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Repurchase Agreements

9 Months Ended

Sep. 30, 2020

6. Repurchase Agreements

The Company has overnight repurchase agreements with certain deposit customers whereby the Company uses investment securities as collateral for non-insured funds. These balances are accounted for as collateralized financing and included in other borrowings on the balance sheet.

Repurchase agreements are comprised of non-insured customer funds, totaling $8.4 million at September 30, 2020, and $17.5 million at December 31, 2019, which were secured by $11.1 million and $20.1 million of the Company’s investment portfolio at the same dates, respectively.

The following is a summary of the balances of and collateral for the Company’s repurchase agreements:

Schedule of Repurchase Agreements

As of September 30, 2020

Overnight and Greater

Continuous Up to 30 days 30-90 days than 90 days Total

Repurchase agreements:

U.S. federal agency obligations $ 2,195 $ - $ - $ - $ 2,195

Agency mortgage-backed securities 6,205 - - - 6,205

Total $ 8,400 $ - $ - $ - $ 8,400

As of December 31, 2019

Overnight and Up to Greater

Continuous 30 days 30-90 days than 90 days Total

Repurchase agreements:

U.S. treasury obligations $ 789 $ - $ - $ - $ 789

U.S. federal agency obligations 1,978 - - - 1,978

Agency mortgage-backed securities 14,781 - - - 14,781

Total $ 17,548 $ - $ - $ - $ 17,548

The investment securities are held by a third-party financial institution in the customer’s custodial account. The Company is required to maintain adequate collateral for each repurchase agreement. Changes in the fair value of the investment securities impact the amount of collateral required. If the Company were to default, the investment securities would be used to settle the repurchase agreement with the deposit customer.