Note 10 - Borrowings

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 10: BORROWINGS

Federal Home Loan Bank Advances

Federal Home Loan Bank advances consist of the following:

December 31, 2021						December 31, 2020
Maturity Date	Amount		Weighted Average Rate			Maturity Date		Amount		Weighted Average Rate
2023		6,500,000		0.59	%		2021		50,000,000		0.35	%
2025		6,500,000		0.82	%		2023		6,500,000		0.59	%
2027		3,000,000		1.12	%		2025		6,500,000		0.82	%
	$	16,000,000		0.78	%		2027		3,000,000		1.12	%
								$	66,000,000		0.45	%

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 45% of assets, the Bank has the ability to borrow an additional $145.9 million from the FHLB, as of December 31, 2021.

Federal Reserve Bank Borrowings

During 2008, the Bank established a borrowing line with the Federal Reserve Bank. The Bank has the ability to borrow $57.2 million as of December 31, 2021. 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, 2021 and 2020.

Note Payable to Bank

As of December 31, 2019, the Company had an established note payable of $11.2 million with another financial institution. The note was fully drawn as of December 31, 2019 with the original purpose to provide additional capital for funding Bank asset growth and to redeem Hometown Bancshares subordinated debentures discussed in Note 11. The note carried a variable interest rate tied to 30-day LIBOR plus 250 basis points (4.24% at December 31, 2019). In July 2020, proceeds from a subordinated debt offering, discussed in Note 12, were used to completely pay off the note payable.

Line of Credit to Bank

During 2019, The Company established a $3.0 million revolving line of credit with another financial institution. The line of credit was renewed during 2021 and increased to a $5.0 million revolving line of credit. 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 with a floor of 350 basis points and matures on June 27, 2022. No amounts were borrowed on this line as of December 31, 2021 or 2020.