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Note 10 - Borrowed Funds

12 Months Ended

Dec. 31, 2023

(10) BORROWED FUNDS

At December 31, 2023, the Company had $21.5 million in borrowings outstanding under the FRB’s BTFP and no outstanding advances from the FHLB. The Company had no outstanding borrowings at December 31, 2022. The Company had no borrowings outstanding during the years ended December 31, 2022 or 2021.

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. In addition, on December 14, 2023 the Company repaid all outstanding borrowings under the BTFP and advances from the FHLB and then borrowed $21.5 million under the BTFP at a fixed rate of 4.89% for a one-year period. At December 31, 2023, the pledged securities had a par value of $48.9 million and a carrying value of $45.9 million.

During the year ended December 31, 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 and BTFP borrowings during the year ended December 31, 2023:

(Dollars in thousands)
FHLB variable-rate advances
Maximum balance at any month end	$	10,000
Average balance		1,279
Period end balance		-

Weighted average interest rate (annualized):
At end of period		0.00	%
During the period		5.79	%

FHLB fixed-rate bullet advances
Maximum balance at any month end	$	22,500
Average balance		4,804
Period end balance		-

Weighted average interest rate (annualized):
At end of period		0.00	%
During the period		5.54	%

BTFP borrowings:
Maximum balance at any month end	$	21,500
Average balance		8,632
Period end balance		21,500

Weighted average interest rate (annualized):
At end of period		4.89	%
During the period		5.05	%

FHLB advances are secured under a blanket collateral agreement. At December 31, 2023, the carrying value of U.S. Treasury notes and mortgage loans pledged as security for FHLB advances was $35.0 million and $43.1 million, respectively.