v3.25.2
BORROWINGS
 6 Months Ended
Jun. 30, 2025
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 June 30, 2025 and December 31, 2024 amounted to $1.34 billion and $1.30 billion, respectively. Based on this collateral and the Company’s holdings of FHLB stock, the Company was eligible to borrow an additional $371 million as of June 30, 2025.
Upon maturity, the Company renewed a three-month $50 million FHLB advance on April 2, 2025. The rate for the borrowing is adjusted daily based on the SOFR rate plus 13.5 basis points. The advance matured on July 2, 2025 and was renewed for an additional three months.
The following presents the Company’s maturities of FHLB borrowings (dollars in thousands):
Maturity DateRate %June 30,
2025		December 31,
2024
July 1, 2025(1)
4.59 %$112,131 $5,000 
July 2, 20254.53 50,000 50,000 
Total$162,131 $55,000 
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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 Paycheck Protection Program (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 June 30, 2025 and December 31, 2024, $1.3 million and $2.0 million, respectively, was outstanding 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 June 30, 2025 and December 31, 2024, 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)
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)12/1/2030$10,000 $162 $9,979 
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 14,936 
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 19,758 
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(1)Remaining net balance includes amortization of debt issuance costs.
During the first quarter of 2025, a subordinated note with a carrying value of $8 million became eligible and was redeemed. For the three months ended June 30, 2025 and 2024, the Company recorded $0.6 million and $0.7 million, respectively, of interest expense related to the collective subordinated notes. For the six months ended June 30, 2025 and 2024, the Company recorded $1.3 million and $1.4 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 June 30, 2025 and December 31, 2024, the Company was in compliance with the covenant requirements.