Note 8. Long-Term Debt

Effective January 1, 2016, the Company retrospectively adopted accounting guidance intended to simplify the presentation of debt issuance costs by requiring that costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Historically, debt issuance costs were reported in the “Other Assets” line items in the Consolidated Balance Sheets and Statements of Cash Flows. All historical periods have been restated to reflect the revised presentation and new required disclosures are reflected below. The adoption of this guidance did not have a material impact on the Company’s financial condition or operation results.

Long-term debt consisted of the following.



	December 31,
(in thousands)	2016		2015
Subordinated notes payable, maturing June 2045	$	150,000	$	150,000
Subordinated notes payable, maturing April 2017		95,511		98,011
Term note payable, maturing December 2018		107,100		125,000
Other long-term debt		89,196		122,988
Less unamortized debt issuance costs		(5,527)		(5,854)
Total long-term debt	$	436,280	$	490,145


				Unamortized
				Debt
				Issuance
(in thousands)		Principal		Costs
Subordinated notes payable, maturing June 2045	$	150,000	$	4,956
Subordinated notes payable, maturing April 2017		95,511		—
Term note payable, maturing December 2018		107,100		571
Other long-term debt		89,196		—
Total	$	441,807	$	5,527

On March 9, 2015, the Company completed the issuance of subordinated notes payable with an aggregate principal amount of $150 million, maturing on June 15, 2045. These notes accrue interest at a fixed rate of 5.95% per annum, with quarterly interest payments which began in June 2015. Subject to prior approval by the Federal Reserve, the Company may redeem the notes in whole or in part on any interest payment date on or after June 15, 2020. This debt qualifies as Tier 2 capital in the calculation of certain regulatory capital ratios.

The subordinated notes payable maturing April 2017 accrue interest at a fixed rate of 5.875% per annum. As of December 31, 2015, 20% of the balance of these notes qualified as Tier 2 capital in the calculation of certain regulatory capital ratios. The notes no longer qualified as Tier 2 capital as of April 1, 2016.

On December 18, 2015, the Company entered into a senior unsecured single-draw term loan facility totaling $125 million, all of which was borrowed on the closing date. Amounts borrowed under the loan facility bear interest at a variable rate based on LIBOR plus 1.50% per annum. The loan agreement requires quarterly principal payments of $4.5 million, and outstanding borrowings may be prepaid in whole or in part at any time prior to the December 18, 2018 maturity date without premium or penalty, subject to reimbursement of certain lenders’ costs.

The Company must satisfy certain financial covenants on the term note payable and is subject to other restrictions customary in financings, none of which are expected to adversely impact the operations of the Company. Financial covenants cover, among other things, the maintenance of minimum levels for regulatory capital ratios, consolidated net worth, consolidated return on assets, and holding company liquidity and dividend capacity, and specify a maximum ratio of consolidated nonperforming assets to consolidated total loans and other real estate, calculated without FDIC-covered assets. The Company was in compliance with all covenants as of December 31, 2016.

Substantially all of the other long-term debt consists of borrowings associated with tax credit fund activities. Although these borrowings have indicated maturities through 2053, they are expected to be paid off at the end of the seven-year compliance period for the related tax credit investments.