Federal Home Loan Bank of Des Moines Advances |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advances from Federal Home Loan Banks [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank of Des Moines Advances | Federal Home Loan Bank of Des Moines Advances Through February 19, 2021, the Company’s wholly owned subsidiary TH Insurance was a member of the FHLB. As a member of the FHLB, TH Insurance had access to a variety of products and services offered by the FHLB, including secured advances. However, the Company did not have any outstanding secured advances or credit capacity available as of December 31, 2020. As of December 31, 2019, TH Insurance had $210.0 million in outstanding secured advances with a weighted average borrowing rate of 2.00%.
The ability to borrow from the FHLB was subject to the Company’s continued creditworthiness, pledging of sufficient eligible collateral to secure advances, and compliance with certain agreements with the FHLB. Each advance required approval by the FHLB and was secured by collateral in accordance with the FHLB’s credit and collateral guidelines, as may be revised from time to time by the FHLB. Eligible collateral may include Agency RMBS and certain non-Agency securities with a rating of A and above.
On January 11, 2016, the Federal Housing Finance Agency, or FHFA, released a final rule regarding membership in the Federal Home Loan Bank system. Among other effects, the final rule excludes captive insurers from membership eligibility, including the Company’s subsidiary member, TH Insurance. Since TH Insurance was admitted as a member in 2013, it was eligible for a membership grace period that ran through February 19, 2021, during which new advances or renewals that matured beyond the grace period were prohibited; however, any existing advances that matured beyond this grace period were permitted to remain in place subject to their terms insofar as the Company maintained good standing with the FHLB. Any new advances or renewals occurring during this time were limited to 40% of TH Insurance’s total assets.
At December 31, 2020 and December 31, 2019, FHLB advances had the following remaining maturities:
At December 31, 2019, the Company pledged AFS securities with a carrying value of $226.5 million as collateral for advances from the FHLB. In addition, as a condition to membership in the FHLB, the Company was required to purchase and hold a certain amount of FHLB stock, which was based, in part, upon the outstanding principal balance of advances from the FHLB. At December 31, 2020 and December 31, 2019, the Company had stock in the FHLB totaling $10.0 million and $12.5 million, respectively, which was included in other assets on the consolidated balance sheets. FHLB stock is considered a non-marketable, long-term investment, is carried at cost and is subject to recoverability testing under applicable accounting standards. This stock can only be redeemed or sold at its par value, and only to the FHLB. Accordingly, when evaluating FHLB stock for impairment, the Company considered the ultimate recoverability of the par value rather than recognizing temporary declines in value. As of December 31, 2020 and December 31, 2019, the Company had not recognized an impairment charge related to its FHLB stock.
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