Note 10 - Borrowings -

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

1

0

– Borrowings –

The Bank had outstanding advances from the Federal Home Loan Bank (

FHLB) of

$75.0

million and

$46.4

million at

December 31, 2017

and

2016,

respectively, consisting of:

One

fixed rate loan of

$15.0

million, at

December 31, 2017

and

2016,

with interest at

1.90%

paid monthly. Principal is due at maturity in

December 2018

with quarterly call options beginning in

2013.

One fixed rate loan of $

30.0

million at

December 31, 2017,

with interest at

1.53%

paid monthly. Principal is due at maturity in

March 2018

.

One fixed rate loan of $

30.0

million at

December 31, 2017,

with interest at

2.41%

paid monthly. Principal is due at maturity in

November 2022

.

Three fixed rate loans

totaling

$30.0

million at

December 31, 2016,

with interest rates ranging from

2.92%

to

3.07%

paid monthly. Principal was due at maturity in

November 2017

with quarterly call options beginning in

2008.

One fixed rate loan of $

1.4

million at

December 31, 2016,

with interest at

3.18%

paid monthly. Principal was paid monthly and matured in

December 2017.

These advances are collateralized by the Bank

’s investment in Federal Home Loan Bank stock and a blanket lien on qualifying loans in the Bank’s loan portfolio consisting of performing

1

-

4

family mortgages and certain small business, small farm and small agriculture loans. The blanket lien totaled approximately

$399.5

million at

December 31, 2017

with unused availability for advances and letters of credit of approximately

$243.5

million.

As a result of the merger with AGFC, the Bank assumed the outstanding FHLB advances of American Gateway Bank. These advances were recorded at fair value as of acquisition, which totaled

$41.2

million, and resulted in a mark

et value adjustment of

$2.0

million which was accreted over the life of the respective advances as a reduction of interest expense on borrowings. The unaccreted market value adjustment totaled

$670,000

at

December 31, 2016

and was fully accreted during the year ended

December 31, 2017.

The Bank has outstanding lines of credit with several of its correspondent banks available to assist in the management of short-term liquidity. These agreements provide for interest based upon the federal funds rate on the

outstanding balance. Total available lines of credit as of

December 31, 2017

and

2016

were

$113.5

million and

$109.5

million, respectively. There was

no

balance on these lines at

December 31, 2017

and

2016.

On

September 12, 2016

, the Company borrowed

$3.0

million from First National Bankers Bank (FNBB) with a maturity date of

September 12, 2026.

This advance is due in

nine

annual principal payments of

$300,000

beginning on

September 12, 2017

,

and

one

final principal and interest payment of

$303,000

due on

September 12, 2026.

This advance is secured by a pledge of and security interest in the common stock of our wholly-owned subsidiary, Business First Bank. The balance outstanding was

$2.7

million and

$3.0

million as of

December 31, 2017

and

2016,

respectively. The advance carries a variable interest rate equal to the Wall Street Journal Prime rate. The rate was

4.25%

and

3.75%

as of

December 31,

2017

and

2016,

respectively, a

nd adjusts based on changes in the index rate. This FNBB long term advance was established for the purpose of paying off the revolving line of credit with First Tennessee Bank National Association (FTN).

FNBB

also allows the Company to borrow on a revolving basis up to

$5.0

million. This line of credit, established on

September 12, 2016,

is secured by a pledge of and security interest in the common stock of our wholly-owned subsidiary, Business First Bank. The balance on this line of credit was

$862,000

at both

December 31, 2017

and

2016.

The line of credit bears a variable interest rate equal to the Wall Street Journal Prime rate. The rate was

4.25%

and

3.75%

at

December 31, 2017

and

2016,

respectively, and adjusts based on changes in the index rate. This FNBB line matured on

September 12, 2017

and renewed on

September 29, 2017

for another

one

year term on the same terms and will mature on

September 29, 2018.

This FNBB line was established for the purpose of repurchasing shares of our common stock from certain of our shareholders and for general corporate purposes.