Borrowings

9 Months Ended

Sep. 30, 2023

Borrowings

Note 6 – Borrowings

As of September 30, 2023, the Bank had a borrowing line with the FHLB of Dallas. Effective October 2, 2023, the Bank converted from the FHLB of Dallas to the FHLB of San Francisco. As of September 30, 2023, the Bank had one outstanding advance totaling $18.0 million carrying an interest rate of 5.63% with the FHLB of Dallas. As of September 30, 2023, loans with a carrying value of $389.0 million were pledged to the FHLB San Francisco to prepare for the conversion and $19.8 million of securities were pledged to the FHLB of Dallas to secure the single remaining borrowing. Upon conversion to the FHLB of San Francisco, the Bank had a remaining borrowing availability of $127.3 million based on the FHLB of San Francisco’s borrowing limit being capped at 25% of the Bank’s total assets. At December 31, 2022, FHLB borrowings totaled $5.0 million carrying interest rates of 1.40%. As of December 31, 2022, loans and securities with a carrying value of $264.1 million were pledged to secure FHLB advances, with remaining availability of $198.1 million at year end.

On June 29, 2021, the Company completed a private placement of $25.0 million of 10 year, fixed-to-floating rate subordinated notes. The subordinated notes will initially bear interest at 4.00% per annum for five years, floating at Three-Month SOFR plus 328 basis points quarterly thereafter. The ten-year notes mature on July 15, 2031, and are callable at the Company’s option after five years. The subordinated notes have unamortized origination fees of $419,000 at September 30, 2023.

The following are maturities of outstanding borrowings as of September 30, 2023, (dollars in thousands):

Maturity
One year or less	$	18,000
Over one through three years		—
Over three through five years		—
Over five through ten years		25,000
Totals	$	43,000