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Borrowing Arrangements

12 Months Ended

Dec. 31, 2024

Banking and Thrift, Other Disclosure [Abstract]

Borrowing Arrangements

BORROWING ARRANGEMENTS

Federal Home Loan Bank Advances - As of December 31, 2024, the Company had $90,000,000 in Federal Home Loan Bank (“FHLB”) of San Francisco long-term advances outstanding with a weighted average interest rate of 0.86%. The advances were acquired and recorded at fair value through the merger with Community West Bancshares on April 1, 2024 and mature in two tranches: $45,000,000 matures in April 2025 and $45,000,000 matures in June 2025. As of December 31, 2024, the remaining discount on the acquired FHLB advances was $1,558,000. In addition, the Company had a short-term advance of $45,000,000 outstanding as of December 31, 2024 with an interest rate of 4.52% and maturity in August 2025. At December 31, 2023, the Company had an overnight borrowing advance with the FHLB for $35,000,000 with an interest rate of 5.70%.

Approximately $1.1 billion in loans were pledged under a blanket lien as collateral to the FHLB for the Company’s remaining borrowing capacity of $576.6 million as of December 31, 2024. FHLB advances are also secured by investment securities with amortized costs totaling $153.1 million and fair values totaling $193.4 million at December 31, 2024.  The Company’s credit limit varies according to the amount and composition of the investment and loan portfolios pledged as collateral.

Lines of Credit - The Company had unsecured lines of credit with its correspondent banks which, in the aggregate, amounted to $110 million and $110 million at December 31, 2024 and 2023, respectively, at interest rates which vary with market conditions. As of December 31, 2024 and 2023, the Company had no advances with correspondent banks.

Federal Reserve Bank (FRB) Line of Credit and Bank Term Funding Program - The Company has a line of credit in the amount of $3,669,000 and $4,448,000 with the Federal Reserve Bank of San Francisco (FRB) at December 31, 2024 and 2023, respectively, which bears interest at the prevailing discount rate collateralized by investment securities with amortized costs totaling $4,406,000 and $4,894,000 and market values totaling $3,828,000 and $4,374,000, respectively. 

The Company participated in the Bank Term Funding Program (BTFP) which offered loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging any collateral eligible for purchase by the Federal Reserve Banks in open market operations such as U.S. Treasuries, U.S. agency securities, and U.S. agency mortgage-backed securities. These assets were valued at par. The BTFP was an additional source of liquidity against high-quality securities during the liquidity crisis of 2023.

The Bank had no borrowings with the FRB as of December 31, 2024. At December 31, 2023, the Company had $45,000,000 outstanding as a short-term loan with the FRB under the BTFP at an interest rate of 4.81%. The Bank fully repaid the short-term borrowing in August 2024 and replaced it with a short-term FHLB advance of $45,000,000, as noted above.

The following table reflects the Company’s credit lines, balances outstanding, and pledged collateral at December 31, 2024 and December 31, 2023:

Credit Lines (In thousands)						December 31, 2024						December 31, 2023
Unsecured Credit Lines
Credit limit						$	110,000					$	110,000
Balance outstanding						$	—					$	—
Federal Home Loan Bank
Credit limit						$	738,556					$	342,483
Balance outstanding, net of discount						$	133,442					$	35,000
Collateral pledged						$	1,236,732					$	612,702
Fair value of collateral						$	1,083,041					$	500,972
Federal Reserve Bank Term Funding Program (1)
Credit limit						$	—					$	46,174
Balance outstanding						$	—					$	45,000
Collateral pledged						$	—					$	53,650
Fair value of collateral						$	—					$	47,603
Federal Reserve Bank
Credit limit						$	3,669					$	4,448
Balance outstanding						$	—					$	—
Collateral pledged						$	4,406					$	4,894
Fair value of collateral						$	3,828					$	4,374

(1) Bank Term Funding Program loan was repaid in the third quarter of 2024 and replaced with an FHLB short-term advance that matures in August 2025.

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- References

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- Definition

The entire disclosure for borrowing from the Federal Home Loan Bank, including: (i) general description; (ii) title and nature of obligation; (iii) interest rate; (iv) payment terms; (v) maturity dates by year; (vi) collateral requirements; (vii) restrictive covenants; (viii) priority; (ix) conversion or redemption features; (x) carrying value of assets pledged as collateral; (xi) combined aggregate maturities for next five years; (xii) unused or available balances.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(13)(3)(a))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478546/942-210-S99-1

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 470
-Name Accounting Standards Codification
-Section 45
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478878/942-470-45-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477734/942-470-50-3

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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-SubTopic 10
-Topic 470
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-1

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