Note 14 - Junior Subordinated Debentures

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Capital Requirements on Trust Assets [Text Block]

NOTE

14

. JUNIOR SUBORDINATED DEBENTURES

As of

December

31,

2016

and

2015,

the Company had

one

wholly-owned trust formed in

2005

to issue trust preferred securities and related common securities. The following table presents information about the Trust as of

December

31,

2016

and

2015.

(Amounts in thousands)
		Issued			Effective		Redemption
Trust Name	Issue Date	Amount		Rate (1)	Rate	Maturity Date	Date
Bank of Commerce Holdings Trust II	July 29, 2005	$	10,310	Floating (3)	(2)	September 15, 2035	(4)

(1)

Contractual interest rate of junior subordinated debentures.

(2)

Effective rate as of

December

31,

2016

and

2015

of

2.54%

and

1.92%,

respectively.

(3)

Rate based on

three

month LIBOR plus

1.58%

adjusted quarterly.

(4)

Redeemable at the Company’s option on any

March

15,

June

15,

September

15,

or

December

15.

The

$10.3

million of junior subordinated debentures issued to Trust II as of

December

31,

2016

and

2015,

are reflected in the

Consolidated Balance Sheets

. The common stock issued by Trust II in the amount of

$

310

thousand is recorded in other assets in the

Consolidated Balance Sheets

, at

December

31,

2016

and

2015.

All of the debentures issued to Trust II, less the common stock of Trust II, qualified as Tier

1

capital as of

December

31,

2016

and

2015,

under guidance issued by the Federal Reserve Board.

During the year ended

December

31,

2014,

the Holding Company redeemed all

$5.2

million of junior subordinated debentures from a separate wholly-owned trust formed in

2003.

The Holding Company received net cash payment of

$4.6

million resulting in a

$406

thousand gain on extinguishment of debt recorded in other income and a

$155

thousand reduction of the common stock investment in trusts.