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Note 10 - Borrowings
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 10. Borrowings

 

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 $245.3 million and $280.9 million at December 31, 2024 and 2023, respectively. The Company had short-term FHLB advances of $27 million as of December 31, 2024. The Company also had an FHLB advance of $15 million with a maturity date of August 2026 and $1.5 million with a maturity date of October 2029 as of December 31, 2024. The weighted average contractual rate on FHLB advances was 4.42% as of December 31, 2024. The Company had $24 million of short-term FHLB advances with a weighted average interest rate of 5.51% as of December 31, 2023.

 

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 December 31, 2024, the Company had no borrowings under the BTFP. As of December 31, 2023, the Company had $83.1 million borrowed under the BTFP with a weighted average interest rate of 4.41%.

 

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 $1 million of outstanding borrowings on the line of credit as of  December 31, 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 22.7% as of December 31, 2024. The lender waived the noncompliance as of December 31, 2024.

 

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. This note was paid in full in December 2024 and there is no outstanding balance remaining as of December 31, 2024. The outstanding balance was $388 thousand as of December 31, 2023.

 

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 $2.5 million and $3.1 million as of December 31, 2024 and 2023, respectively. The note is secured by property in West Des Moines, Iowa.

 

Future required principal payments for long-term debt as of December 31, 2024 are shown in the table below (in thousands).

 

2025

  600 

2026

  17,900 

2027

  - 

2028

  - 

2029

  1,452 

Thereafter

  - 
  $19,952