UWHARRIE CAPITAL CORP

Previous wording

During the six months ended June 30, 2024, the Company’s total assets increased $50.7 million, from $1.07 billion to $1.12 billion.

Current wording

During the nine months ended September 30, 2024, the Company’s total assets increased $108.5 million, from $1.07 billion to $1.18 billion.

Previous wording

Cash and cash equivalents decreased $6.0 million during the six months ended June 30, 2024, from $63.4 million to $57.4 million. The decrease in cash and cash equivalents was used to fund growth in the loan portfolio.

Current wording

Cash and cash equivalents increased $60.5 million during the nine months ended September 30, 2024, from $63.4 million to $123.9 million. The increase is related to continued growth in deposits.

Previous wording

Investment securities consist of securities available for sale and securities held to maturity. For the six-month period ended June 30, 2024, investment securities increased $12.7 million from $365.3 million at December 31, 2023 to $378.0 million at June 30, 2024. At June 30, 2024, the Company had net unrealized losses on securities available for sale of $34.1 million, compared to net unrealized losses of $32.6 million at December 31, 2023, a deterioration of $1.5 million. The decline in fair value of the available for sale securities is related to the increase in market interest rates at June 30, 2024 compared to December 31, 2023. During the first six months of 2024, a $10,000 provision was recorded against the allowance for credit losses on securities held to maturity bringing the balance to $66,000, with an amortized cost basis of $27.3 million, at June 30, 2024.

Current wording

Investment securities consist of securities available for sale and securities held to maturity. For the nine-month period ended September 30, 2024, investment securities decreased $5.8 million from $365.3 million at December 31, 2023 to $359.5 million at September 30, 2024. At September 30, 2024, the Company had net unrealized losses on securities available for sale of $25.1 million, compared to net unrealized losses of $32.6 million at December 31, 2023, an improvement of $7.4 million. The improvement in the fair value of available for sale securities offset $12.1 million in net paydowns and maturities during the nine months ended September 30, 2024. During the first nine months of 2024, a $10,000 provision was recorded against the allowance for credit losses on securities held to maturity bringing the balance to $66,000, with an amortized cost basis of $26.8 million, at September 30, 2024.

Previous wording

At June 30, 2024, equity securities improved in value from $302,000 at December 31, 2023 to $324,000 as a result of the increase in value in the equity market.

Current wording

At September 30, 2024, equity securities improved in value from $302,000 at December 31, 2023 to $355,000 as a result of the increase in value in the equity market.

Previous wording

Loans held for sale decreased $1.1 million from December 31, 2023 to $3.6 million at June 30, 2024. Loans held for investment increased from $592.1 million at December 31, 2023 to $636.7 million at June 30, 2024, an increase of $44.7 million. The Company experienced a net increase in all loan sectors with the exception of loans categorized as “Commercial - Other” and "Consumer."

Current wording

Loans held for sale increased $92,000 from December 31, 2023 to $4.8 million at September 30, 2024. Loans held for investment increased from $592.1 million at December 31, 2023 to $647.1 million at September 30, 2024, an increase of $55.1 million. The Company experienced a net increase in all loan sectors with the exception of loans categorized as “Commercial - Other."

Previous wording

The allowance for credit losses on loans was $5.9 million at June 30, 2024, which represented 0.93% of total loans held for investment, compared to $5.6 million, or 0.94% of total loans held for investment, at December 31, 2023. Additional discussion regarding the allowance is included in the Asset Quality section below.

Current wording

The allowance for credit losses on loans was $5.7 million at September 30, 2024, which represented 0.89% of total loans held for investment, compared to $5.6 million, or 0.94% of total loans held for investment, at December 31, 2023. Additional discussion regarding the allowance is included in the Asset Quality section below.

Previous wording

Other changes in the Company’s consolidated assets are primarily related to interest receivable, which increased $295,000 from $4.4 million as of December 31, 2023 to $4.7 million at June 30, 2024 as a result of the $44.7 million above-mentioned loan growth. Annual Company contributions, offset by negative market adjustments, increased the balance of supplemental executive retirement plans by $177,000 during the six months ended June 30, 2024. Additionally, prepaid expenses, included in other assets, increased $149,000 from $1.4 million as of December 31, 2023 to $1.6 million at June 30, 2024.

