BORROWINGS |
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| BORROWINGS | NOTE 5. BORROWINGS Borrowings and the weighted-average contractual interest rate at June 30, 2026 and December 31, 2025 are summarized as follows:
In December of 2020, the Bank restructured $10.0 million of its long-term borrowings from the Federal Home Loan Bank (“FHLB”) of Dallas. The debt was restructured to longer maturities at current interest rates and accounted for as modification or exchange of debt. A fee for the restructuring of $1.2 million was deferred and amortized as an adjustment to interest expense using the interest method over the life of the restructured borrowings. Interest payments are due monthly for FHLB advances. A schedule of maturities for borrowings outstanding at June 30, 2026 are as follows:
At June 30, 2026 and December 31, 2025, the Company had $53.9 million and $49.7 million, respectively, in available borrowing capacity with the FHLB. Borrowings from the FHLB are secured though a blanket floating lien on real estate loans. Refer to Note 4 for more detail on loans pledged to the FHLB. The Company has a $20.0 million custodial letter of credit outstanding from the FHLB as of June 30, 2026, which is included in the calculation of our available capacity with the FHLB. The Company can allocate portions of this letter of credit to collateralize certain deposit balances in excess of the FDIC’s insurance limit as an alternative to pledging investment securities for the same purpose. At June 30, 2026, the Company used $5.0 million of the FHLB custodial letter of credit to collateralize public fund deposits. Other available funding includes an Unsecured Federal Funds Master Purchase Agreement with First National Bankers Bank for $17.8 million. At June 30, 2026 and December 31, 2025, this credit facility was unused. |
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