Federal Home Loan Bank Borrowings and Other Borrowings	3 Months Ended
Mar. 31, 2025
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 $44.9 million of borrowings at March 31, 2025 and $48.8 million of borrowings at December 31, 2024. Interest on any outstanding balance on the line of credit accrues at the federal funds rate plus 0.15% (4.54% at March 31, 2025). The Company had $40.0 million in letters of credit issued through the FHLB at March 31, 2025 compared to $60.0 million in letters of credit December 31, 2024 to secure municipal deposits. The Company did not have any term advances from FHLB at March 31, 2025 or December 31, 2024. 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 March 31, 2025 and December 31, 2024, there were blanket pledges of loans and securities to the FHLB totaling $419.2 million and $403.9 million, respectively. At March 31, 2025 and December 31, 2024, the Bank’s total borrowing capacity with the FHLB was approximately $289.4 million and $281.2 million, respectively. At March 31, 2025 and December 31, 2024, the Bank’s available borrowing capacity was $203.2 million and $171.0 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 March 31, 2025, the Bank had no borrowings through the Federal Reserve discount window, while its borrowing capacity with the Federal Reserve was $46.9 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 March 31, 2025. At December 31, 2024, the Company’s risk-based capital ratio of 12.43% was below the minimum required under such covenants of 12.50%. The Company requested from the lender a waiver of the default which was granted by the lender. On March 14, 2025, the Company and the lender entered into a Change in Terms Agreement, reducing the minimum tier 1 capital ratio required under such covenants to 12.00% going forward. As of March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024. This borrowing matures on September 1, 2027 and requires quarterly principal and interest payments. Early principal payments are allowed and the balance was $3.9 million and $4.2 million at March 31, 2025 and December 31, 2024, respectively.

Federal Home Loan Bank Borrowings and Other Borrowings

3 Months Ended

Mar. 31, 2025

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 $44.9 million of borrowings at March 31, 2025 and $48.8 million of borrowings at December 31, 2024. Interest on any outstanding balance on the line of credit accrues at the federal funds rate plus 0.15% (4.54% at March 31, 2025). The Company had $40.0 million in letters of credit issued through the FHLB at March 31, 2025 compared to $60.0 million in letters of credit December 31, 2024 to secure municipal deposits. The Company did not have any term advances from FHLB at March 31, 2025 or December 31, 2024.

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 March 31, 2025 and December 31, 2024, there were blanket pledges of loans and securities to the FHLB totaling $419.2 million and $403.9 million, respectively. At March 31, 2025 and December 31, 2024, the Bank’s total borrowing capacity with the FHLB was approximately $289.4 million and $281.2 million, respectively. At March 31, 2025 and December 31, 2024, the Bank’s available borrowing capacity was $203.2 million and $171.0 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 March 31, 2025, the Bank had no borrowings through the Federal Reserve discount window, while its borrowing capacity with the Federal Reserve was $46.9 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 March 31, 2025. At December 31, 2024, the Company’s risk-based capital ratio of 12.43% was below the minimum required under such covenants of 12.50%. The Company requested from the lender a waiver of the default which was granted by the lender. On March 14, 2025, the Company and the lender entered into a Change in Terms Agreement, reducing the minimum tier 1 capital ratio required under such covenants to 12.00% going forward. As of March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024. This borrowing matures on September 1, 2027 and requires quarterly principal and interest payments. Early principal payments are allowed and the balance was $3.9 million and $4.2 million at March 31, 2025 and December 31, 2024, respectively.