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BORROWED FUNDS
 9 Months Ended
Sep. 30, 2025
BORROWED FUNDS  
BORROWED FUNDS

NOTE 5. BORROWED FUNDS

Borrowed funds and the weighted-average contractual interest rate on borrowings at September 30, 2025 and December 31, 2024 are summarized as follows:

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September 30, 2025

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December 31, 2024

(Dollars in thousands)

    

Rate

    

Amount

    

Rate

    

Amount

Advances from Federal Home Loan Bank of Dallas

 

2.05

%  

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$

15,000

 

0.93

%  

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$

10,000

Debt modification discount on FHLB Advances

 

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(307)

 

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(442)

Total borrowings

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$

14,693

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$

9,558

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In December of 2020, the Bank restructured $10.0 million of its long-term borrowings from the FHLB. The debt was restructured to longer maturities at current interest rates. A fee for the restructuring of $1.2 million was treated as a discount on the debt. The deferred fee is amortized into interest expense using the interest method over the life of the restructured borrowings.

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Interest payments are due monthly for FHLB advances. A schedule of maturities for borrowings outstanding at September 30, 2025 are as follows:

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(Dollars in thousands)

    

Amount

Amounts maturing in:

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2025

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$

8,000

2026

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-

2027

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3,000

2028

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4,000

2029

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-

Total

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$

15,000

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At September 30, 2025 and December 31, 2024, the Company had $50.9 million and $45.7 million, respectively, in available borrowing capacity with the Federal Home Loan Bank (“FHLB”). Borrowings from the FHLB are secured though a blanket floating lien on real estate loans. Refer to Note 4 for more detail on loans pledged to the FHLB. The Company has a $20.0 million custodial letter of credit outstanding from the FHLB as of September 30, 2025, which is included in the calculation of our available capacity with the FHLB. The Company can allocate portions of this letter of credit to collateralize certain deposit balances in excess of the FDIC’s insurance limit as an alternative to pledging investment securities for the same purpose. At September 30, 2025, the Company used $20.0 million of the FHLB custodial letter of credit to collateralize public fund deposits.

Other available funding includes an Unsecured Federal Funds Master Purchase Agreement with First National Bankers Bank for $17.8 million. At September 30, 2025 and December 31, 2024, this credit facility was unused.