Note 11 - Subordinated Debentures and Other Borrowings

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

(11) Subordinated Debentures and Other Borrowings

As a result of its acquisition of Commonwealth Bancshares, Inc. on March 7, 2022, Bancorp became the 100% successor owner of the following unconsolidated trust subsidiaries: Commonwealth Statutory Trust III, Commonwealth Statutory Trust IV and Commonwealth Statutory Trust V. The sole assets of the trust subsidiaries represent the proceeds of offerings loaned in exchange for subordinated debentures with similar terms to the TPS. The TPS are treated as part of Tier I Capital. The subordinated note and related interest expense are included in Bancorp’s consolidated financial statements. The subordinated notes are currently redeemable at Bancorp’s option on a quarterly basis. Bancorp chose not to redeem the subordinated notes on April 1, 2022 and carried the note at the costs noted below at March 31, 2022.

(in thousands)	Commonwealth Statutory Trust III		Commonwealth Statutory Trust IV		Commonwealth Statutory Trust V		Total
Trust preferred securities	$	3,005	$	12,021	$	11,019	$	26,045
Subordinated debentures		3,000		12,000		11,000		26,000
Origination date	12/19/2003		12/15/2005		6/28/2007
Index	LIBOR + 2.85%		LIBOR + 1.35%		LIBOR + 1.40%

Bancorp is a member of the FHLB of Cincinnati. As a member of the FHLB, Bancorp has access to credit products of the FHLB. Bancorp views these borrowings as a potential low cost alternative to brokered deposits. At March 31, 2022 and December 31, 2021, available credit from the FHLB totaled $1.02 billion and $1.00 billion, respectively. Bancorp also had unsecured available FFP lines with correspondent banks totaling $100 million and $80 million at March 31, 2022 and December 31, 2021, respectively. In addition, Bancorp had borrowing capacity of $20 million available through an unsecured borrowing line of the holding company as of March 31, 2022, which was added during the first quarter to allow capital flexibility at the Bank level.