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BORROWED FUNDS
 9 Months Ended
Sep. 30, 2025
BORROWED FUNDS  
BORROWED FUNDS

NOTE 5.               BORROWED FUNDS

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Borrowed funds at September 30, 2025 and December 31, 2024 are summarized, as follows:

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September 30, 2025

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December 31, 2024

 

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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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​

​

  

 

Advances from the FHLB

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$

50,000

 

4.03

%  

​

$

242,650

 

4.49

%

Other borrowings

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7,615

 

0.19

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​

 

7,062

 

0.19

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Total short-term borrowings

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57,615

 

3.63

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249,712

 

4.35

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Long-term borrowings

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​

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Advances from the FHLB

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82,341

 

3.09

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269

 

4.50

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Subordinated borrowings

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52,229

 

10.50

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40,620

 

6.60

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Total long-term borrowings

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134,570

 

5.82

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40,889

 

6.59

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Total

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$

192,185

 

5.17

%  

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$

290,601

 

4.75

%

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Short-term debt includes 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 September 30, 2025 and December 31, 2024. 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 Borrower in Custody program, and the Discount Window at the Reserve Bank. At September 30, 2025, our available secured line of credit at the Reserve Bank was $98.0 million versus $105.6 million at December 31, 2024. We have pledged certain loans and securities to the Reserve Bank to support this arrangement.

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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 $40.0 million as of September 30, 2025 and December 31, 2024. There was no outstanding balance on the line of credit as of September 30, 2025 and December 31, 2024.

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Long-term FHLB advances consist of advances with a remaining maturity of more than one year. The advances outstanding at September 30, 2025 include callable advances of $80.3 million and amortizing advances of $1.0 million. There were no callable advances outstanding and $269 thousand of amortizing advances at December 31, 2024. All FHLB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally 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 September 30, 2025 is, as follows:

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Weighted Average

 

(in thousands, except rates)

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Amount

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 Rate

 

2025

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$

—

 

—

%

2026

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50,000

 

4.03

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2027

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56,171

 

3.18

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2028

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25,150

 

2.90

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2029

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—

 

—

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Thereafter

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1,020

 

2.54

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Total FHLB advances

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$

132,341

 

3.44

%

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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 26, 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 Board of Governors of the Federal Reserve System (“Federal Reserve”). During the fourth quarter of 2024 we paid down $20.0 million of the outstanding subordinated notes. As of September 30, 2025 we have an outstanding subordinated note balance of $20.0 million.

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.

In connection with the acquisition, the Company assumed $13.0 million in fixed-to-floating rate subordinated notes, that had a fair value of $11.2 million (the “2031 Notes”) issued by Guaranty Bancorp. The 2031 Notes were originally issued on March 23, 2021 with a maturity date of April 1, 2031. The 2031 Notes bear a fixed-to-floating interest rate of 4.875% through April 1, 2026, payable quarterly in arrears. Beginning April 1, 2026 and thereafter, the interest rate shall be reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 4.82%. We have the option beginning with the interest payment date of April 1, 2026, and on any scheduled payment date thereafter, to redeem the 2031 Notes, in whole or in part upon prior approval of the Federal Reserve.

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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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September 30, 2025

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December 31, 2024

Customer Repurchase Agreements

 

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US Government-sponsored enterprises

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$

7,615

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$

7,062

Total

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$

7,615

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$

7,062

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