Borrowings, Line of Credit and Subordinated Debt

6 Months Ended

Jun. 30, 2021

Borrowings, Line of Credit and Subordinated Debt [Abstract]

Borrowings, Line of Credit and Subordinated Debt

Note 7. Borrowings, Line of Credit and Subordinated Debt

Borrowings:

At June 30, 2021, total borrowings were $78.8 million compared to $81.2 million at December 31, 2020.  Borrowings consist of the following (dollars in thousands):

	June 30,		December 31,
	2021		2020
Securities sold under customer repurchase agreements	$	3,834	$	5,803
FHLB borrowings		75,000		75,000
Other borrowings		—		396
Total	$	78,834	$	81,199

Securities Sold Under Agreements to Repurchase:

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 $5.6 million and $7.6 million at June 30, 2021 and December 31, 2020, respectively.

Line of Credit:

The Company has a Loan and Security Agreement and revolving note with ServisFirst Bank, pursuant to which ServisFirst Bank has made a $25.0 million revolving line of credit available to the Company. The maturity of the line of credit is September 24, 2021. At June 30, 2021, there was no outstanding balance under the line of credit, and the entire amount of the line of credit remained available to the Company.

Subordinated Debit:

On September 28, 2018, the Company issued $40 million of 5.625% fixed-to-floating rate subordinated notes (the "Notes"), which was outstanding as of June 30, 2021 and December 31, 2020. Unamortized debt issuance cost was $612 thousand and $654 thousand at June 30, 2021 and December 31, 2020, respectively.

The Notes initially bears interest at a rate of 5.625% per annum from and including September 28, 2018, to but excluding October 2, 2023, with interest during this period payable semi-annually in arrears. From and including October 2, 2023, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to three-month LIBOR, or an alternative rate determined in accordance with the terms of the Notes if three-month LIBOR cannot be determined, plus 255 basis points, with interest during this period payable quarterly in arrears. The Notes are redeemable by the Company, in whole or in part, on or after October 2, 2023, and at any time, in whole but not in part, upon the occurrence of certain events. The Notes have been structured to qualify initially as Tier 2 capital for the Company for regulatory capital purposes.

The Notes debt issuance costs totaled $842 thousand and will be amortized through the Notes’ maturity date. Amortization expense totaled $21 thousand and $42 thousand for the three and six months ended June 30, 2021 and June 30, 2020, respectively.