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BORROWINGS
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
BORROWINGS BORROWINGS
The Bank has executed a blanket pledge and security agreement with the FHLB which requires certain loans and securities be pledged as collateral for any outstanding borrowings under the agreement. The collateral pledged as of September 30, 2024 and December 31, 2023 amounted to $1.30 billion and $1.31 billion, respectively. Based on this collateral and the Company’s holdings of FHLB stock, the Company was eligible to borrow an additional $612.1 million as of September 30, 2024.
On March 12, 2023 the Federal Reserve Board announced it would make additional funding available to eligible depository institutions to help assure banks have the ability to meet the needs of depositors made available through the creation of a new Bank Term Funding Program (“BTFP”). The BTFP is meant to be an additional resource of liquidity against high-quality securities, eliminating an institutions need to quickly sell those securities in times of stress. On March 27, 2024 the Company repaid $31.0 million of BTFP borrowings. As of September 30, 2024, the Company has pledged a par value of $10.3 million in securities under the BTFP and borrowed $10.0 million with a maturity date of January 10, 2025. The rate for the borrowing is based on the one year overnight swap rate plus 10 basis points and is fixed over the term of the advance based on the date of the advance. Upon maturity, the Company renewed a three-month $50 million FHLB advance on July 1, 2024. The rate for the borrowing is adjusted daily based on the SOFR rate plus 15 basis points. The advance matured on October 1, 2024 and was renewed for an additional three months. Additionally, the Company paid off its FHLB line of credit balance of $128.7 million on July 1, 2024 and did not draw on the line during the remainder of the third quarter.
The following presents the Company’s maturities of FHLB and FRB borrowings (dollars in thousands):
Maturity DateRate %September 30,
2024		December 31,
2023
January 1, 2024(1)
5.55 %$— $41,175 
March 27, 20244.78 — 30,997 
March 29, 20245.60 — 50,000 
October 1, 20244.99 50,000 — 
January 10, 20254.87 10,000 — 
$60,000 $122,172 
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(1)The borrowing has a one day, automatic daily renewal maturity date, subject to FHLB discretion not to renew.
To bolster the effectiveness of the SBA’s PPP, the Federal Reserve is supplying liquidity to participating financial institutions through term financing collateralized by PPP loans to small businesses. The Paycheck Protection Program Liquidity Facility ("PPPLF") extends credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value and bearing interest at 35 bps. The terms of the loans are directly tied to the underlying PPP loans, which were originated at 2 or 5 years. As of September 30, 2024 and December 31, 2023, the Company had outstanding $2.4 million and $3.5 million, respectively, under the PPPLF program which is included in the FHLB and Federal Reserve borrowings line of the Condensed Consolidated Balance Sheets.
The Bank has borrowing capacity associated with two unsecured federal funds lines of credit up to $10.0 million and $19.0 million. As of September 30, 2024 and December 31, 2023, there were no amounts outstanding on any of the federal funds lines.
The following presents the Company’s subordinated notes included in the Subordinated notes line of the Condensed Consolidated Balance Sheets as of the periods noted (dollars in thousands):
Issuance DateStated RateInterest PaidMaturityCarrying ValueInitial Debt Issuance Costs
Remaining Net Balance(1)
March 2020
5.125% per annum until 3/31/2025, then alternative rate plus 450 basis points until maturity
Quarterly3/31/2030$8,000 $120 $7,988 
November 2020
4.25% per annum until 12/1/2025, then SOFR plus 402 basis points until maturity
Semi-annual (Quarterly beginning 12/01/25)12/1/203010,000 162 9,942 
August 2021
3.25% per annum until 9/1/2026, then SOFR plus 258 basis points until maturity
Semi-annual (Quarterly beginning 09/01/26)9/1/203115,000 242 14,894 
December 2022
7.00% per annum until 12/15/2027, then SOFR plus 328 basis points until maturity
Semi-annual (Quarterly beginning 12/15/27)12/15/203220,000 506 19,684 
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(1)Remaining net balance includes amortization of debt issuance costs.
For the three months ended September 30, 2024 and 2023, the Company recorded $0.6 million and $0.7 million, respectively, of interest expense related to the collective subordinated notes. For the nine months ended September 30, 2024 and 2023, the Company recorded $2.0 million and $2.0 million, respectively, of interest expense related to the collective subordinated notes. The subordinated notes are included in Tier 2 capital under current regulatory guidelines and interpretations, subject to limitations.
The Company’s borrowing facilities include various financial and other covenants, including, but not limited to, a requirement that the Bank maintains regulatory capital that is deemed "well capitalized" by federal banking agencies. See Note 16 – Regulatory Capital Matters for additional information. As of September 30, 2024 and December 31, 2023, the Company was in compliance with the covenant requirements.