FHLB of San Francisco totaled $25.7 million and $22.6 million at September 30, 2023 and December 31, 2022.

Federal Reserve Bank (FRB) Borrowings

At September 30, 2023, the Bank had borrowing capacity with the Federal Reserve Bank of San Francisco (the “Federal Reserve”) of $1.38 billion, including the secured borrowing capacity through the FRB Discount Window, Borrower-in-Custody (“BIC”), and Bank Term Funding (“BTFP”) programs. Borrowings under the BIC program are overnight advances with interest chargeable at the primary credit borrowing rate. Borrowings under the BTFP, which was established in March 2023, are for periods up to one year in length, with interest rates based on the one-year overnight index swap (“OIS”) rate plus a spread of 10 basis points. BTFP borrowings are collateralized by eligible investment securities valued at par and provide an additional source of liquidity leveraging high-quality securities.

At September 30, 2023, the Bank pledged certain qualifying loans with an unpaid principal balance of $1.28 billion and securities with a carrying value of $505.8 million as collateral for the FRB credit programs.

Borrowings from the Federal Reserve through the FRB Discount Window and BIC programs were $200.0 million and zero at September 30, 2023 and December 31, 2022. There were no borrowings under the BTFP at September 30, 2023.

The Bank’s investment in capital stock of the Federal Reserve totaled $34.6 million and $34.5 million at September 30, 2023 and December 31, 2022.

Other Borrowings

The Bank maintains available unsecured federal funds lines with six correspondent banks totaling $290.0 million and $210.0 million, with no outstanding borrowings at September 30, 2023 and December 31, 2022.

We mainly utilize FHLB and FRB borrowings and the unsecured federal funds lines as our secondary source of funds. From time to time, the Bank may also utilize alternate sources of funds, including unsecured overnight borrowings through the American Financial Exchange platform ("AFX") and other financial institutions. The availability of such unsecured borrowings fluctuates regularly and are subject to the counterparties discretion. Other borrowings from these alternate sources totaled $185.8 million and zero at September 30, 2023 and December 31, 2022.

In December 2022, the holding company renewed its $50.0 million revolving line of credit with another financial institution. The line of credit matures on December 18, 2023 and is subject to certain operational and financial covenants. There were no borrowings under this line of credit at September 30, 2023 and December 31, 2022, and we were in compliance with all covenants.

The Bank also maintained repurchase agreements and had no outstanding securities sold under these agreements at September 30, 2023 and December 31, 2022. Availabilities and terms on repurchase agreements are subject to the counterparties’ discretion and the pledging of additional investment securities.