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Note 10 - Borrowings
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

10.

Borrowings

 

On April 25, 2024, the Company entered into a promissory note and line of credit agreement with an unaffiliated bank, providing for a two-year five million dollar line of credit facility.  The Company has secured its obligations under the Credit Agreement by pledging to the Lender all outstanding shares of common stock of its subsidiary bank, Reliance State Bank. The Company had no outstanding borrowings on the line of credit as of September 30, 2024. The Company did not comply with one covenant requiring the modified Texas Ratio not exceed 20% at the end of each calendar quarter. The modified Texas Ratio is defined as substandard, substandard-impaired loans and other real estate owned, divided by the sum of Tier 1 capital plus the Allowance for Credit Losses – Loans. The modified Texas Ratio was 20.73% as of September 30, 2024. The lender waived the noncompliance as of September 30, 2024.

 

The Federal Reserve Board created the Bank Term Funding Program (BTFP) in 2023, offering loans of up to one year in length to banks pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.  The BTFP allows for borrowing from the Federal Reserve Bank up to the par value of the pledged collateral.  As of September 30, 2024, the Company had $7.6 million borrowed under the BTFP with a weighted average interest rate of 4.76%.  As of December 31, 2023, the Company had $83.1 million borrowed under the BTFP with a weighted average interest rate of 4.41%.

 

FHLB advances are collateralized by FHLB stock, certain 1-4 family residential real estate loans, multifamily real estate loans, commercial real estate loans and agricultural real estate loans. The Banks had available borrowing capacity with the FHLB of Des Moines, Iowa of $201.0 million and $280.9 million at  September 30, 2024 and December 31, 2023, respectively.  As of September 30, 2024, the Company had $72.5 million of FHLB advances with a weighted average interest rate of 5.06%. As of December 31, 2023, the Company had $24 million of FHLB advances with a weighted average interest rate of 5.51%.

 

On August 15, 2023, the Company borrowed $400 thousand on a credit agreement with a commercial bank. Principal and interest is payable quarterly over 15 years and the agreement matures in June 2038. The interest rate is fixed at 6.5% for five years and variable beginning September 15, 2028. The outstanding balance was $376 thousand and $388 thousand as of September 30, 2024 and December 31, 2023, respectively. The note is secured by property in Ames, Iowa.

 

On June 6, 2022, the Company borrowed $4.0 million on a credit agreement with a commercial bank. The borrowings were used for general corporate purposes. Interest under the note is payable quarterly over four years. Required quarterly principal payments of $150 thousand began in September 2022, with the remaining balance due June 2026. The interest rate is fixed at 3.35% and the outstanding balance was $2.65 million and $3.1 million as of  September 30, 2024 and December 31, 2023, respectively. The note is secured by property in West Des Moines, Iowa.