XML 19 R13.htm IDEA: XBRL DOCUMENT v3.25.1
Borrowings
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Borrowings

Note 4 – Borrowings

FHLB Borrowings

The Bank has a borrowing facility from the FHLB secured by pledged qualifying commercial and residential mortgage loans and securities. At March 31, 2025 and December 31, 2024, the secured facility totaled $588.5 million and $696.0 million, respectively, based on pledged collateral. 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 Bank had borrowings from the FHLB totaling $150.0 million at both March 31, 2025 and December 31, 2024. The FHLB borrowings required the Bank to hold $9.1 million and $9.4 million of FHLB stock at March 31, 2025 and December 31, 2024, respectively, which is included in restricted equity investments on the consolidated balance sheets.

At both March 31, 2025 and December 31, 2024, the Bank also had letters of credit outstanding with the FHLB in the amount of $51.2 million, of which $50.0 million was for the purpose of collateral for public deposits with the Treasury Board of the Commonwealth of Virginia as of the same dates. Outstanding letters of credit reduce the available balance of the borrowing facility with the FHLB. Available balances on the FHLB credit facility were $387.3 million and $494.9 million as of March 31, 2025 and December 31, 2024, respectively. The decline in the secured facility and the availability of the FHLB credit facility in the first quarter of 2025 primarily reflects the release of securities held as collateral.

The following table presents information regarding FHLB advances outstanding as of both March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

Balance

 

 

Origination Date

 

Stated Interest Rate

 

 

Maturity Date

Fixed rate credit

 

$

50,000

 

 

3/15/2023

 

 

4.07

%

 

3/15/2027

Fixed rate credit

 

 

50,000

 

 

5/2/2023

 

 

3.87

%

 

5/3/2027

Fixed rate credit

 

 

50,000

 

 

5/4/2023

 

 

3.52

%

 

5/4/2028

Total FHLB borrowings

 

$

150,000

 

 

 

 

 

 

 

 

At March 31, 2025, 1-4 family residential loans, multi-family residential loans, and commercial real estate loans classified as held for investment with a lendable value of $422.8 million and securities with a lendable value of $165.7 million were pledged for the borrowing facility with the FHLB.

FRB Borrowings

The Company may obtain advances from the FRB through its Discount Window. Advances through the FRB Discount Window are secured by qualifying pledged construction and commercial and industrial loans, which had a lendable value of $68.5 million as of March 31, 2025. The Company had secured borrowing capacity through the FRB Discount Window of $68.5 million and $105.7 million as of March 31, 2025 and December 31, 2024, respectively, of which the Company had no outstanding advances as of either date.

Other Borrowings

The Company had an unsecured line of credit with a correspondent bank available for overnight borrowing, which totaled $10.0 million as of both March 31, 2025 and December 31, 2024. This line bears interest at the prevailing rates for such loans and is cancelable any time by the correspondent bank. As of both March 31, 2025 and December 31, 2024, the Company had no outstanding advances on this secured line.

Subordinated Notes

The Company had $39.8 million of subordinated notes, net, outstanding as of both March 31, 2025 and December 31, 2024. The Company's subordinated notes are comprised of a $25 million issuance in October 2019 maturing October 15, 2029 (the “2029 Notes”) and a $15 million issuance in May 2020 maturing June 1, 2030 (the “2030 Note”).

The 2029 Notes bore interest at 5.625% per annum, through October 14, 2024, payable semi-annually in arrears. From October 15, 2024 through October 15, 2029, or up to an early redemption date, the interest rate resets quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Funding Rate ("SOFR") plus 433.5 basis points, payable quarterly in arrears. As of March 31, 2025, the 2029 Notes bore an annual interest rate of 8.64%. As of March 31, 2025, the net carrying amount of the 2029 Notes was $25.0 million, inclusive of a $453 thousand purchase accounting adjustment (premium). For the three months ended March 31, 2025 and 2024, the effective interest rate on the 2029 Notes was 8.05% and 5.22%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium).

The 2030 Note bears interest at the rate of 6.00% per annum until June 1, 2025, at which date the rate will reset quarterly, equal to the three-month SOFR determined on the date of the applicable interest period plus 587 basis points. Interest on the 2030 Note is payable semi-annually in arrears. As of March 31, 2025, the 2030 Note bore an annual interest rate of 6.00%. As of March 31, 2025, the net carrying amount of the 2030 Note, including capitalized, unamortized debt issuance costs, was $14.8 million. For the three months ended March 31, 2025 and 2024, the effective interest rate on the 2030 Note was 6.31% and 6.32%, respectively.