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Note 7 - Borrowed Funds

6 Months Ended

Jun. 30, 2023

7. Borrowed Funds

At June 30, 2023, the Company had $13.0 million in borrowings outstanding from the Federal Reserve. The Company had no outstanding borrowings at December 31, 2022. The Company had no borrowings during the three and six month periods ended June 30, 2022.

During the three-month period ended June 30, 2023, the Company utilized a series of short-term fixed-rate bullet and variable rate advances from the FHLB in order to meet daily liquidity requirements and to fund growth in earning assets. The fixed-rate bullet advances had an average term of seven days. The following table sets forth information on the short-term FHLB advances during the periods presented:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2023			2022		2023			2022
	(Dollars in thousands)
Variable-rate advances
Maximum balance at any month end	$	-		$	-	$	-		$	-
Average balance		357			-		179			-
Period end balance		-			-		-			-

Weighted average interest rate (annualized):
At end of period		-			-		-			-
During the period		5.37	%		-		5.37	%		-

Fixed-rate bullet advances
Maximum balance at any month end	$	15,000		$	-	$	15,000		$	-
Average balance		4,192			-		2,096			-
Period end balance		-			-		-			-

Weighted average interest rate (annualized):
At end of period		-			-		-			-
During the period		5.11	%		-		5.11	%		-

FHLB advances are secured under a blanket collateral agreement. At June 30, 2023, the carrying value of U.S. Treasury notes and mortgage loans pledged as security for FHLB advances was $47.0 million and $35.2 million, respectively.

On March 12, 2023, the Federal Reserve created the BTFP to make additional funding available to eligible depository institutions. The BTFP offers loans of up to one year in length to banks, savings associations, credit unions and other depository institutions which pledge collateral, such as U.S. Treasuries, U.S. agency notes and bonds and U.S. agency mortgage-backed securities. The collateral is valued at par, and advances under this program do not include any fees or prepayment penalties. With the introduction of the BTFP, the Company pledged as collateral U.S. agency notes and bonds and borrowed $13.0 million from the BTFP at a fixed rate of 4.99% for a one-year period on May 19, 2023. Upon receipt of this funding from the BTFP, the Company repaid all outstanding advances from the FHLB. At June 30, 2023, the pledged securities had a par value of $50.9 million and a carrying value of $46.8 million.