Other Borrowings and Subordinated Debt

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Other Borrowings and Subordinated Debt

7. OTHER BORROWINGS AND SUBORDINATED DEBT

The Company’s other Borrowings consisted of:

(in Thousands)	June 30, 2021		December 31, 2020
Long-term FHLB advances	$	20,000	$	20,000
Subordinated Debt		19,973		19,970
Federal Reserve PPPLF		3,087		17,315
Total Long-term borrowings	$	43,060	$	57,285

All borrowings from the FHLB are secured by a blanket lien on qualified collateral, defined principally as investment securities and mortgage loans, which are owned by the Company, free and clear of any liens or encumbrances.

Contractual maturities and scheduled cash flows of Federal Home Loan Bank long-term advances, in thousands, consist of the following at
June 30, 2021:

Type	Amount		Rate			Due in
Mid Term Repo Fixed Rate	$	5,000		0.91	%		2023
Fixed Rate		5,000		0.97	%		2024
Fixed Rate		5,000		1.10	%		2025
Fixed Rate		3,000		1.01	%		2025
Fixed Rate		2,000		1.02	%		2025
	$	20,000		1.00	%

In April 2020, the Federal Reserve initiated the Paycheck Protection Program Liquidity Facility (“PPPLF”) , which is designed to facilitate lending by financial institutions to small businesses under the PPP provision of the CARES Act. Only PPP loans are eligible to serve as collateral for the PPPLF, with each dollar of PPP loans providing one dollar of advance availability. The maturity date of an extension of credit under the PPPLF will equal the maturity date of the pool of PPP loans pledged to secure the extension of credit. Any principal payments received by the financial institution on the PPP loans, such as PPP loan forgiveness payments from the Small Business Administration or principal payments from the borrower after the initial six -month deferment period, must be used to pay down the PPPLF advance by the same dollar amount, maintaining the dollar-for-dollar advance amount and PPP aggregate loan balance relationship. The interest rate on PPPLF advances is fixed at 0.35%. As of June 30, 2021, the Company’s advances under the PPPLF totaled $3,084.

On September 30, 2020, the Company accepted subscriptions for and sold, at 100% of their principal amount, an aggregate of $20,000 of subordinated notes (the “Notes”), on a private placement basis, to accredited investors. The investors included companies owned and controlled by a director of the Company, which purchased $19,000 in principal amount of the Notes. The Notes bear interest at a fixed interest rate of 5.0% per year for five years and then float at an index tied to the Secured Overnight Finance Rate (“SOFR”). The Notes have a term of ten years and have a maturity date of October 1, 2030. The Notes are redeemable at the option of the Company, in whole or in part, subject to any required regulatory approvals after five years. The Company contributed $15,000 of the proceeds from the Notes to the Bank as equity capital to support the Bank’s continued growth, including ongoing lending activities.