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SHORT-TERM BORROWINGS AND LONG-TERM DEBT
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
10. SHORT-TERM BORROWINGS AND LONG-TERM DEBT

The Bank is a member of the FHLB. As of December 31, 2025, the Bank maintained a $1.80 billion line of credit, compared to $1.76 billion at December 31, 2024. The undrawn amount under this arrangement was $1.68 billion as of December 31, 2025, compared to $1.63 billion as of December 31, 2024.

In accordance with the collateral provisions of the Advances, Pledge and Security Agreement with the FHLB, the Bank pledged certain real estate loans with a carrying value of $2.76 billion and $3.14 billion as of December 31, 2025 and 2024, respectively, as collateral for the FHLB advances available of $1.68 billion and $1.63 billion at December 31, 2025 and 2024, respectively. There were no short-term borrowings outstanding under this arrangement at December 31, 2025 and 2024.

The FHLB also provides standby letters of credit on behalf of the Bank to secure certain public deposits. If the FHLB is required to make a payment on a standby letter of credit, the amount is converted to an advance at the FHLB. Standby letters of credit issued on our behalf by the FHLB totaled $95.6 million and $83.6 million as of December 31, 2025 and 2024, respectively. The letters of credit are counted against the total line of credit, the same as the current outstanding debt, to determine the undrawn or total available line of credit.

The Bank also had access to the Federal Reserve discount window, with additional unused borrowings available of $206.4 million and $232.1 million as of December 31, 2025 and 2024, respectively. Certain commercial real estate and commercial and industrial loans with carrying values totaling $98.9 million and $128.3 million as of December 31, 2025 and 2024, respectively, were pledged as collateral on the line of credit with the Federal Reserve discount window. In addition, investment securities with a par value of $172.0 million and $184.3 million as of December 31, 2025 and 2024, respectively, were pledged to the Federal Reserve in support of the line of credit. The Federal Reserve does not have the right to sell or repledge these loans and investment securities.
Additionally, the Bank had unused unsecured credit lines with other lenders totaling $75.0 million that was available as of December 31, 2025 and 2024.

Interest expense on short-term borrowings totaled less than $1 thousand in 2025 and 2024 and $1.1 million in 2023.

A summary of the Bank's short-term borrowings as of December 31, 2025, 2024 and 2023 is as follows:

Year Ended December 31,
(Dollars in thousands)202520242023
Amount outstanding at December 31,$— $— $— 
Average amount outstanding during year— 17 23,322 
Highest month-end balance during year— 6,000 100,000 
Weighted-average interest rate on balances outstanding at December 31,— %— %— %
Weighted-average interest rate during year— %5.58 %4.88 %
Long-term debt, which is based on original maturity, consisted of FHLB advances, subordinated notes and debentures totaling $76.5 million and $156.3 million at December 31, 2025 and 2024, respectively.

December 31,
(Dollars in thousands)20252024
FHLB advances$25,000 $50,000 
Subordinated debentures51,547 51,547 
Subordinated notes, net of unamortized debt issuance costs of $0 and $202
— 54,798 
Total$76,547 $156,345 

At December 31, 2025, future principal payments on long-term debt based on redemption date or final maturity are as follows:

(Dollars in thousands)
Year Ending December 31:
2026$— 
2027— 
202825,000 
2029— 
2030— 
Thereafter51,547 
Total$76,547 

FHLB Advances

The Bank had $25.0 million and $50.0 million in FHLB long-term advances outstanding as of December 31, 2025 and 2024, respectively. Interest expense on FHLB long-term advances was $1.3 million,. $2.2 million, and $1.9 million in 2025, 2024, and 2023, respectively.

Junior Subordinated Debentures

The Company had the following junior subordinated debentures outstanding as of December 31, 2025 and 2024:
(Dollars in thousands)
Outstanding
Current Interest Rate
Trust IV$30,928 
Three-month CME Term SOFR + tenor spread adjustment of 0.26% + 2.45%
Trust V20,619 
Three-month CME Term SOFR + tenor spread adjustment of 0.26% + 1.87%
Total$51,547 
In September 2004, the Company established CPB Capital Trust IV ("Trust IV"), a wholly-owned statutory trust. Trust IV issued $30.0 million in floating rate trust preferred securities, originally bearing interest at three-month LIBOR plus 2.45%, with a maturity date of December 15, 2034. The principal assets of Trust IV consist of $30.9 million in the Company's junior subordinated debentures, which carry identical interest rate and maturity terms. Trust IV issued $0.9 million in common securities to the Company.

In December 2004, the Company formed CPB Statutory Trust V ("Trust V"), another wholly-owned statutory trust. Trust V issued $20.0 million in floating rate trust preferred securities, originally bearing interest at three-month LIBOR plus 1.87%, with a maturity date of December 15, 2034. The principal assets of Trust V consist of $20.6 million in the Company's junior subordinated debentures, which carry identical interest rate and maturity terms. Trust V issued $0.6 million in common securities to the Company.

Following the cessation of LIBOR, the interest rate benchmark transitioned to three‑month CME Term Secured Overnight Financing Rate ("SOFR") plus a 0.26% tenor spread adjustment, in addition to the original contractual margin of 2.45% and 1.87% for Trust IV and Trust V, respectively.

The Company is not considered the primary beneficiary of Trusts IV and V. Therefore, the trusts are not considered variable interest entities and are not consolidated in the Company's financial statements. Instead, the junior subordinated debentures are reported as liabilities on the Company's consolidated balance sheets, while the Company's investments in the common securities of the trusts are recorded under investment in unconsolidated entities in the Company's consolidated balance sheets.

The trust preferred securities, the junior subordinated debentures, and the common securities issued by Trusts IV and V are redeemable in whole or in part on any interest payment date, or in whole but not in part within 90 days following the occurrence of certain specified events. The Company provides a full and unconditional guarantee of each trust's obligations related to its trust preferred securities.

Subject to certain exceptions and limitations, the Company may elect to defer interest payments on the junior subordinated debentures, for up to 20 consecutive quarterly periods without triggering default or penalty. This would result in a corresponding deferral of distribution payments on the related trust preferred securities.

Under applicable regulatory guidelines and interpretations, the junior subordinated debentures qualify for inclusion in Tier 1 capital, subject to certain limitations.

Subordinated Notes

The Company had the following subordinated notes outstanding as of the dates presented:

December 31,
(Dollars in thousands)20252024
October 2020 Private Placement$— $55,000 

On October 20, 2020, the Company completed a $55.0 million private placement of ten-year fixed-to-floating rate subordinated notes, intended to support regulatory capital ratios and for general corporate purposes. At the end of the fourth quarter of 2020, the Company exchanged the privately placed notes for registered notes with identical terms and aggregate principal amount.

The subordinated notes bore a fixed interest rate of 4.75% for the first five years, through but excluding November 1, 2025. Beginning November 1 2025, the interest rate would have reset quarterly to the then current three-month SOFR, as published by the Federal Reserve Bank of New York, plus 456 basis points. The subordinated notes were callable on any quarterly interest payment date on or after November 1, 2025. Under current regulatory guidelines and interpretations, the subordinated notes qualified for inclusion in Tier 2 capital.

On September 11, 2025, the Company provided notice to the trustee of its plan for full redemption of the subordinated notes, at par, on November 1, 2025. Holders of the subordinated notes were subsequently notified on October 1, 2025. The Company fully redeemed the subordinated notes at par on November 1, 2025. Accordingly, the subordinated notes had a carrying value of zero at December 31, 2025, compared to $54.8 million, net of unamortized debt issuance costs of $0.2 million at December 31, 2024.