Current wording

Other changes in the Company’s consolidated assets are primarily related to deferred tax assets, which decreased $1.9 million from $8.9 million at December 31, 2023 to $7.0 million at September 30, 2024 as a result of the improvement in fair value of the available for sale security portfolio. Interest receivable increased $428,000 from $4.4 million as of December 31, 2023 to $4.8 million at September 30, 2024. This increase was attributable to the $55.1 million above-mentioned loan growth.

Previous wording

Customer deposits, our primary funding source, experienced a $42.4 million increase during the six-month period ended June 30, 2024, increasing from $981.7 million to $1.02 billion. The overall increase in deposits is attributable to organic deposit growth combined with promotional time deposit offerings. Demand noninterest-bearing checking accounts increased $16.5 million, primarily from growth in commercial accounts, and time deposits increased $57.9 million during the six-month period ended June 30, 2024. Interest checking and money market accounts decreased $26.1 million and savings deposits decreased $6.0 million during the six months ended June 30, 2024. The decrease in interest checking, money market and savings accounts is primarily related to the movement of funds into the Company’s higher yielding time deposits.

Current wording

Customer deposits, our primary funding source, experienced a $96.1 million increase during the nine-month period ended September 30, 2024, increasing from $981.7 million to $1.08 billion. The overall increase in deposits is attributable to organic deposit growth combined with promotional time deposit offerings. Demand noninterest-bearing checking accounts increased $18.3 million, primarily from growth in commercial accounts, and time deposits increased $70.5 million during the nine-month period ended September 30, 2024. Interest checking and money market accounts increased $13.9 million and savings deposits decreased $6.6 million during the nine months ended September 30, 2024.

Previous wording

September 30, 2024. This junior subordinated debt pays interest quarterly at an annual fixed rate of 5.25%. During the third quarter of 2021, the Company issued $12.0 million and $8.0 million of 10-year and 15-year fixed-to-floating rate subordinated debt securities, respectively. The 10-year subordinated notes mature on September 3, 2031, though they are redeemable at the Company’s option on or after September 3, 2026, and initially pay interest quarterly at an annual rate of 3.5%. From and including September 3, 2026 to but excluding September 3, 2031, or up to any early redemption date, the interest rate on the 10-year subordinated notes will reset quarterly to an annual rate equal to the then-current three-month secured overnight financing rate (“SOFR”), plus 283 basis points payable quarterly in arrears. The 15-year subordinated notes mature on September 3, 2036, though they are redeemable at the Company’s option on or after September 3, 2031, and initially pay interest quarterly at an annual rate of 4.0%. From and including September 3, 2031 to but excluding September 3, 2036, or up to any early redemption date, the interest rate on the 15-year subordinated notes will reset quarterly to an annual rate equal to the then-current three-month SOFR plus 292 basis points payable quarterly in arrears. The subordinated debt has been structured to qualify as and is included in the calculation of the Company’s Tier 2 capital. The Company also has a $3.0 million line of credit of which $3.0 million was available to use at June 30, 2024.

