Note 7 - Subordinated Debentures and Other Borrowing Arrangements |
3 Months Ended |
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Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Debt Disclosure [Text Block] |
NOTE 7 – SUBORDINATED DEBENTURES AND OTHER BORROWING ARRANGEMENTS
On December 20, 2019, the Company issued $22.0 million in -year, fixed-to-floating rate subordinated notes to certain qualified institutional buyers and institutional accredited investors. The subordinated notes have a maturity date of December 30, 2029 and bear interest at the rate of 5.0% per annum, payable semiannually for the first five years of the term, and then quarterly at a variable rate based on the then current 3-month Secured Overnight Financing Rate plus 359.5 basis points. The notes are currently redeemable subject to certain conditions. The indebtedness evidenced by the subordinated notes, including principal and interest, is unsecured and subordinate and junior to general and secured creditors and depositors. On the statement of financial condition, the subordinated notes are carried net of debt issuance costs, and these were fully amortized as of December 31, 2024. The interest rate paid on the subordinated notes as of March 31, 2026 was 7.29%.
The Company had unsecured Federal Funds lines of credit with its correspondent banks totaling $209.0 million at March 31, 2026 and $206.0 million at December 31, 2025. As of March 31, 2026, there were $55.0 million of borrowings outstanding, and at December 31, 2025, $60.0 million of borrowings were outstanding. The interest rate paid on the borrowings outstanding at both March 31, 2026 and December 31, 2025, was 3.75%.
The Company has a short-term borrowing arrangement with the Federal Reserve Bank through the Discount Window. The Company currently has a detailed lien on certain loans to secure borrowings. The borrowing capacity under the agreement varies depending on the amount of loans pledged and totaled $981.0 million and $853.9 million as of March 31, 2026 and December 31, 2025, respectively. There were no borrowings outstanding under the agreement at March 31, 2026 or December 31, 2025.
As a member of the Federal Home Loan Bank of San Francisco, the Bank is eligible to use the FHLB’s facilities for short- and long-term borrowing. Borrowing capacity requires stock ownership in the FHLB and is based on pledged assets or a lien against certain loan categories. As of March 31, 2026 and December 31, 2025, there were no borrowings outstanding from the FHLB. The remaining borrowing capacity at March 31, 2026 and December 31, 2025, was $548.7 million and $530.0 million, respectively, under a detailed lien on loans.
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