SUBORDINATED DEBT

3 Months Ended

Mar. 31, 2024

Federal Home Loan Banks [Abstract]

SUBORDINATED DEBT

SUBORDINATED DEBT

On November 8, 2021, the Company completed a public offering of $85.0 million of aggregated principal amount of 3.25% Fixed-to-Floating Rate subordinated notes due 2031 (the "Notes"). The fixed rate period is defined from and including November 8, 2021 to, but excluding, November 15, 2026, or the date of earlier redemption. The floating rate period is defined from and including November 15, 2026 to, but excluding, November 15, 2031, or the date of earlier redemption. The floating rate per annum is equal to three-month term SOFR (the "benchmark rate") plus a spread of 230 basis points for each quarterly interest period during the floating rate period, provided however, that if the benchmark rate is less than zero, the benchmark rate shall be deemed to be zero. The subordinated notes will mature on November 15, 2031.

The Company may, at its option, beginning with the interest payment date of November 15, 2026, and on any interest payment date thereafter, redeem the Notes, in whole or in part, from time to time, subject to obtaining prior approval of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") to the extent such approval is then required under the capital adequacy rules of the Federal Reserve Board, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest to, but excluding, the date of redemption.

Interest expense on subordinated debt for the three months ended March 31, 2024 and 2023 was $0.6 million and $0.6 million, respectively.

During the three months ended March 31, 2024 the Company did not repurchase any subordinated notes. During the three months ended March 31, 2023, the Company repurchased subordinated notes with a par value of $4.0 million for cash paid of $3.2 million, respectively.

Gains on repurchases of subordinated debt for the three months ended March 31, 2024 and 2023 were zero and $0.8 million, respectively, and are recorded in Non-interest income - other on the consolidated statements of income.