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FHLB Advances, Other Borrowings and Subordinated Notes and Debentures
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
FHLB Advances, Other Borrowings and Subordinated Notes and Debentures

Note 9 — FHLB Advances, Other Borrowings and Subordinated Notes and Debentures

The composition of borrowed funds is shown below. Average balances represent year-to-date averages.

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

Balance

 

 

Weighted
Average
Balance

 

 

Weighted
Average
Rate

 

 

Balance

 

 

Weighted
Average
Balance

 

 

Weighted
Average
Rate

 

 

 

(Dollars in Thousands)

 

Federal funds purchased

 

$

—

 

 

$

2

 

 

 

6.31

%

 

$

—

 

 

$

3

 

 

 

5.37

%

FHLB advances

 

 

294,450

 

 

 

286,454

 

 

 

2.68

 

 

 

281,500

 

 

 

351,990

 

 

 

2.52

 

Line of credit

 

 

—

 

 

 

1,642

 

 

 

7.76

 

 

 

—

 

 

 

38

 

 

 

7.26

 

Other borrowings

 

 

—

 

 

 

10

 

 

 

—

 

 

 

20

 

 

 

600

 

 

 

8.33

 

Subordinated notes and debentures

 

 

54,659

 

 

 

48,208

 

 

 

6.37

 

 

 

49,396

 

 

 

38,250

 

 

 

5.16

 

 

 

$

349,109

 

 

$

336,316

 

 

 

3.23

 

 

$

330,916

 

 

$

390,881

 

 

 

2.79

 

 

A summary of annual maturities of borrowings at September 30, 2024 is as follows:

(In Thousands)

 

 

 

Maturities during the year ended December 31,

 

 

 

2024

 

$

116,000

 

2025

 

 

48,000

 

2026

 

 

65,000

 

2027

 

 

10,000

 

2028

 

 

10,450

 

Thereafter

 

 

99,659

 

 

 

$

349,109

 

 

As of September 30, 2024, the Corporation has no other borrowings. As of December 31, 2023, the Corporation had other borrowings of $20,000, which consisted of sold tax credit investments accounted for as secured borrowings because they did not qualify for true sale accounting. The Corporation has entered into derivative contracts hedging a portion of the borrowings included in the 2024 maturities above. As of September 30, 2024, the notional amount of derivatives designated as cash flow hedges totaled $68.4 million with a weighted average remaining maturity of 2.55 years and a weighted average rate of 1.98%.

As of September 30, 2024 and December 31, 2023, the Corporation was in compliance with its debt covenants under its third-party secured senior line of credit. On February 20, 2024, the credit line was renewed for one additional year with pricing terms of 1-month term SOFR + 2.36% and a maturity date of February 19, 2025.

The Corporation issued new subordinated notes payable as of September 13, 2024. The aggregate principal amount of the newly issued subordinated notes payable was $20.0 million which qualified as Tier 2 capital. The subordinated notes payable bear a fixed interest rate of 7.5% with a maturity date of September 13, 2034. The Corporation may, at its option, redeem the notes payable, in whole or part, at anytime after the fifth anniversary of the issuance. As of August 15, 2024, the $15.0 million subordinated notes payable that bore a fixed interest rate of 5.5% were redeemed, and the remaining unamortized debt issuance cost was accelerated due to the early redemption. As of September 30, 2024, $341,000 of debt issuance costs remain in the subordinated note and debentures payable balance, of which $56,000 is related to the recently issued subordinated debentures.