Debt |
9 Months Ended |
|---|---|
Sep. 30, 2016 | |
| Debt Disclosure [Abstract] | |
| Debt |
Debt
FHLB Borrowings
The Bank had $55.0 million and $170.0 million in advances (borrowings) from the FHLB as of September 30, 2016 and December 31, 2015, respectively. The FHLB advances were all overnight borrowings at September 30, 2016 and December 31, 2015. For the three months ended September 30, 2016 and 2015, interest expense on FHLB advances was $179,000 and $1,000, respectively, and the weighted-average interest rate was 0.47 percent and 0.21 percent, respectively. For the nine months ended September 30, 2016 and 2015, interest expense on FHLB advances was $673,000 and $61,000, respectively, and the weighted-average interest rate was 0.44 percent and 0.18 percent, respectively.
The Bank maintains a secured credit facility with the FHLB, allowing the Bank to borrow on an overnight and term basis. The Bank had $1.0 billion of loans pledged as collateral with the FHLB, which provides $751.3 million in borrowing capacity, of which $696.3 million remained available at September 30, 2016.
The Bank also has $11.3 million of securities pledged with the FRB, which provides $11.1 million in available borrowing capacity through the Fed Discount Window. There were no outstanding borrowings with the FRB as of September 30, 2016 and December 31, 2015.
Subordinated Debentures
The Company assumed Junior Subordinated Deferrable Interest Debentures (“Subordinated Debentures”) as a result of the acquisition of CBI with an unpaid principal balance of $26.8 million and an estimated fair value of $18.5 million. The $8.3 million discount is being amortized to interest expense through the debentures' maturity date of March 15, 2036. CBI formed a trust in 2005 and issued $26.0 million of Trust Preferred Securities (“TPS”) at 6.26 percent fixed rate for the first five years and a variable rate at the 3 month LIBOR plus 140 basis points thereafter and invested the proceeds in the Subordinated Debentures. The Company may redeem the Subordinated Debentures at an earlier date if certain conditions are met. The TPS will be subject to mandatory redemption if the Subordinated Debentures are repaid by the Company. Interest is payable quarterly, and the Company has the option to defer interest payments on the Subordinated Debentures from time to time for a period not to exceed five consecutive years. The amortization of discount was $67,000 and $46,000 for the three months ended September 30, 2016, and 2015, respectively, and $185,000 and $125,000 for the nine months ended September 30, 2016, and 2015, respectively.
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