Current wording

Total short-term borrowings increased $40,000 for the nine-month period ended September 30, 2024. At September 30, 2024, the Company had $29.1 million in long-term debt outstanding, which consists solely of its junior subordinated debt securities, net of unamortized debt issuance costs. During the third quarter of 2019, the Company issued $10.0 million in subordinated debt securities with a final maturity date of September 30, 2029 that may be redeemed on or after September 30, 2024. This junior subordinated debt pays interest quarterly at an annual fixed rate of 5.25%. During the third quarter of 2021, the Company issued $12.0 million and $8.0 million of 10-year and 15-year fixed-to-floating rate subordinated debt securities, respectively. The 10-year subordinated notes mature on September 3, 2031, though they are redeemable at the Company’s option on or after September 3, 2026, and initially pay interest quarterly at an annual rate of 3.5%. From and including September 3, 2026 to but excluding September 3, 2031, or up to any early redemption date, the interest rate on the 10-year subordinated notes will reset quarterly to an annual rate equal to the then-current three-month secured overnight financing rate (“SOFR”), plus 283 basis points payable quarterly in arrears. The 15-year subordinated notes mature on September 3, 2036, though they are redeemable at the Company’s option on or after September 3, 2031, and initially pay interest quarterly at an annual rate of 4.0%. From and including September 3, 2031 to but excluding September 3, 2036, or up to any early redemption date, the interest rate on the 15-year subordinated notes will reset quarterly to an annual rate equal to the then-current three-month SOFR plus 292 basis points payable quarterly in arrears. The subordinated debt has been structured to qualify as and is included in the calculation of the Company’s Tier 2 capital. Of the subordinated debt that remains outstanding at September 30, 2024, $27.2 million qualifies as Tier 2 capital. The Company also has a $3.0 million line of credit of which $3.0 million was available to use at September 30, 2024.

Previous wording

Other changes in the Company’s liabilities are related to an increase of $770,000 in other liabilities from December 31, 2023 to June 30, 2024 resulting primarily from accrual of reserves for payables due throughout 2024. Accrued interest payable increased $153,000 during the same six-month period as higher interest rates were paid on deposit accounts.

Current wording

Other changes in the Company’s liabilities are related to an increase of $872,000 in other liabilities from December 31, 2023 to September 30, 2024 resulting primarily from accrual of reserves for payables due throughout 2024.

Previous wording

At June 30, 2024, total shareholders’ equity was $41.5 million, an increase of $2.7 million from December 31, 2023. Net income for the six-month period ended June 30, 2024 was $4.6 million, which positively contributed to our shareholders’ equity. During the six months ended June 30, 2024, the Company repurchased 55,861 shares of common stock at a total cost of $436,000, and the Company paid $282,000 in dividends attributable to noncontrolling interest during the same period. See Note 3 (Noncontrolling Interest) to the Company’s Notes to Consolidated Financial Statements for additional discussion of the noncontrolling interest.

Current wording

At September 30, 2024, total shareholders’ equity was $61.1 million, an increase of $11.7 million from December 31, 2023. Net income for the nine-month period ended September 30, 2024 was $7.6 million, which positively contributed to our shareholders’ equity. Additionally, improvement in the unrealized loss position on our available for sale securities portfolio contributed $5.7 million to the increase in shareholders' equity during the same nine-month period. During the nine months ended September 30, 2024, the Company repurchased 160,115 shares of common stock at a total cost of $1.3 million, and the Company paid $424,000 in dividends attributable to noncontrolling interest during the same period. See Note 3 (Noncontrolling Interest) to the Company’s Notes to Consolidated Financial Statements for additional discussion of the noncontrolling interest. On October 15, 2024, the Company's Board of Directors declared a 2% stock dividend payable on November 18, 2024 to shareholders of record on October 28, 2024. All information presented in this discussion and analysis and in the interim consolidated financial statements regarding earnings per share and weighted average number of shares outstanding has been computed giving effect to this stock dividend.

Previous wording

Uwharrie Capital Corp reported net income of $2.2 million for both three-month periods ended June 30, 2024 and 2023. Net income available to common shareholders was $2.1 million, or $0.29 per common share, for the three months ended June 30, 2024 and 2023. Net income available to common shareholders is net income less dividends on the aforementioned noncontrolling interest.

Current wording

Uwharrie Capital Corp reported net income of $3.0 million for the three months ended September 30, 2024, as compared to $2.1 million for the three months ended September 30, 2023. Net income available to common shareholders was $2.9 million, or $0.40 per common share, for the three months ended September 30, 2024 compared to $2.0 million, or $0.27 per common share, for the three months ended September 30, 2023. Net income available to common shareholders is net income less dividends on the aforementioned noncontrolling interest.

