Note 11 - Borrowings -

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

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1

– Borrowings –

The Bank had outstanding advances from the Federal Home Loan Bank (FHLB) of

$55.0

million and

$75.0

million at

December 31, 2018

and

2017,

respectively, consisting of:

One fixed rate loan of

$30.0

million at

December 31, 2018

and

2017,

with interest at

2.41%

paid monthly. Principal is due at maturity in

November 2022.

One fixed rate loan of

$25.0

million at

December 31, 2018,

with interest at

2.54%

paid monthly. Principal is due at maturity in

June 2019.

One fixed rate loan of

$15.0

million, at

December 31, 2017,

with interest at

1.90%

paid monthly. Principal was due at maturity in

December 2018,

but paid off in

June 2018,

with quarterly call options beginning in

2013.

One fixed rate loan of

$30.0

million at

December 31, 2017,

with interest at

1.53%

paid monthly. Principal was due at maturity in

March 2018.

These advances are collateralized by the Bank’s investment in Federal Home Loan Bank stock and a blanket lien on qualifying loans in the Bank’s loan portfolio consisting of performing

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4

family mortgages and certain small business, small farm and small agriculture loans. The blanket lien totaled approximately

$544.0

million at

December 31, 2018

with unused availability for advances and letters of credit of approximately

$351.6

million.

The Bank has outstanding lines of credit with several of its correspondent banks available to assist in the management of short-term liquidity. These agreements provide for interest based upon the federal funds rate on the outstanding balance. Total available lines of credit as of

December 31, 2018

and

2017

were

$126.0

million and

$113.5

million, respectively. There was

no

balance on these lines at

December 31, 2018

and

2017.

On

September 12, 2016,

the Company borrowed

$3.0

million from First National Bankers Bank (FNBB) with a maturity date of

September 12, 2026.

This advance was paid off in

December 2018.

This advance was due in

nine

annual principal payments of

$300,000

beginning on

September 12, 2017,

and

one

final principal and interest payment of

$303,000

due on

September 12, 2026.

This advance was secured by a pledge of and security interest in the common stock of our wholly-owned subsidiary, Business First Bank. The balance outstanding was

$2.7

million as of

December 31, 2017.

The advance carried a variable interest rate equal to the Wall Street Journal Prime rate. The rate was

4.50%

as of

December 31, 2017,

and adjusted based on changes in the index rate. This FNBB long term advance was established for the purpose of paying off the revolving line of credit with First Tennessee Bank National Association (FTN).

FNBB also allowed the Company to borrow on a revolving basis up to

$5.0

million. This line of credit, established on

September 12, 2016,

was secured by a pledge of and security interest in the common stock of our wholly-owned subsidiary, Business First Bank. This line of credit was paid off in

December 2018.

The balance on this line of credit was

$862,000

at

December 31, 2017.

The line of credit carried a variable interest rate equal to the Wall Street Journal Prime rate. The rate was

4.50%

at

December 31, 2017,

and adjusted based on changes in the index rate. This FNBB line was established for the purpose of repurchasing shares of our common stock from certain of our shareholders and for general corporate purposes.

On

December 17, 2018,

the Company entered into a Subordinated Note Purchase Agreement in the amount of

$25.0

million. This debt agreement bears a fixed-to-floating rate at

6.75%

and interest is due quarterly. The principal amount is due at maturity in

2033.

This debt agreement is secured by a pledge of and security interest in the common stock of our wholly-owned subsidiary, Business First Bank. This debt agreement was established for the purpose of paying off the FNBB note and for general corporate purposes.