Borrowings, Line of Credit and Subordinated Debt |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||
| Borrowings, Line of Credit and Subordinated Debt. | |||||||||||||||||||||||||||||||||||||||||||
| Borrowings, Line of Credit and Subordinated Debt | Note 6. Borrowings, Line of Credit and Subordinated Debt Borrowings: At March 31, 2026, total borrowings were $3.2 million compared to $3.0 million at December 31, 2025. Borrowings consist of the following (in thousands):
Securities Sold Under Agreements to Repurchase: Securities sold under repurchase agreements, which are secured borrowings, generally mature within to four days from the transaction date. Securities sold under repurchase agreements are reflected at the amount of cash received in connection with the transaction. The Company may be required to provide additional collateral based on the fair value of the underlying securities. The Company monitors the fair value of the underlying securities on a daily basis. The Company had securities sold under agreements to repurchase with commercial checking customers which were secured by government agency securities. The carrying value of investment securities pledged as collateral under repurchase agreements was $3.2 million and $3.0 million at March 31, 2026 and December 31, 2025, respectively. The average balance of repurchase agreements during the three-month period ended March 31, 2026, and 2025 was $3.5 million and $4.2 million, respectively. The maximum month-end outstanding balance for the three-month period ended March 31, 2026, and 2025 was $3.8 million and $4.5 million, respectively. Other Borrowings: The Company has a revolving line of credit for an aggregate amount of $35 million. The maturity of the line of credit is May 1, 2027. At March 31, 2026 and December 31, 2025, $0 was outstanding under the line of credit. Subordinated Debt: On August 20, 2025, the Company issued $100 million of 7.25% fixed-to-floating rate subordinated notes (the "2025 Notes"), which were outstanding as of March 31, 2026 and December 31, 2025. The 2025 Notes have a stated maturity of September 1, 2035, are redeemable by the Company (i) in whole or in part, on or after September 1, 2030, and (ii) in full, at any time upon the occurrence of certain events. The 2025 Notes will bear interest at a fixed rate of 7.25% per year, from and including August 20, 2025, to, but excluding September 1, 2030, or earlier redemption date. From and including September 1, 2030, to, but excluding the maturity date or early redemption date, the interest rate will reset quarterly at a variable rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 385 basis points. As provided in the 2025 Notes, the interest rate during the applicable floating rate period may be determined based on a rate other than three-month term SOFR. The debt issuance costs for the 2025 Notes totaled $1.4 million and will be amortized through September 1, 2030. Unamortized debt issuance cost was $1.3 million at March 31, 2026. Amortization expense totaled $72 thousand for the three months ended March 31, 2026. On September 28, 2018, the Company issued $40 million of 5.625% fixed-to-floating rate subordinated notes (the "Notes"), which were not outstanding as of December 31, 2025. The Notes’ were retired on October 2, 2025. The Notes’ unamortized debt issuance costs totaled $295 thousand at March 31, 2025, and was written-off as of September 30, 2025. Amortization expense totaled $21 thousand for the three months ended March 31, 2025. |
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