Previous wording

Net interest income for the three months ended June 30, 2024 was $8.8 million, a $749,000 increase from the $8.1 million reported for the comparative period in 2023. During the second quarter of 2024, the average yield on our interest-earning assets increased 56 basis points to 5.14% from the same period in 2023, and the average rate we paid for our interest-bearing liabilities increased 67 basis points to 2.40%. These changes resulted in a lower interest rate spread of 2.74% as of June 30, 2024, compared to 2.85% as of June 30, 2023. The Company’s net interest margin was 3.42% and 3.34% for the comparable periods in 2024 and 2023, respectively.

Current wording

Net interest income for the three months ended September 30, 2024 was $9.1 million, an $881,000 increase from the $8.2 million reported for the comparative period in 2023. During the third quarter of 2024, the average yield on our interest-earning assets increased 48 basis points to 5.18% from the same period in 2023, and the average rate we paid for our interest-bearing liabilities increased 60 basis points to 2.55%. These changes resulted in a lower interest rate spread of 2.63% as of September 30, 2024, compared to 2.76% as of September 30, 2023. The Company’s net interest margin was 3.34% and 3.30% for the comparable periods in 2024 and 2023, respectively.

Previous wording

The provision for credit losses was $431,000 for the three months ended June 30, 2024, compared to a provision of $109,000 for the same period in 2023. There were net loan charge-offs of $24,000 for the three months ended June 30, 2024, as compared to net loan recoveries of $16,000 during the same period of 2023. Refer to the Asset Quality section below for further information.

Current wording

The recovery of credit losses was $230,000 for the three months ended September 30, 2024, compared to a provision of $599,000 for the same period in 2023. There were net loan recoveries of $51,000 for the three months ended September 30, 2024, as compared to net loan charge-offs of $196,000 during the same period of 2023. Refer to the Asset Quality section below for further information.

Previous wording

The Company places significant emphasis on diversification of revenue sources rather than relying solely upon interest income. Total noninterest income decreased by $460,000 for the three-month period ended June 30, 2024, as compared to the same period in 2023. Negative market valuation adjustments on supplemental executive retirement plans contributed $351,000 to the decrease in total noninterest income. This decrease was supplemented by a decline of $285,000 in income from mortgage banking due to the fluctuation in the value of mortgage banking derivatives as several loans were designated as held for investment rather than available for sale during the three months ended June 30, 2023.

Current wording

The Company places significant emphasis on diversification of revenue sources rather than relying solely upon interest income. Total noninterest income increased by $10,000 for the three-month period ended September 30, 2024, as compared to the same period in 2023. Other service fees and commissions contributed $116,000 to the increase in total noninterest income. The increase in noninterest income was offset by a decrease in income from mortgage banking of $96,000.

Previous wording

Noninterest expense for the three months ended June 30, 2024 decreased by $10,000 from the same period in 2023. Salaries and benefits, the largest component of noninterest expense, increased $213,000 due to wage increases and more commissions paid on increased production in the mortgage division during the 2024 period. Negative market adjustments of $351,000 on supplemental executive retirement plans served to offset the increase from salaries and employee benefits.

Current wording

Noninterest expense for the three months ended September 30, 2024 increased by $430,000 from the same period in 2023. Salaries and benefits, the largest component of noninterest expense, increased $330,000 due to wage increases during the 2024 period.

Previous wording

Total other noninterest expense increased $62,000 for the three months ended June 30, 2024, compared to the same period in 2023. The table below reflects the composition of other noninterest expense for the referenced periods.

Current wording

Total other noninterest expense increased $25,000 for the three months ended September 30, 2024, compared to the same period in 2023. The table below reflects the composition of other noninterest expense for the referenced periods.

Previous wording

The Company had income tax expense of $566,000 for the three months ended June 30, 2024 at an effective tax rate of 20.4% compared to income tax expense of $579,000 with an effective tax rate of 20.7% in the comparable 2023 period. Income taxes computed at the statutory rate are primarily affected by the state income tax expense offset by the eligible amount of interest earned on state and municipal securities, tax-free municipal loans and income earned on bank-owned life insurance.

