OTHER BORROWINGS AND CONVERTIBLE DEBENTURES

9 Months Ended

Sep. 30, 2016

OTHER BORROWINGS AND CONVERTIBLE DEBENTURES [Abstract]

OTHER BORROWINGS AND CONVERTIBLE DEBENTURES

6. OTHER BORROWINGS AND CONVERTIBLE DEBENTURES

Federal Home Loan Bank Advances – The Company through the bank has a blanket lien credit line with the FHLB.  FHLB advances are collateralized in the aggregate by CWB’s eligible loans and securities.  There were no FHLB advances outstanding at September 30, 2016 and $5.0 million at December 31, 2015, borrowed at a fixed rate of 0.55%.  The Company also had $100.0 million of letters of credit with FHLB at September 30, 2016 to secure public funds.  At September 30, 2016, CWB had pledged to the FHLB, $31.2 million of securities and $155.9 million of loans.  At September 30, 2016, CWB had $55.8 million available for additional borrowing.  At December 31, 2015, CWB had pledged to the FHLB, $30.5 million of securities and $140.0 million of loans.  At December 31, 2015, CWB had $67.8 million available for additional borrowing.  Total FHLB interest expense for the three months ended September 30, 2016 and 2015 was $7,000 and $6,000, respectively.  Total FHLB interest expense for the nine months ended September 30, 2016 and 2015 were $21,000 and $0.1 million, respectively.

Federal Reserve Bank – The Company has established a credit line with the FRB.  Advances are collateralized in the aggregate by eligible loans for up to 28 days.  There were no outstanding FRB advances as of September 30, 2016 and December 31, 2015.  Available borrowing capacity was $94.9 million and $94.0 million as of September 30, 2016 and December 31, 2015, respectively.

Federal Funds Purchased Lines– The Company has federal funds borrowing lines at correspondent banks totaling $20.0 million.    There was no amount outstanding as of September 30, 2016 and December 31, 2015.

Line of Credit - In October of 2015, the Company entered into a one year revolving line of credit agreement for up to $10.0 million.  At September 30, 2016, the balance was $5.5 million at a rate of 4.274%.  The Company must maintain a compensating deposit with the lender of 25% of the outstanding principal balance in a non-interest-bearing deposit account which was $1.4 million at September 30, 2016 and December 31, 2015, respectively.  In addition, the Company must maintain a minimum debt service coverage ratio of 1.65, a minimum Tier 1 leverage ratio of 7.0% and a minimum total risked based capital ratio of 10.0%.  The Company incurs a quarterly unused commitment fee of 50 basis points per annum on the average available balance.  The outstanding balance of the revolving line of credit converts to a term loan at maturity with quarterly payments of 5% and maturity date of October 31, 2021.