SUBORDINATED DEBENTURES

12 Months Ended

Dec. 31, 2019

SUBORDINATED DEBENTURES

SUBORDINATED DEBENTURES

13.SUBORDINATED DEBENTURES

On August 30, 2018, the Company issued $35.0 million in fixed-to-floating rate subordinated notes due 2028 (the “Notes”) in a private placement transaction to institutional accredited investors. The Notes bear interest at annual fixed rate of 5.625% until September 1, 2023 at which time the interest rate resets quarterly to an interest rate per annum equal to the three–month LIBOR plus 278 basis points. Interest is payable semi-annually on March 1 and September 1 each year through September 1, 2023 and quarterly thereafter. The Notes can be redeemed partially or in whole, prior to the maturity date beginning September 1, 2023 and on any scheduled interest payment date thereafter, at par.  The Notes are carried on the Consolidated Balance Sheets net of unamortized issuance costs of $1.1 million and $1.2 million at December 31, 2019 and 2018, respectively, which are being amortized over the period to maturity date using the interest method. At December 31, 2019 and 2018, the Notes qualified as Tier 2 capital for regulatory capital purposes.