The Bank has a borrowing facility from the FHLB secured by certain real estate loans and 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. Total lendable collateral was $452.4 million as of June 30, 2021. The Bank had borrowings from the FHLB that totaled $125.1 million and $115.0 million as of June 30, 2021 and December 31, 2020, respectively. Of these advances, the Company assumed $10.1 million in the Bay Banks Merger. The borrowings also required the Bank to own $6.0 million and $5.8 million of FHLB stock, as of June 30, 2021 and December 31, 2020, respectively, which is included in restricted equity and other investments on the consolidated balance sheets.

The following table presents information regarding FHLB advances outstanding as of the date stated.

	June 30, 2021
				Stated
			Originated	Interest			Maturity
(Dollars in thousands)	Balance		Date	Rate			Date
Convertible	$	10,118	2/28/2020		0.56	%	2/28/2030
Fixed Rate Credit		15,000	4/1/2021		0.17	%	7/1/2021
Fixed Rate Credit		25,000	5/3/2021		0.16	%	8/2/2021
Fixed Rate Credit		35,000	5/7/2021		0.16	%	8/6/2021
Fixed Rate Credit		10,000	5/28/2021		0.16	%	8/30/2021
Fixed Rate Credit		10,000	5/28/2021		0.16	%	8/30/2021
Fixed Rate Credit		20,000	9/17/2021		0.19	%	9/17/2021
Total FHLB borrowings	$	125,118

As of June 30, 2021, 1-4 family residential loans held for investment with a lendable value of $210.6 million, multi-family residential loans with a lendable value of $35.8 million, commercial real estate loans with a lendable value of $123.6 million, 1-4 family residential loans held for sale with a lendable value of $52.1 million, and securities with a lendable value of $30.2 million were pledged against the available line of credit with the FHLB. The Bank also has letters of credit with the FHLB totaling $59.0 million for the purpose of collateral for public deposits with the Treasury Board of the Commonwealth of Virginia. Outstanding letters of credit reduce the available balance of the borrowing facility with the FHLB, which was $268.4 million as of June 30, 2021.

In the second quarter of 2020, the Company began participating in the FRB’s 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 June 30, 2021, these FRB borrowings were $97.4 million with maturities ranging from 0.8 to 4.0 years. Of this balance, $24.8 million were assumed by the Company in the Bay Banks Merger. As of December 31, 2020, the Company’s FRB borrowings were $281.6 million with maturities ranging from 1.2 years to 4.5 years.

The Company has unsecured lines of credit with correspondent banks, which totaled $79.0 million and $38.0 million at June 30, 2021 and December 31, 2020, respectively. These lines bear interest at the prevailing rates for such loans and are cancellable any time by the correspondent bank. As of June 30, 2021 and December 31, 2020, none of these lines of credit with correspondent banks were drawn upon.

The Company had $46.1 million and $24.5 million of subordinated notes, net, outstanding as of June 30, 2021 and December 31, 2020, respectively. The Company assumed $30.9 million par value (or $31.9 million fair value) of subordinated notes in the Bay Banks Merger, which is composed of an issuance in October 2019 and maturing October 15, 2029 (the “2029 Bay Banks Notes”) and an issuance in May 2015 and maturing May 28, 2025 (the “2025 Bay Banks Notes”).

The Bay Banks 2029 Notes bear interest at 5.625% per annum, through October 14, 2024, payable semi-annually in arrears. From October 15, 2024 through October 14, 2029, or up to an early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Funding Rate (“SOFR”) (as defined in the 2029 Bay Banks Notes) plus 433.5 basis points, payable quarterly in arrears. The Bay Banks 2029

Notes are unsecured, subordinated obligations of the Company and rank junior in right of payment to the Company’s existing and future senior indebtedness and rank in parity with the other subordinated notes issued by the Company. Beginning on October 15, 2024 through maturity, the 2029 Bay Banks Notes may be redeemed, at the Company's option, on any scheduled interest payment date. As of June 30, 2021, the net carrying amount of the 2029 Bay Banks Notes was $25.3 million, inclusive of a $830 thousand purchase accounting adjustment (premium) recorded at the effective date of the Bay Banks Merger. For the three and six months ended June 30, 2021, the effective interest rate on the 2029 Bay Banks Notes was 4.72% and 4.73%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium).

The 2025 Bay Banks Notes bear interest, payable on the first of March and September of each year, at a fixed interest rate of 6.50% per year. The Company has the right to redeem the 2025 Bay Banks Notes, in whole or in part, without premium or penalty, at any interest payment date. The 2025 Bay Banks Notes are unsecured, subordinated obligations of the Company and rank junior in right of payment to the Company’s existing and future senior indebtedness and rank in parity with the other subordinated notes issued by the Company. As of June 30, 2021, the net carrying amount of the 2025 Bay Banks Notes was $6.1 million, inclusive of a $30 thousand purchase accounting adjustment (premium). For the three and six months ended June 30, 2021, the effective interest rate on the 2025 Bay Banks Notes was 5.03% and 5.06%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium). Subsequent to June 30, 2021, the Company delivered notices of redemption to the holders of the 2025 Bay Banks Notes. Such notes will be redeemed at the next payment date, September 1, 2021.

On May 28, 2020, the Company issued a subordinated note with a principal amount of $15.0 million which matures on June 1, 2030 (the “2030 Note”). The 2030 Note is an unsecured, subordinated obligation of the Company and ranks junior in right of payment to the Company’s existing and future senior indebtedness and ranks in parity with the other subordinated notes issued by the Company. Beginning on June 1, 2025 through maturity, the 2030 Note may be redeemed, at the Company's option, on any scheduled interest payment date. The aggregate carrying value of the 2030 Note, including capitalized, unamortized debt issuance costs, was $14.4 million as of June 30, 2021. For both the three and six months ended June 30, 2021, the effective interest rate on the 2020 Note was 6.27%.

On November 20, 2015, the Company issued an aggregate of $10.0 million of subordinated notes with a maturity date of December 1, 2025 (the “2025 Notes”). The 2025 Notes could be redeemed in part or in full at any interest payment date on or after December 1, 2020, at the option of the Company. The Company exercised its right to redeem the 2025 Notes in the second quarter of 2021 and repaid the 2025 Notes in full.