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Borrowings
 12 Months Ended
Dec. 31, 2024
Advance from Federal Home Loan Bank [Abstract]  
Borrowings

NOTE 8. Borrowings

The Company has access to 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, 2024 and 2023, which consisted of FHLB advances.

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(dollars in thousands)

 

Balance at year-end

 

$

25,000

 

 

$

20,000

 

Average balance during the year

 

$

6,418

 

 

$

45,801

 

Average interest rate during the year

 

 

4.65

%

 

 

4.68

%

Maximum month-end balance during the year

 

$

25,000

 

 

$

150,000

 

 

At December 31, 2024 and 2023, the Company's short-term FHLB advances totaled $25.0 million and $20.0 million, respectively.

The Company's long-term borrowings with the FHLB were $95.0 million and $145.0 million at December 31, 2024 and 2023, 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, 2024 these available lines totaled $78.0 million.

At December 31, 2024, the Company had collateral valued at $98.7 million pledged at the Federal Reserve Bank of Richmond ("FRB") discount window, of which 75%, or $74.0 million is available for short-term liquidity needs. Discount window credit is available for as long as 90 days, prepayable and renewable on a daily basis, priced relative to the Federal Open Market Committee's target range for the federal funds rate.

The Company had $95.9 million in irrevocable letters of credit at December 31, 2024 with the FHLB to secure public deposits.

As of December 31, 2024, Company had remaining credit availability in the amount of $254.3 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 $488 thousand and $556 thousand at December 31, 2024 and 2023, respectively.