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Deposits and Borrowings

9 Months Ended

Sep. 30, 2023

Note 6— Deposits and Borrowings

The following tables show the components of the Company’s funding sources.


(Dollars in thousands)	September 30, 2023		December 31, 2022
Deposits:
Non-interest bearing demand deposits⁽¹⁾	$	437,880	$	476,697
Interest-bearing demand deposits⁽¹⁾		675,819		691,945
Savings deposits		57,408		95,241
Time deposits⁽²⁾		810,516		803,857
Total Deposits	$	1,981,623	$	2,067,740


						September 30, 2023		December 31, 2022
(Dollars in thousands)	Stated Interest Rate		Weighted-Average Interest Rate			Carrying Value		Carrying Value
Short-term Debt:
Federal Reserve Bank borrowings	4.80	%		4.80	%	$	54,000		—
Total Short-term Debt						$	54,000		—
Long-term Debt:
Subordinated debt	5.25	%		5.25	%	$	24,687	$	24,624
Total Long-term Debt						$	24,687	$	24,624

(1) Overdraft demand deposits reclassified to loans totaled $5 thousand at September 30, 2023 and $1 thousand at December 31, 2022, respectively.

(2)	The aggregate amount of certificates of deposit with a minimum denomination of $250,000 was $358.6 million and $318.7 million at September 30, 2023 and December 31, 2022, respectively.

The Company obtains certain deposits through the efforts of third-party brokers. Brokered deposits totaled $288.9 million and $352.0 million at September 30, 2023 and December 31, 2022, respectively, and were included primarily in time deposits on the Company’s Consolidated Balance Sheets. Reciprocal IntraFi certificates of deposit totaled $41.7 million and $25.7 million at September 30, 2023 and December 31, 2022, respectively. Reciprocal IntraFi demand and money market deposits totaled $265.6 million and $197.3 million at September 30, 2023 and December 31, 2022, respectively.

At September 30, 2023, there were no depositors that represented 5% or more of the Company’s total deposits.

The Company completed a private placement of a $25.0 million fixed-to-floating subordinated note on June 15, 2022. Subject to limited exceptions permitting earlier redemption, the note is callable, in whole or in part, commencing July 1, 2027. Unless redeemed earlier, the note will mature on July 1, 2032. The note bears interest at a fixed rate of 5.25% to but excluding July 1, 2027, and will bear interest at a floating rate equal to the three-month Secured Overnight Financing Rate plus 245 basis points thereafter. The note is carried at its principal amount, less unamortized issuance costs.

The Company from time to time uses FHLB advances as a source of funding and to manage interest rate risk. FHLB advances are secured by a blanket floating lien on all real estate mortgage loans secured by 1-to-4 family residential, multi-family and commercial real estate properties. At September 30, 2023, the Company did not have any outstanding FHLB advances. Available borrowing capacity based on collateral value amounted to approximately $444.7 million as of September 30, 2023.

The Company also has the capacity to borrow up to $24.8 million at the Federal Reserve discount window of which $0 had been drawn upon at September 30, 2023. The Bank had loans pledged at the Federal Reserve discount window totaling $26.5 million as of September 30, 2023.

On March 12, 2023, the Federal Reserve Bank of Richmond (“Reserve Bank”) made available the Bank Term Funding Program (“BTFP”), which enhances the ability of banks to borrow against the par value of certain high-quality, unencumbered investments. On May 15, 2023, the Company obtained a $54.0 million BTFP advance to secure lower funding costs relative to wholesale deposits. The BTFP advance has a term of one year, bears interest at a fixed rate of 4.80% and can be prepaid without penalty prior to maturity. At September 30, 2023, the Company had pledged as collateral for the BTFP advance investment securities with an amortized cost and fair value of $55.5 million and $42.6 million, respectively.

The Company also has federal funds lines of credit with correspondent banks available for overnight borrowing of $110.0 million, of which $0 had been drawn upon at September 30, 2023.

The following table shows the carrying amount of the Company’s time deposits by contractual maturity as of September 30, 2023.


(Dollars in thousands)	September 30, 2023
2023	$	146,873
2024		477,572
2025		144,346
2026		40,324
2027		1,117
Thereafter		284
Total	$	810,516