Note 8 - Borrowings

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

Note 8 – Borrowings

Federal Home Loan Bank (“FHLB”) advances consist of the following at September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023					December 31, 2022
	Amount		Weighted Interest Rate			Amount		Weighted Interest Rate
Short-term borrowings	$	35,000		5.68	%	$	93,200		4.45	%
Fixed rate borrowings maturing:
2023		12,000		2.45			57,000		2.22
2024		21,167		4.25			6,167		2.05
2025		7,855		3.40			2,855		1.25
Total FHLB long-term debt	$	41,022		3.56	%	$	66,022		2.16	%

Total FHLB borrowings decreased $83.2 million, or 52.3%, to $76.0 million at September 30, 2023 from $159.2 million at December 31, 2022. During the nine months ended September 30, 2023, the Company borrowed $61.5 million of FHLB short-term borrowings and $20.0 million of FHLB long-term borrowings. During the nine months ended September 30, 2023, the Company paid down $119.7 million of FHLB short-term borrowings and $45.0 million of FHLB long-term borrowings.

Federal Reserve Bank (FRB) borrowings decreased $7.0 million, or 100.0%, to none at September 30, 2023 as the Company paid off the $7.0 million of FRB borrowings at December 31, 2022.

On December 27, 2018, the Company issued $8.0 million in subordinated notes. These notes have a maturity date of December 31, 2028, and bear interest at a fixed rate of 6.50% for the first five years of their term and a floating rate for the remaining five years. The Company may, at its option, at any time on an interest payment date on or after December 31, 2023, redeem the notes, in whole or in part, at par plus accrued interest to the date of redemption.

On March 2, 2023, the Company issued $12.0 million in aggregate principal amount of fixed rate subordinated notes due March 15, 2025 (the “Notes”) to certain qualified institutional buyers. On March 16, 2023, the Company issued an additional $2.0 million in aggregate principal amount of subordinated debt to certain accredited investors under the same terms. The Notes bear interest at a fixed annual rate of 8.50%, payable semi-annually in arrears on March 15 and September 15 of each year, beginning September 15, 2023. The Notes’ maturity date is March 15, 2025. The Company is entitled to redeem the Notes, in whole or in part, on or after March 15, 2024, and to redeem the Notes at any time in whole upon certain other events, at a redemption price equal to 100% of the outstanding principal amount of the Notes to be redeemed plus any accrued and unpaid interest to, but excluding, the redemption date.

The balance of subordinated debt, net of unamortized debt issuance costs, was $21.9 million at September 30, 2023 and $8.0 million at December 31, 2022.

Other short-term borrowings increased $314,000, or 5.7%, to $5.8 million at September 30, 2023 from $5.5 million at December 31, 2022. Other borrowings represent outstanding balances on two lines of credit that Oakmont Capital Holdings, LLC has with a credit union which are used to fund equipment loans. Detail regarding the two lines of credit as of September 30, 2023 is below (in thousands):

	Borrowing Capacity		Borrowings at September 30, 2023		Rate at September 30, 2023			Borrowing Capacity		Borrowings at December 31, 2022		Rate at December 31, 2022
Line of Credit A	$	9,000	$	3,282		8.50	%	$	9,000	$	-		7.00	%
Line of Credit B		6,000		2,521		8.50	%		6,000		5,489		7.50	%
Total	$	15,000	$	5,803				$	15,000	$	5,489