Current wording

The Company had income tax expense of $962,000 for the three months ended September 30, 2024 at an effective tax rate of 24.1% compared to income tax expense of $558,000 with an effective tax rate of 20.6% in the comparable 2023 period. Income taxes computed at the statutory rate are primarily affected by the state income tax expense offset by the eligible amount of interest earned on state and municipal securities, tax-free municipal loans and income earned on bank-owned life insurance. For the three months ended September 30, 2024, the effective tax rate increased due to the increase in interest expense disallowance resulting from compliance

Previous wording

Results of Operations for the Six Months Ended June 30, 2024 and 2023.

Current wording

Results of Operations for the Nine Months Ended September 30, 2024 and 2023.

Previous wording

Uwharrie Capital Corp reported net income of $4.6 million for the six months ended June 30, 2024, as compared to $4.2 million for the six months ended June 30, 2023, an increase of $419,000. Net income available to common shareholders was $4.3 million, or $0.61 per common share, for the six months ended June 30, 2024, compared to $3.9 million, or $0.54 per common share, for the six months ended June 30, 2023. Net income available to common shareholders is net income less dividends on the aforementioned noncontrolling interest.

Current wording

Uwharrie Capital Corp reported net income of $7.6 million for the nine months ended September 30, 2024, as compared to $6.3 million for the nine months ended September 30, 2023, an increase of $1.3 million. Net income available to common shareholders was $7.2 million, or $1.00 per common share, for the nine months ended September 30, 2024, compared to $5.9 million, or $0.80 per common share, for the nine months ended September 30, 2023. Net income available to common shareholders is net income less dividends on the aforementioned noncontrolling interest.

Previous wording

Net interest income for the six months ended June 30, 2024 was $17.4 million, a $1.4 million increase from the $15.9 million reported for the comparative period in 2023. During the first six months of 2024, the average yield on our interest-earning assets increased 61 basis points to 5.07% from the same period in 2023, and the average rate we paid for our interest-bearing liabilities increased 74 basis points to 2.31%. These changes resulted in a lower interest rate spread of 2.76% as of June 30, 2024, compared to 2.89% as of June 30, 2023. The Company’s net interest margin was 3.40% and 3.33% for the comparable periods in 2024 and 2023, respectively.

Current wording

Net interest income for the nine months ended September 30, 2024 was $26.4 million, a $2.3 million increase from the $24.1 million reported for the comparative period in 2023. During the first nine months of 2024, the average yield on our interest-earning assets increased 57 basis points to 5.11% from the same period in 2023, and the average rate we paid for our interest-bearing liabilities increased 70 basis points to 2.40%. These changes resulted in a lower interest rate spread of 2.71% as of September 30, 2024, compared to 2.84% as of September 30, 2023. The Company’s net interest margin was 3.38% and 3.32% for the comparable periods in 2024 and 2023, respectively.

Previous wording

The following table presents average balance sheet and a net interest income analysis for the six months ended June 30, 2024 and 2023, respectively:

Current wording

The following table presents average balance sheet and a net interest income analysis for the nine months ended September 30, 2024 and 2023, respectively:

Previous wording

The provision for credit losses was $401,000 for the six months ended June 30, 2024, compared to a provision of $386,000 for the same period in 2023. There were net loan charge-offs of $58,000 for the six months ended June 30, 2024, as compared to net loan charge-offs of $376,000 during the same period of 2023. Refer to the Asset Quality section below for further information.

Current wording

The provision for credit losses was $171,000 for the nine months ended September 30, 2024, compared to a provision of $985,000 for the same period in 2023. There were net loan charge-offs of $7,000 for the nine months ended September 30, 2024, as compared to net loan charge-offs of $572,000 during the same period of 2023. Refer to the Asset Quality section below for further information.

Previous wording

The Company places significant emphasis on diversification of revenue sources rather than relying solely upon interest income. Total noninterest income decreased by $113,000 for the six-month period ended June 30, 2024, as compared to the same period in 2023. The primary factor contributing to the overall decline in noninterest income was a decrease of $145,000 in income from mortgage banking. This decrease is the result of several loans being converted from available for sale to held for investment during the first half of 2023, which improved the value of interest rate lock commitments during the 2023 period.

