​

NOTE 6 — SHORT-TERM BORROWINGS

Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, Federal Discount Window, and FHLB advances, which generally represent overnight or less than 30 -day borrowings.

Short-term borrowings and weighted-average interest rates at and for the years ended December 31, 2025 and 2024 are as follows:

​

​

At December 31, 2025, the maximum borrowing capacity of the federal funds purchased and Federal Discount Window was $15,000,000 and $7,119,000, respectively.

Please refer to Note 7 ― Long-Term Borrowings for the Corporation’s maximum borrowing capacity at FHLB along with information regarding the blanket agreement with the FHLB which also applies to the short-term FHLB advances.

There are no restrictive debt covenants established in relation to borrowings on the Federal Discount Window, as certain securities are pledged as collateral by the Corporation to secure this borrowing capacity. The Corporation is evaluated on an annual basis by the ACBB regarding its ability to borrow federal funds via its unsecured borrowing facility; ACBB reserves the right to discontinue the federal funds borrowing facility without notice.

Securities Sold Under Agreements to Repurchase (“Repurchase Agreements”)

The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Corporation may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Corporation to repurchase the assets.

As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability on the Corporation’s consolidated balance sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is not offsetting or netting

of the investment securities assets with the repurchase agreement liabilities. In addition, as the Corporation does not enter into reverse repurchase agreements, there is no such offsetting to be done with the repurchase agreements.

The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Corporation be in default (e.g., fails to make an interest payment to the counterparty). The collateral is held by a correspondent bank in the counterparty’s custodial account. The counterparty has the right to sell or repledge the investment securities.

The following table presents the repurchase agreements subject to enforceable master netting arrangements as of December 31, 2025 and 2024.

​

The following table presents the remaining contractual maturity of the master netting arrangement or repurchase agreements as of December 31, 2025.

​

​