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Note 7 - Borrowed Funds

3 Months Ended

Mar. 31, 2025

7.	Borrowed Funds

At March 31, 2025 and December 31, 2024, the Company had no outstanding borrowings.

On March 12, 2023, the FRB created the BTFP to make additional funding available to eligible depository institutions. The BTFP offered loans of up to one year in length to banks, savings associations, credit unions and other depository institutions which pledged 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 did not include any fees or prepayment penalties. In January 2024, the Company repaid all outstanding borrowings under the BTFP and advances from the FHLB and then borrowed $33.6 million under the BTFP at a fixed rate of 4.85% for a one-year period. Effective March 11, 2024, the BTFP ceased making new loans. All BTFP advances were repaid in October and November 2024.

The Company also has access to the FRB Discount Window for Borrowings. The Company has pledged certain U.S Treasuries and U.S. agency notes and bonds with a carrying value of $16.7 million to secure borrowings through the Discount Window, if needed. While the Company has conducted a test of borrowing through the Discount Window, there were no borrowings outstanding through the Discount Window at March 31, 2025 or December 31, 2024.

FHLB advances are secured under a blanket collateral agreement. At March 31, 2025, the carrying value of U.S. Treasury notes and mortgage loans pledged as security for future FHLB advances was $5.0 million and $54.7 million, respectively. At March 31, 2025, the Company had a $31.7 million borrowing capacity limit with the FHLB based on pledged collateral.

On February 28, 2024, the Bank entered into an Overdraft Line of Credit Agreement with the FHLB which established a line of credit not to exceed $10.0 million secured under the blanket collateral agreement. This agreement expired on February 28, 2025 and automatically renewed for an additional one-year term. At March 31, 2025 and December 31, 2024, there no borrowings under the agreement.

During the three month period ended March 31, 2025, the Company did not utilize any FHLB advances. During the three month period ended March 31, 2024, 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 three month period ended March 31, 2024:

	Three Months Ended
	March 31,
(Dollars in thousands)	2024
FHLB variable-rate advances
Maximum balance at any month end	$	-
Average balance		1,192
Period end balance		-

Weighted average interest rate (annualized):
At end of period		0.00	%
During the period		5.78	%

FHLB fixed-rate bullet advances
Maximum balance at any month end	$	13,000
Average balance		2,220
Period end balance		-

Weighted average interest rate (annualized):
At end of period		0.00	%
During the period		5.63	%

BTFP borrowings:
Maximum balance at any month end	$	33,625
Average balance		31,908
Period end balance		33,625

Weighted average interest rate (annualized):
At end of period		4.85	%
During the period		4.81	%