Note 9 - Long-term Debt

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Long-Term Debt [Text Block]

NOTE 9 - LONG-TERM DEBT

In  November 2018, the Company issued $55 million of 6.18% fixed-to-floating rate subordinated notes, due  December 1, 2028 (the “2028 Subordinated Notes”). The interest rate is fixed through  December 1, 2023 and floats at three-month CME Term SOFR plus applicable tenor spread adjustment of 26 basis points plus 315 basis points thereafter. The Company can redeem the 2028 Subordinated Notes beginning  December 1, 2023. The 2028 Subordinated Notes are considered Tier 2 capital at the Company. The Company contributed $25 million to the Bank as Tier 1 capital. On December 1, 2023, the Company intends to redeem the 2028 Subordinated Notes at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to but excluding December 1, 2023.

In March 2021, the Company issued $120 million of 4.00% fixed-to-floating rate subordinated notes, due April 1, 2031 (the “2031 Subordinated Notes”). The interest rate is fixed through April 1, 2026 and floats at three month SOFR plus 329 basis points thereafter. The Company can redeem the 2031 Subordinated Notes beginning April 1, 2026. The 2031 Subordinated Notes are considered Tier 2 capital at the Company. 

At September 30, 2023 and December 31, 2022, long-term debt was as follows:

	September 30, 2023				December 31, 2022
(dollars in thousands)	Principal		Unamortized debt issuance costs		Principal		Unamortized debt issuance costs
2028 Subordinated Notes (1)	$	55,000	$	33	$	55,000	$	180
2031 Subordinated Notes		120,000		948		120,000		1,235
Total	$	175,000	$	981	$	175,000	$	1,415

(1) The Company intends to redeem the 2028 Subordinated Notes on December 1, 2023.

The following table presents interest and amortization expense the Company incurred for the three and nine months ended September 30, 2023 and 2022:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Interest Expense:
Interest	$	2,050	$	2,050	$	6,149	$	6,149
Amortization		145		145		434		434