Federal Home Loan Bank Borrowings and Other Borrowings	9 Months Ended
Sep. 30, 2024
Federal Home Loan Bank Borrowings and Other Borrowings	7. Federal Home Loan Bank Borrowings and Other Borrowings The Bank has a line of credit, renewable annually each September, with the Federal Home Loan Bank (“FHLB’) under which there were $86.4 million of borrowings at September 30, 2024 and $58.0 million at December 31, 2023. Interest on any outstanding balance on the line of credit accrues at the federal funds rate plus 0.15% (5.04% at September 30, 2024). The Company had no letters of credit issued through the FHLB at September 30, 2024 compared to $20.0 million letters of credit December 31, 2023 to secure municipal deposits. The Company did not have any term advances from FHLB at September 30, 2024 or December 31, 2023. Although no loans are specifically pledged, the FHLB requires the Bank to maintain eligible collateral (qualifying loans and investment securities) that has a lending value at least equal to its required collateral. At September 30, 2024 and December 31, 2023, there were blanket pledges of loans and securities to the FHLB totaling $391.2 million and $328.7 million, respectively. At September 30, 2024 and December 31, 2023, the Bank’s total borrowing capacity with the FHLB was approximately $272.2 million and $232.3 million, respectively. At September 30, 2024 and December 31, 2023, the Bank’s available borrowing capacity was $184.5 million and $153.1 million, respectively. The difference between the Bank’s total borrowing capacity and available borrowing capacity is related to the amount of borrowings outstanding and letters of credit. The available borrowing capacity with the FHLB is collateral based, and the Bank’s ability to borrow is subject to maintaining collateral that meets the eligibility requirements. The borrowing capacity is not committed and is subject to FHLB credit requirements and policies. In addition, the Bank must maintain a restricted investment in FHLB stock to maintain access to borrowings. At September 30, 2024, the Bank had no borrowings through the Federal Reserve discount window, while its borrowing capacity with the Federal Reserve was $54.0 million. The Company has a $5.0 million line of credit from an unrelated financial institution maturing on November 1, 2025, with an interest rate that adjusts daily based on the prime rate less 0.50%. This line of credit has covenants specific to capital and other financial ratios, which the Company was in compliance with at September 30, 2024 and December 31, 2023. As of September 30, 2024 and December 31, 2023, the Company did not have an outstanding balance on the line of credit. On September 29, 2022, the Company borrowed $10.0 million from the same unrelated financial institution at a fixed rate of 6.15%. This borrowing has covenants specific to capital and other financial ratios, which the Company was in compliance with at September 30, 2024 and December 31, 2023. This borrowing matures on September 1, 2027 and requires quarterly principal and interest payments. Early principal payments are allowed and the balance was $5.7 million and $6.6 million at September 30, 2024 and December 31, 2023, respectively.

Federal Home Loan Bank Borrowings and Other Borrowings

9 Months Ended

Sep. 30, 2024

Federal Home Loan Bank Borrowings and Other Borrowings

7. Federal Home Loan Bank Borrowings and Other Borrowings

The Bank has a line of credit, renewable annually each September, with the Federal Home Loan Bank (“FHLB’) under which there were $86.4 million of borrowings at September 30, 2024 and $58.0 million at December 31, 2023. Interest on any outstanding balance on the line of credit accrues at the federal funds rate plus 0.15% (5.04% at September 30, 2024). The Company had no letters of credit issued through the FHLB at September 30, 2024 compared to $20.0 million letters of credit December 31, 2023 to secure municipal deposits. The Company did not have any term advances from FHLB at September 30, 2024 or December 31, 2023.

Although no loans are specifically pledged, the FHLB requires the Bank to maintain eligible collateral (qualifying loans and investment securities) that has a lending value at least equal to its required collateral. At September 30, 2024 and December 31, 2023, there were blanket pledges of loans and securities to the FHLB totaling $391.2 million and $328.7 million, respectively. At September 30, 2024 and December 31, 2023, the Bank’s total borrowing capacity with the FHLB was approximately $272.2 million and $232.3 million, respectively. At September 30, 2024 and December 31, 2023, the Bank’s available borrowing capacity was $184.5 million and $153.1 million, respectively. The difference between the Bank’s total borrowing capacity and available borrowing capacity is related to the amount of borrowings outstanding and letters of credit. The available borrowing capacity with the FHLB is collateral based, and the Bank’s ability to borrow is subject to maintaining collateral that meets the eligibility requirements. The borrowing capacity is not committed and is subject to FHLB credit requirements and policies. In addition, the Bank must maintain a restricted investment in FHLB stock to maintain access to borrowings.

At September 30, 2024, the Bank had no borrowings through the Federal Reserve discount window, while its borrowing capacity with the Federal Reserve was $54.0 million.

The Company has a $5.0 million line of credit from an unrelated financial institution maturing on November 1, 2025, with an interest rate that adjusts daily based on the prime rate less 0.50%. This line of credit has covenants specific to capital and other financial ratios, which the Company was in compliance with at September 30, 2024 and December 31, 2023. As of September 30, 2024 and December 31, 2023, the Company did not have an outstanding balance on the line of credit.

On September 29, 2022, the Company borrowed $10.0 million from the same unrelated financial institution at a fixed rate of 6.15%. This borrowing has covenants specific to capital and other financial ratios, which the Company was in compliance with at September 30, 2024 and December 31, 2023. This borrowing matures on September 1, 2027 and requires quarterly principal and interest payments. Early principal payments are allowed and the balance was $5.7 million and $6.6 million at September 30, 2024 and December 31, 2023, respectively.