BORROWING ARRANGEMENTS

6 Months Ended

Jun. 30, 2020

BORROWING ARRANGEMENTS [Abstract]

BORROWING ARRANGEMENTS

5.  BORROWING ARRANGEMENTS

Subordinated Debt Securities

In December 2018, the Company issued $26.5 million in subordinated debt securities. $12.4 million of the securities have a maturity date of December 2028 and an average fixed rate of 5.74% for the first five years. The remaining $14.1 million of securities have a maturity date of December 2030 and an average fixed rate of 6.41% for the first seven years. After the expiration of the fixed rate periods, all securities will float at the Wall Street Journal prime rate, with a floor of 4.5% and a ceiling of 7.5%. These securities pay interest quarterly, are unsecured, and may be called by the Company at any time after the remaining maturity is five years or less. Additionally, these securities qualify for Tier 2 capital treatment, subject to regulatory limitations.

Notes Payable and Other Borrowings

City Bank has multiple advances from FHLB. The advances are collateralized through the line of credit with FHLB with interest payable monthly and principal due at maturity. In April 2020, City Bank borrowed $75 million from FHLB, on a term of three months, for liquidity needs associated with funding Paycheck Protection Program loans.