The Bank has a line of credit from the FHLB secured by the Bank’s real estate loans and certain pledged securities. The FHLB will lend up to 30% of the Bank’s total assets as of the prior quarter end, subject to certain eligibility requirements, including adequate collateral. The available line of credit totaled $177.1 million at December 31, 2020. The Bank had borrowings from the FHLB that totaled $115.0 million and $124.8 million at December 31, 2020 and 2019, respectively. The interest rate on the borrowings ranged from 0.22% to 0.25% depending on structure and maturity. The borrowings also required the Bank to own $5.8 million of FHLB stock, at December 31, 2020, which is included in restricted investments on the consolidated balance sheets.

(Dollars in thousands)		Maturities
2021		$	115,000

At December 31, 2020, 1-4 family residential loans held for investment with a lendable value of $49.9 million, multi-family residential loans with a lendable value of $10.0 million, commercial real estate loans with a lendable value of $65.7 million, 1-4 family residential loans held for sale with a lendable value of $23.2 million and securities with a lendable value of $28.3 million were pledged against the available line of credit with the FHLB. The Bank also has a letter of credit with the FHLB in the amount of $20.0 million for the purpose of collateral for public deposits with the Treasury Board of the Commonwealth of Virginia.

In the second quarter of 2020, the Company began participating in the PPPLF, which allows banks to pledge PPP loans as collateral in exchange for advances. The PPPLF advances are at 100% of the PPP loan value and term, have a fixed annual cost of 35 basis points, and receive favorable regulatory capital treatment. As of December 31, 2020, these FRB borrowings were comprised of 23 PPPLF advances, totaling $281.6 million with maturities ranging from 1.2 years to 4.5 years.

The Company has unsecured lines of credit with correspondent banks totaling $38.0 million at December 31, 2020 and $24.0 million at December 31, 2019, available for overnight borrowing. These lines bear interest at the prevailing rates for such loans and are cancellable any time by the correspondent bank. At December 31, 2020 and 2019, none of these lines of credit with correspondent banks were drawn upon.

On May 28, 2020, the Company entered into a Subordinated Note Purchase Agreement with an institutional investor under which the Company issued a subordinated note with a principal amount of $15,000,000 (the “2020 Note”). The 2020 Note has a maturity date of June 1, 2030. The 2020 Note bears interest, payable on the 1^st of June and December of each year, commencing December 1, 2020, at a fixed rate of 6.00% per year for the first five years, and thereafter will bear a floating interest rate of SOFR (as defined in the note) plus 587 basis points. The 2020 Note is not convertible into common stock or preferred stock and is not callable by the holder. The Company has the right to redeem the 2020 Note, in whole or in part, without premium or penalty, at any interest payment date on or after June 1, 2025 and prior to the maturity date, but in all cases in a principal amount with integral multiples of $1,000, plus interest accrued and unpaid through the date of redemption. If an event of default occurs, such as the bankruptcy of the Company, the holder of the 2020 Note may declare the principal amount of the 2020 Note to be due and immediately payable. The 2020 Note is an unsecured, subordinated obligation of the Company, ranks junior in right of payment to the Company’s existing and future senior indebtedness, and ranks pari passu with the 2015 Notes (discussed below). The 2020 Note qualifies as Tier 2 capital for regulatory reporting; though, Tier 2 capital treatment is reduced by 20% in each year subsequent to the first date of the redemption right. The aggregate carrying value of the 2020 Note, including capitalized, unamortized debt issuance costs, was $14.7 million at December 31, 2020. For the year ended December 31, 2020, the effective interest rate on the 2020 Note was 6.17%.

On November 20, 2015, the Company entered into a Subordinated Note Purchase Agreement with 14 institutional accredited investors under which the Company issued an aggregate of $10,000,000 of subordinated notes (the “2015 Notes”) to institutional accredited investors. The 2015 Notes have a maturity date of December 1, 2025. The 2015 Notes bear interest, payable on the 1st of June and December of each year, commencing June 1, 2016, at a fixed rate of 6.75% per year for the first five years, and thereafter will bear a floating interest rate of LIBOR plus 512.8 basis points. The 2015 Notes are not convertible into common stock or preferred stock and are not callable by the holders. The Company has the right to redeem the 2015 Notes, in whole or in part, without premium or penalty, at any interest payment date on or after December 1, 2020 and prior to the maturity date, but in all cases in a principal amount with integral multiples of $1,000, plus interest accrued and unpaid through the date of redemption. If an event of default occurs, such as the bankruptcy of the Company, the holder of a 2015 Note may declare the principal amount of the note to be due and immediately payable. The 2015 Notes are unsecured, subordinated obligations of the Company, rank junior in right of payment to the Company’s existing and future senior indebtedness, and rank pari passu with the 2020 Note. The 2015 Notes qualify as Tier 2 capital for regulatory reporting; though, Tier 2 capital treatment is reduced by 20% in each year subsequent to the first date of the redemption right. The aggregate carrying value of the 2015 Notes, including capitalized, unamortized debt issuance costs, was $9.8 million at both December 31, 2020 and 2019. For the twelve months ending December 31, 2020, the effective interest rate on the 2015 Notes was 6.86%. For the year ended December 31, 2019, the effective interest rate on the 2015 Notes was 6.89%.