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Borrowings
 12 Months Ended
Dec. 31, 2023
Advance from Federal Home Loan Bank [Abstract]  
Borrowings

NOTE 8. Borrowings

The Company has borrowings in the form of federal funds purchased, Federal Home Loan Bank of Atlanta ("FHLB") advances and subordinated notes.

The following table presents selected information on short-term borrowings for the years ended December 31, 2023 and 2022, consisting of FHLB advances and federal funds purchased.

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(dollars in thousands)

 

Balance at year-end

 

$

20,000

 

 

$

207,980

 

Average balance during the year

 

$

45,801

 

 

$

47,470

 

Average interest rate during the year

 

 

4.68

%

 

 

3.09

%

Maximum month-end balance during the year

 

$

150,000

 

 

$

207,980

 

 

At December 31, 2023 and 2022, the Company's short-term FHLB advances totaled $20.0 million and $175.0 million, respectively, and federal funds purchased totaled $0 and $33.0 million, respectively.

The Company's long-term borrowings with the FHLB were $145.0 million and $0 at December 31, 2023 and 2022, respectively.

Federal fund lines of credit are extended to the Bank by nonaffiliated banks with which a correspondent banking relationship exists. The line of credit amount is determined by the creditworthiness of the Bank and, in particular, its regulatory capital ratios, which are discussed in Note 15. Federal funds purchased generally mature each business day. At December 31, 2023 these available lines totaled $78.0 million.

The Company had $115.6 million in irrevocable letters of credit at December 31, 2023 with the FHLB to secure public deposits.

As of December 31, 2023, Company had remaining credit availability in the amount of $169.6 million with the FHLB. This line may be utilized for short and/or long-term borrowing. Advances on the line are secured by all of the Company’s eligible first lien residential real estate loans on one-to-four-unit, single-family dwellings; multi-family dwellings; home equity lines of credit; and commercial real estate loans. The amount of the available credit is limited to a percentage of the estimated market value of the loans as determined periodically by the FHLB. The amount of the available credit is also limited to 20% of total Bank assets.

On March 31, 2022, the Company entered into Subordinated Note Purchase Agreements with certain purchasers pursuant to which the Company issued and sold $30.0 million in aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due April 1, 2032 (the "Notes"). The net proceeds of the Notes were used for general corporate purposes, organic growth and to support the Bank's regulatory capital ratios.

The Notes were structured to qualify as Tier 2 capital for regulatory capital purposes at the holding company and bear an initial interest rate of 4.50% until April 1, 2027, with interest during this period payable semi-annually in arrears. From and including April 1, 2027, but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to three-month SOFR, plus 2.35% with interest during the period payable quarterly in arrears. The Notes are redeemable by the Company at its option, in whole or in part, on or after April 1, 2027. Initial debt issuance costs were $673 thousand. The debt balance of $30.0 million is presented net of unamortized issuance costs of $556 thousand and $623 thousand at December 31, 2023 and 2022, respectively.