Note 12 - Borrowings

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

1

2

:     BORROWINGS

Federal Home Loan Bank Advances

Federal Home Loan Bank advances consist of the following:

December 31, 2019						December 31, 2018
Maturity Date	Amount		Weighted Average Rate			Maturity Date	Amount		Weighted Average Rate
2020		65,000,000		1.83	%	2019		105,300,000		2.69	%

The FHLB requires the Bank to maintain collateral in relation to outstanding balances of advances. For collateral purposes, the FHLB values mortgage loans free of other pledges, liens and encumbrances at

80%

of their fair value, and investment securities free of other pledges, liens and encumbrances at

95%

of their fair value. Based on existing collateral as well as the FHLB’s limitation of advances to

35%

of assets, the Bank has the ability to borrow an additional

$133.3

million from the FHLB, as of

December 31, 2019.

Federal Reserve Bank Borrowings

During

2008,

the Bank established a borrowing line with the Federal Reserve Bank. The Bank has the ability to borrow

$57.3

million as of

December 31, 2019.

The Federal Reserve Bank requires the Bank to maintain collateral in relation to borrowings outstanding. The Bank had

no

borrowings outstanding on this line as of

December 31, 2019

and

2018.

Note Payable to Bank

During

2019,

The Company increased an established note payable from

$5.0

million to

$11.2

million with another financial institution. The Bank has borrowed

$11.2

million on this note as of

December 31, 2019.

The funds were used to provide additional capital for funding Bank asset growth and to redeem Hometown Bancshares subordinated debentures discussed in Note

13.

The note carries a variable interest rate tied to

30

-day LIBOR plus

250

basis points (

4.24%

at

December 31, 2019)

and matures on

June 30, 2024.

Line of Credit

to Bank

During

2019,

The Company established a

$3.0

million revolving line of credit with another financial institution.

No

amounts were borrowed on this line as of

December 31, 2019.

The funds, if used, will be to provide additional capital for funding Bank asset growth or repurchasing outstanding common shares of stock. The note carries a variable interest rate tied to

30

-day LIBOR plus

250

basis points and matures on

June 28, 2021.