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FHLB Advances, Other Borrowings and Subordinated Notes and Debentures
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
FHLB Advances, Other Borrowings and Subordinated Notes and Debentures Note 10 — FHLB Advances, Other Borrowings and Subordinated Notes and Debentures

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

 

 

 

December 31, 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

 

 

 

38.40

%

 

$

—

 

 

$

3

 

 

 

5.37

%

FHLB advances

 

 

265,350

 

 

 

282,437

 

 

 

2.73

 

 

 

281,500

 

 

 

351,990

 

 

 

2.52

 

Line of credit

 

 

—

 

 

 

1,229

 

 

 

8.03

 

 

 

—

 

 

 

38

 

 

 

7.26

 

Other borrowings

 

 

10

 

 

 

8

 

 

 

—

 

 

 

20

 

 

 

600

 

 

 

8.33

 

Subordinated notes and debentures

 

 

54,689

 

 

 

49,833

 

 

 

6.36

 

 

 

49,396

 

 

 

38,250

 

 

 

5.16

 

 

 

$

320,049

 

 

$

333,509

 

 

 

3.30

 

 

$

330,916

 

 

$

390,881

 

 

 

2.79

 

 

 

A summary of annual maturities of borrowings at December 31, 2024 is as follows:

 

(In Thousands)

 

 

 

Maturities during the year ended December 31,

 

 

 

2025

 

$

116,410

 

2026

 

 

65,000

 

2027

 

 

10,000

 

2028

 

 

10,450

 

2029

 

 

35,000

 

Thereafter

 

 

83,189

 

 

 

$

320,049

 

 

The Corporation has a $709.8 million FHLB line of credit available for advances which is collateralized as noted below. At December 31, 2024, $444.4 million of this line remained unused. There were $265.4 million of term FHLB advances outstanding at December 31, 2024 with stated fixed interest rates ranging from 1.19% to 4.95% compared to $281.5 million of term FHLB advances outstanding at December 31, 2023 with stated fixed interest rates ranging from 0.50% to 5.58%. The term FHLB advances outstanding at December 31, 2024 are due at various dates through December 2031.

The Corporation is required to maintain as collateral mortgage-related securities, unencumbered first mortgage loans and secured small business loans in its portfolio aggregating at least the amount of outstanding advances from the FHLB. Loans totaling approximately $1.298 billion and $1.172 billion were pledged as collateral at December 31, 2024 and 2023, respectively.

The Corporation has a senior line of credit with a third-party financial institution of $10.5 million. As of December 31, 2024, the line of credit carried an interest rate of SOFR + 2.36% that matured on February 19, 2025 and had certain performance debt covenants of which the Corporation was in compliance. The Corporation pays a commitment fee on this senior line of credit. For the years ended December 31, 2024, 2023, and 2022 the Corporation incurred $13,000 additional interest expense due to this fee. There was no outstanding balance on the line of credit as of December 31, 2024. On February 20, 2025, 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, 2026.

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 December 31, 2024, $311,000 of debt issuance costs remain in the subordinated note and debentures payable balance, of which $53,000 is related to the recently issued subordinated debentures.

The Corporation has entered into derivative contracts hedging a portion of the borrowings included in the 2024 maturities above. As of December 31, 2024, the notional amount of derivatives designated as cash flow hedges totaled $68.4 million with a weighted average remaining maturity of 2.30 years and a weighted average rate of 1.98%.