BORROWING ARRANGEMENTS

6 Months Ended

Jun. 30, 2024

BORROWING ARRANGEMENTS [Abstract]

BORROWING ARRANGEMENTS

6.  BORROWING ARRANGEMENTS

Subordinated Debt

In December 2018, the Company issued $14.1 million of notes that have a maturity date of December 2030 and a weighted average fixed rate of 6.41% for the first seven years. After the fixed rate periods, the notes will float at the Wall Street Journal prime rate, with a floor of 4.0% and a ceiling of 7.5%. These notes 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 notes are intended to qualify for Tier 2 capital treatment, subject to regulatory limitations.

On September 29, 2020, the Company issued $50.0 million in subordinated debt notes. Proceeds were reduced by approximately $926 thousand in debt issuance costs. The notes have a maturity date of September 2030 with a fixed rate of 4.50% for the first five years. After the expiration of the fixed rate period, the notes will reset quarterly at a variable rate equal to the then current three-month Secured Overnight Financing Rate (“SOFR”), as published by the Federal Reserve Bank of New York, plus 438 basis points. These notes pay interest semi-annually, are unsecured, and may be called by the Company at any time after the remaining maturity is five years or less. Additionally, these notes qualify for Tier 2 capital treatment, subject to regulatory limitations.

As of June 30, 2024, the total amount of subordinated notes outstanding was $64.1 million less approximately $232 thousand of remaining debt issuance costs for a total balance of $63.9 million. As of December 31, 2023, the total amount of subordinated notes outstanding was $64.1 million less approximately $325 thousand of remaining debt issuance costs for a total balance of $63.8 million.

Notes Payable and Other Borrowings

As of June 30, 2024 and December 31, 2023, City Bank had no outstanding advances from the Federal Home Loan Bank of Dallas (“FHLB”).