Current wording

The Company places significant emphasis on diversification of revenue sources rather than relying solely upon interest income. Total noninterest income decreased by $103,000 for the nine-month period ended September 30, 2024, as compared to the same period in 2023. The primary factor contributing to the overall decline in noninterest income was a decrease of $241,000 in income from mortgage banking. This decrease is the result of a decline in the unclosed mortgage pipeline from December 31, 2023 to September 30, 2024.

Previous wording

Noninterest expense for the six months ended June 30, 2024 increased by $747,000 from the same period in 2023, to $15.7 million. Salaries and employee benefits contributed $683,000 to the increase in noninterest expense due to salary increases and more commissions paid on increased mortgage production during the first six months of 2024.

Current wording

Noninterest expense for the nine months ended September 30, 2024 increased by $1.2 million from the same period in 2023, to $23.5 million. Salaries and employee benefits contributed $1.0 million to the increase in noninterest expense due to salary increases and more commissions paid on increased mortgage production during the 2024 period.

Previous wording

Total other noninterest expense increased $86,000 for the six months ended June 30, 2024, compared to the same period in 2023. The table below reflects the composition of other noninterest expense for the referenced periods.

Current wording

Total other noninterest expense increased $111,000 for the nine months ended September 30, 2024, compared to the same period in 2023. The table below reflects the composition of other noninterest expense for the referenced periods.

Previous wording

The Company had income tax expense of $1.2 million for the six months ended June 30, 2024 at an effective tax rate of 20.7% compared to income tax expense of $1.1 million with an effective tax rate of 20.1% in the comparable 2023 period. Income taxes computed at the statutory rate are primarily affected by the state income tax expense offset by the eligible amount of interest earned on state and municipal securities, tax-free municipal loans and income earned on bank-owned life insurance. For the six months ended June 30, 2024, the effective tax rate increased due to the increase in interest expense disallowance resulting from compliance with the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”). The larger disallowance is due to greater projected interest expense for 2024 compared to 2023.

Current wording

The Company had income tax expense of $2.2 million for the nine months ended September 30, 2024 at an effective tax rate of 22.1% compared to income tax expense of $1.6 million with an effective tax rate of 20.3% in the comparable 2023 period. Income taxes computed at the statutory rate are primarily affected by the state income tax expense offset by the eligible amount of interest earned on state and municipal securities, tax-free municipal loans and income earned on bank-owned life insurance. For the nine months ended September 30, 2024, the effective tax rate increased due to the increase in interest expense disallowance resulting from compliance with the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”). The larger disallowance is due to greater projected interest expense for 2024 compared to 2023 and an adjustment in the TEFRA calculation to differentiate between bank qualified and non-bank qualified bonds.

Previous wording

At June 30, 2024, the level of our individually assessed loans, which includes all loans in nonaccrual status with total relationship exposure of more than $100,000 of collateral dependency, was $1.4 million. The allowance for credit losses related to individually evaluated loans was $164,000 at June 30, 2024.

Current wording

At September 30, 2024, the level of our individually assessed loans, which includes all loans in nonaccrual status with total relationship exposure of more than $100,000 of collateral dependency, was $285,000. The allowance for credit losses related to individually evaluated loans was $187,000 at September 30, 2024.

Previous wording

The allowance, expressed as a percentage of gross loans held for investment, decreased one basis point from 0.94% at December 31, 2023 to 0.93% at June 30, 2024. The ratio of nonaccrual loans to total loans increased from 0.19% at December 31, 2023 to 0.25% at June 30, 2024, and was related to the $487,000 increase in nonaccrual loans. Three loans totaling $613,000 were converted to nonaccrual during the first half of 2024, offset by principal payments, one loan that was paid off and one loan that was charged off.

