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BORROWED FUNDS
 3 Months Ended
Mar. 31, 2024
BORROWED FUNDS  
BORROWED FUNDS

NOTE 4.               BORROWED FUNDS

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Borrowed funds at March 31, 2024 and December 31, 2023 are summarized, as follows:

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March 31, 2024

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December 31, 2023

 

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Weighted

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Weighted

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(dollars in thousands)

    

Carrying Value

    

Average Rate

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Carrying Value

    

Average Rate

 

Short-term borrowings

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​

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​

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​

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Advances from the FHLB

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$

196,000

 

5.44

%  

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$

232,300

 

5.46

%

Advances from the FRB BTFP

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​

65,000

​

4.79

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​

​

30,000

​

4.90

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Other borrowings

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8,161

 

0.14

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​

 

8,465

 

0.13

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Total short-term borrowings

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269,161

 

3.00

​

​

 

270,765

 

2.88

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Long-term borrowings

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​

​

 

  

 

  

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Advances from the FHLB

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276

 

4.42

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​

 

279

 

4.39

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Subordinated borrowings

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60,501

 

6.24

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​

 

60,461

 

6.22

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Total long-term borrowings

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60,777

 

6.23

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​

 

60,740

 

6.21

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Total

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$

329,938

 

3.34

%  

​

$

331,505

 

3.24

%

​

Short-term debt includes Federal Home Loan Bank of Boston (“FHLB”) advances with a remaining maturity of less than one year. We also maintain a $1.0 million secured line of credit with the FHLB that bears a daily adjustable rate calculated by the FHLB. There was no outstanding balance on the FHLB line of credit for the periods ended March 31, 2024 and December 31, 2023. There are no variable rate short-term FHLB borrowings.

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We have the capacity to borrow funds on a secured basis utilizing the Bank Term Funding Program (the “BTFP”), the Borrower in Custody program, and the Discount Window at the Federal Reserve Bank of Boston (the “FRB”). At March 31, 2024, our available secured line of credit at the FRB was $155.9 million versus $156.6 million at December 31, 2023. We have pledged certain loans and securities to the FRB to support this arrangement. The BTFP enables depository institutions to pledge eligible investment securities to the Federal Reserve with borrowing capacity based upon the par value of the collateral.

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As of March 31, 2024, we maintained a BTFP balance of $65 million at a fixed rate of 4.76% with a maturity date of January 16, 2025. During the first quarter 2024, we prepaid our existing advance of $30 million at a rate of 4.85%, and entered into a new advance for $65 million at a rate of 4.76%. The BTFP was an additional source of liquidity with

favorable prepayment terms, as we may prepay at any time without penalty. As announced by the Federal Reserve Board on January 24, 2024, the BTFP has ceased making new loans effective March 11, 2024.

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We maintain an unused unsecured federal funds line of credit with a correspondent bank that has an aggregate overnight borrowing capacity of $50.0 million as of March 31, 2024 and December 31, 2023. There was no outstanding balance on the line of credit as of March 31, 2024 and December 31, 2023.

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Long-term FHLB advances consist of advances with a remaining maturity of more than one year. The advances outstanding at March 31, 2024 include no callable advances and amortizing advances of $276 thousand. There were no callable advances outstanding and $279 thousand of amortizing advances at December 31, 2023. All FHLB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities. There are no variable rate long-term FHLB borrowings.

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A summary of maturities of FHLB advances as of March 31, 2024 is, as follows:

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Weighted Average

 

(in thousands, except rates)

​

Amount

​

 Rate

 

2024

​

$

196,000

 

5.44

%

Thereafter

​

 

276

 

4.42

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Total FHLB advances

​

$

196,276

 

5.44

%

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We executed a Subordinated Note Purchase Agreement with an aggregate of $40.0 million of subordinated notes (the “Notes”) to accredited investors on November 19, 2019. The Notes have a maturity date of December 1, 2029 and bear a fixed interest rate of 4.63% through December 1, 2024 payable semi-annually in arrears. From December 1, 2024 and thereafter the interest rate shall be reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 3.27%. We have the option beginning with the interest payment date of December 1, 2024, and on any scheduled payment date thereafter, to redeem the Notes, in whole or in part upon prior approval of the Federal Reserve. The transaction included debt issuance costs of $119 thousand as of March 31, 2024 and $158 thousand net of amortization as of December 31, 2023, which are netted against the subordinated debt.

We also have $20.6 million in floating Junior Subordinated Deferrable Interest Debentures (“Debentures”) issued by NHTB Capital Trust II (“Trust II”) and NHTB Capital Trust III (“Trust III”), which are both Connecticut statutory trusts. The Debentures issued on March 30, 2004 carry a variable interest rate of three-month SOFR plus 2.79%, and mature in 2034. The debt is callable by the Company at the time when any interest payment is made. Trust II and Trust III are considered variable interest entities for which we are not the primary beneficiary. Accordingly, Trust II and Trust III are not consolidated into our financial statements.

Repurchase Agreements

We can raise additional liquidity by entering into repurchase agreements at our discretion. In a security repurchase agreement transaction, we will generally sell a security, agreeing to repurchase either the same or substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded as interest expense on the consolidated statements of income. The securities underlying the agreements are delivered to counterparties as security for the repurchase obligations. Since the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as sales, and are therefore considered secured borrowing transactions for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement, we are subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, we either deal with established firms when entering into these transactions or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by our safekeeping agents.

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(in thousands)

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March 31, 2024

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December 31, 2023

Customer Repurchase Agreements

 

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US Government-sponsored enterprises

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$

8,161

​

$

8,465

Total

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$

8,161

​

$

8,465

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