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Short-term Borrowings | 9 Months Ended
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Sep. 30, 2021
Debt Disclosure [Abstract] |
Short-Term Borrowings |
8. | BORROWINGS
Short-Term Borrowings Short-term borrowings consist of federal funds purchased, securities sold under repurchase agreements, and short-term FHLB advances with original maturities of one year or less. Short-term borrowings totaled $10.0 million as of both September 30, 2021 and December 31, 2020.
| • | Federal funds purchased, which represent unsecured lines of credit that generally mature within one to four days, are available to the Bank through arrangements with correspondent banks and the Federal Reserve. As of both September 30, 2021 and December 31, 2020, there were no federal funds purchased outstanding.
| • | Securities sold under repurchase agreements, which are secured borrowings, generally are reflected at the amount of cash received in connection with the transaction. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. The Bank monitors the fair value of the underlying securities on a daily basis. Securities sold under repurchase agreements as of September 30, 2021 and December 31, 2020 totaled $37 thousand and $17 thousand, respectively.
| • | Short-term FHLB advances are secured borrowings available to the Bank as an alternative funding source. As of both September 30, 2021 and December 31, 2020, the Bank had $10.0 million in outstanding FHLB advances with original maturities of less than one year.
Long-Term Borrowings FHLB Advances The Company may use FHLB advances with original maturities of more than one year as an alternative to funding sources with similar maturities, such as certificates of deposit or other deposit programs. These advances generally offer more attractive rates than other mid-term financing options. They are also flexible, allowing the Company to quickly obtain the necessary maturities and rates that best suit its overall asset/liability strategy. FHLB advances with an original maturity of more than one year are classified as long-term. As of both September 30, 2021 and December 31, 2020, the Company did not have any long-term FHLB advances outstanding. Subordinated Debt On October 1, 2021, the Company completed a private placement of $11.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes that will mature on October 1, 2031 (the “Notes”). The Notes will bear interest at a rate of 3.50% per annum for the first five years, then the interest rate will be reset quarterly to a benchmark interest rate per annum which, subject to certain conditions provided in the Notes, will be equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 275 basis points. The Company expects to continue to use the net proceeds for general corporate purposes, which may include the repurchase of the Company’s common stock, and to support organic growth plans, including the maintenance of capital ratios. Following receipt of the net proceeds of the Notes, the Company invested $5 million into capital surplus of the Bank. As of both September 30, 2021 and December 31, 2020, the Company did not have any subordinated notes outstanding. Available Credit As an additional funding source, the Company has available unused lines of credit with correspondent banks, the Federal Reserve and the FHLB. Certain of these funding sources are subject to underlying collateral. As of September 30, 2021 and December 31, 2020, the Company’s available unused lines of credit consisted of the following:
Available Unused Lines of Credit |  | Collateral Requirements |  | September 30, 2021 |  | December 31, 2020
Correspondent banks |  | None |  | $44.8 million |  | $44.8 million
Federal Reserve (discount window) |  | Subject to collateral |  | $1.1 million |  | $1.6 million
FHLB advances (1) |  | Subject to collateral |  | $234.0 million |  | $225.8 million
| (1) | These amounts represent the total remaining credit the Company has from the FHLB, but this credit can only be utilized to the extent that underlying collateral exists. Assets pledged (including loans and investment securities) associated with FHLB advances and letters of credit totaled $62.7 million and $36.1 million as of September 30, 2021 and December 31, 2020, respectively. The Company’s collateral exposure with the FHLB in the form of advances and letters of credit was $40.0 million and $20.0 million as of September 30, 2021 and December 31, 2020, respectively, leaving an excess of collateral of $22.7 million and $16.1 million available to utilize for additional credit as of the respective dates.

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- Definition The entire disclosure for short-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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