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Borrowed Funds and Subordinated Notes
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

Note 8. Borrowed Funds and Subordinated Notes

 

The Company has a blanket lien credit line with the FHLB with borrowing capacity of $52.5 million secured by commercial loans. The Company determines its borrowing needs and utilizes overnight advance accordingly at varying terms. The Company had no borrowings with FHLB as of December 31, 2021 and December 31, 2020.

 

The Company also has a credit line with the FRB with borrowing capacity of $19.1 million, which is secured by commercial loans. The Company had no borrowings from the FRB at December 31, 2021 and December 31, 2020 under this credit line. As part of the CARES Act, the FRB offered secured discounted borrowings to banks who originated PPP loans through the Paycheck Protection Program Liquidity Facility (“PPPLF”). At December 31, 2021, the Bank pledged $34.5 million of PPP loans to the FRB under the PPPLF, and had borrowings of $34.5 million at a rate of 0.35%, with maturities of ranging from January 2026 to May 2026. At December 31, 2020, the Bank pledged $83.7 million of PPP loans to the FRB under the PPPLF, and had borrowings of $83.7 million at a rate of 0.35%, with maturities ranging from April 2022 through June 2022. PPP loans pledged as collateral for the PPPLF are excluded from the average assets used in the Company’s leverage ratio calculation.

 

As of December 31, 2021 and 2020, the Company had subordinated notes totaling $12.0 million, consisting of $8.0 million issued in 2017 bearing an interest rate of 7.125% payable semi-annually and maturing on July 20, 2027, and $4.0 million issued in 2018 bearing interest rate of 7.125% payable semi-annually and maturing on March 31, 2028. The subordinated notes are unsecured and subordinated in right of payment to the payment of our existing and future senior indebtedness and structurally subordinated to all existing and future indebtedness of our subsidiaries.