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Repurchase Agreements

9 Months Ended

Sep. 30, 2022

9. 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 $6.3 million at September 30, 2022 and $7.4 million at December 31, 2021, which were secured by $10.7 million and $9.2 million of the Company’s investment portfolio at the same dates, respectively.

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

Schedule of Repurchase Agreements

	As of September 30, 2022
(dollars in thousands)	Overnight and		Up to 30				Greater
	Continuous		days		30-90 days		than 90 days		Total
Repurchase agreements:
U.S. federal treasury obligations	$	1,806	$	-	$	-	$	-	$	1,806
U.S. federal agency obligations		1,515		-		-		-		1,515
Agency mortgage-backed securities		3,028		-		-		-		3,028
Total	$	6,349	$	-	$	-	$	-	$	6,349

	As of December 31, 2021
(dollars in thousands)	Overnight and		Up to				Greater
	Continuous		30 days		30-90 days		than 90 days		Total
Repurchase agreements:
U.S. federal treasury obligations	$	325	$	-	$	-	$	-	$	325
U.S. federal agency obligations		3,008		-		-		-		3,008
Agency mortgage-backed securities		4,070		-		-		-		4,070
Total	$	7,403	$	-	$	-	$	-	$	7,403

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.