Current wording

The allowance, expressed as a percentage of gross loans held for investment, decreased five basis points from 0.94% at December 31, 2023 to 0.89% at September 30, 2024. The primary driver of the reduction in allowance was the decline in the 10-Year T-Bill forecast which is utilized in the regression model for our probability of default forecast. The ratio of nonaccrual loans to total loans decreased from 0.19% at December 31, 2023 to 0.09% at September 30, 2024, and was related to the $543,000 decrease in nonaccrual loans. Four loans totaling $449,000 were paid off and one loan totaling $16,000 was removed from nonaccrual during the first nine months of 2024, offset by four loans totaling $204,000 that were converted to nonaccrual. Principal payments in the amount of $282,000 were received during the same period.

Previous wording

The Company’s primary sources of internally generated funds are principal and interest payments on loans, cash flows generated from operations and cash flow generated by investments. Growth in deposits is typically the primary source of funds for loan growth. Estimated uninsured deposits, including deposits collateralized by pledged assets, represented 39.1% of total deposits at June 30, 2024 and 36.5% of total deposits at December 31, 2023. The Company and its subsidiary bank have multiple funding sources, in addition to deposits, that can be used to increase liquidity and provide additional financial flexibility. At June 30, 2024, these sources were the subsidiary bank’s established federal funds lines with correspondent banks aggregating $38.0 million, with available credit of $38.0 million; an established borrowing relationship with the FHLB, with available credit of $160.9 million; and access to borrowings from the FRB discount window, with available credit of $35.9 million. In January 2024, the Company secured $5.0 million in other short-term borrowed funds through the BTFP. The note is secured by three available for sale agency securities issued by the Small Business Administration. The Company also has a $3.0 million line of credit with TIB The Independent BankersBank, N.A. The line is held by the holding company and is secured with 100% of the outstanding common shares of the Company’s subsidiary bank. As of June 30, 2024, $3.0 million remained available for use on the line of credit.

Current wording

2024 and 36.5% of total deposits at December 31, 2023. The Company and its subsidiary bank have multiple funding sources, in addition to deposits, that can be used to increase liquidity and provide additional financial flexibility. At September 30, 2024, these sources were the subsidiary bank’s established federal funds lines with correspondent banks aggregating $38.0 million, with available credit of $38.0 million; an established borrowing relationship with the FHLB, with available credit of $136.3 million; and access to borrowings from the FRB discount window, with available credit of $29.0 million. The Company also has a $3.0 million line of credit with TIB The Independent BankersBank, N.A. The line is held by the holding company and is secured with 100% of the outstanding common shares of the Company’s subsidiary bank. As of September 30, 2024, $3.0 million remained available for use on the line of credit.

Previous wording

The Company’s subsidiary bank has a net total of $10.7 million in outstanding Fixed Rate Noncumulative Perpetual Preferred Stock. The preferred stock qualifies as Tier 1 capital at the Bank and pays dividends at an annual rate of 5.30%. The net total of $10.7 million is presented as noncontrolling interest at the Company level and qualifies as Tier 1 capital at the Company. At June 30, 2024, the Company had $29.1 million, net of unamortized debt issuance costs, in subordinated debt outstanding, which qualifies as Tier 2 capital at the Company level. The Company has made all interest and dividend payments in a timely manner.

Current wording

The Company’s subsidiary bank has a net total of $10.7 million in outstanding Fixed Rate Noncumulative Perpetual Preferred Stock. The preferred stock qualifies as Tier 1 capital at the Bank and pays dividends at an annual rate of 5.30%. The net total of $10.7 million is presented as noncontrolling interest at the Company level and qualifies as Tier 1 capital at the Company. At September 30, 2024, the Company had $29.1 million, net of unamortized debt issuance costs, in subordinated debt outstanding, of which $27.2 million qualifies as Tier 2 capital at the Company level. The Company has made all interest and dividend payments in a timely manner.

Previous wording

The timing and amount of our contractual obligations has changed materially since our 2023 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 6, 2024. During the first quarter of 2024, the Company borrowed $5.0 million through the BTFP. The note matures on January 22, 2025 and charges interest at a rate of 4.93%.

Current wording

The timing and amount of our contractual obligations has not changed materially since our 2023 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 6, 2024.