Borrowings

12 Months Ended

Dec. 31, 2023

Borrowings

Note 6 – Borrowings

The bank converted from the FHLB Dallas to the FHLB of San Francisco effective October 2, 2023, and established a borrowing line on the same date with the FHLB San Francisco. As of December 31, 2023, the Bank had no outstanding FHLB advances. As of December 31, 2023, borrowing capacity totaled $146.0 million and collateral consists of a banket lien on the loan portfolio. As of December 31, 2022, the Bank had one outstanding advance at the FHLB of Dallas totaling $5.0 million carrying an interest rate of 1.40% with a maturity date in 2023. As of December 31, 2022, loans and securities with a carrying value of $264.1 million were pledged to secure advances at the FHLB of Dallas, with remaining availability of $198.1 million at year end.

On March 12, 2023, the Federal Reserve Board announced it would make additional funding available to eligible depository institutions to help ensure banks could meet the needs of depositors made available through the creation of a new Bank Term Funding Program (“BTFP”). The BTFP is a liquidity resource with capacity based on the pledging of high-quality securities. The intention of the program was to eliminate an institution’s need to quickly sell those securities in times of stress. As of December 31, 2023, the Company pledged investments of $30.3 million in securities under the BTFP and has one borrowing of $29.0 million at a rate of 4.83% with a maturity date of December 27, 2024. Additionally, the bank has $15.4 million in availability at the Federal Reserve Bank of San Francisco’s Discount Window.

As of December 31, 2023, and 2022, the bank had unsecured Federal Funds lines of credit at correspondent banks totaling $39.8 million, respectively. The terms of the borrowings are overnight at the applicable fed funds borrowing rate. 

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 $405,000 at December 31, 2023.

The following are maturities of outstanding borrowings as of December 31, 2023 (dollars in thousands):

Maturity
One year or less	$	29,000
Over one through three years		0
Over three through five years		0
Over five through ten years		25,000
Totals	$	54,000