(8) Federal Home Loan Bank Advances and Other Borrowings:

Federal Home Loan Bank advances and letters of credit:

The Bank has a master contract agreement with the Federal Home Loan Bank (FHLB) which provides for borrowing up to the maximum of 76% of the book value of the Bank’s 1-4 family real estate loans, 62% of the book value of the Bank’s revolving home equity lines of credit, 62% of the book value of the Bank’s 1-4 family second mortgages, 62% of the book value of the Bank’s secured farmland loans, 73% of the book value of the multi-family loans and the amount of the Bank’s securities pledged, and 72% of the commercial real estate first-lien loans. The total carrying value of the Bank’s assets pledged for FHLB advances was approximately $888,551 and $892,193 at June 30, 2025 and December 31, 2024, respectively. At June 30, 2025, the Bank’s available and unused portion of this borrowing agreement totaled approximately $447,651, based on collateral pledged. The Bank may, however, have to purchase additional FHLB stock to support future draws.

Variable rate advances are due on demand and interest is payable monthly. Various variable rate advances were obtained from the FHLB with total outstanding balances of $0 at June 30, 2025 and December 31, 2024.

Fixed rate advances are due at the maturity date, with a prepayment penalty applying and interest payable monthly. Various fixed rate advances were obtained from the FHLB with a total outstanding balance of $86,917 and various interest rates from 0.00% to 4.46% at June 30, 2025 and a total outstanding balance of $67,917, with various interest rates from 0.00% to 5.08% at December 31, 2024.

TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(000s omitted except share data)

The Bank had four letters of credit totaling $66,045 at June 30, 2025, with maturity dates through May 2026.

Federal Reserve Bank Discount Window:

The Bank maintains an operating line of credit with the Federal Reserve Bank Discount Window that is secured by commercial and agricultural loans. As of June 30, 2025 and December 31, 2024, the balance owed on the line was $0. The Bank was eligible to borrow up to approximately $79,906 and $85,839, based on collateral of approximately $94,447 and $111,238 at June 30, 2025 and December 31, 2024, respectively.

At June 30, 2025, the scheduled maturities of Federal Home Loan Bank advances are as follows:

Schedule of Maturities of Federal Home Loan Bank Advances

Bankers’ Bank Borrowings:

During October 2023, Tri-County Financial Group entered into an operating line of credit with Bankers’ Bank for $10,000 at a variable interest rate based upon the Wall Street Journal Prime Rate (8.50% prime interest rate at June 30, 2024). The note is secured by 52,200 shares of the common stock of First State Bank, representing 100% of the issued and outstanding capital stock of the Bank. The line of credit matured on October 29, 2024 and was renewed with a maturity date of October 29, 2026 at a variable interest rate based upon the Wall Street Journal Prime Rate, less 0.250 percentage points (7.50% prime interest rate at June 30, 2025). The note is secured by the same terms and the balance owed on the line was $0 at June 30, 2025. There were no draws on the operating line of credit at any point during the period ended June 30, 2025 and year ended December 31, 2024.