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Subordinated Debentures | 12 Months Ended
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Dec. 31, 2020
Brokers and Dealers [Abstract] |
Subordinated Debentures | Subordinated Debentures As part of the July 31, 2020 acquisition of SB One, the Company assumed subordinated debentures with a total outstanding balance of $27.9 million and a net fair value of $25.1 million. The outstanding balance consisted of $12.9 million of subordinated deferrable interest debentures sold by the former SB One Bancorp to Sussex Capital Trust II (the “Trust”) and $15 million of private placement of fixed to-floating rate subordinated notes to an institutional investor. Sussex Capital Trust II, a non-consolidated subsidiary of the Company acquired as part of the SB One acquisition and a Delaware statutory business trust established on June 28, 2007, issued $12.5 million of variable rate capital trust pass-through securities to investors. Concurrently, the Trust purchased $12.9 million of variable rate subordinated deferrable interest debentures from the former SB One Bancorp and issued $387,000 of Common Securities in consideration for payment of the assets of the Trust in the same amount. The subordinated debentures are the sole asset of the Trust and their terms are the same as the terms of the capital securities. The Company has also fully and unconditionally guaranteed the obligations of the Trust under the capital securities. The interest rate is based on the three-month LIBOR plus 144 basis points and adjusts quarterly. The rate at December 31, 2020 was 1.66%. The capital trust pass-through securities are currently redeemable by the Company at par in whole or in part. These capital trust pass-through securities must be redeemed upon final maturity on September 15, 2037. The proceeds of these trust preferred securities, which have been contributed to the Bank, are included in the Bank’s capital ratio calculations and treated as Tier I capital. In accordance with FASB ASC 810, Consolidation, Sussex Capital Trust II, is not included in our consolidated financial statements. For regulatory reporting purposes, capital trust pass-through securities qualify as Tier I capital subject to specified limitations. As part of the acquisition of SB One, the Company assumed a $15.0 million private placement of fixed to-floating rate subordinated notes to an institutional investor on December 22, 2016. The subordinated notes have a maturity date of December 22, 2026 and bear interest at the rate of 5.75% per annum, payable quarterly, for the first five years of the term, and then at a variable rate that will reset quarterly to a level equal to the then current 3-month LIBOR plus 350 basis points over the remainder of the term. Subordinated debentures at December 31, 2020 totaled 25.1 million, while interest expense on these subordinated debentures for the year ended December 31, 2020 totaled $512,000.

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- Definition The entire disclosure for borrowings under subordinated debt agreements that qualify as available in computing net capital under SEC's uniform net capital rule, including restrictive covenants, collateral, interest rates and due dates, amounts due by date and amount owed in total. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 470 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6479118&loc=d3e64650-112822 + Details
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