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Subordinated Notes and Junior Subordinated Debentures | 9 Months Ended
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Sep. 30, 2020
Debt Disclosure [Abstract] |
Subordinated Notes and Junior Subordinated Debentures | Note 13—Subordinated Notes and Junior Subordinated Debentures On June 26, 2020, the Company issued $50.0 million in 6.00% fixed-to-floating subordinated notes that mature on July 1, 2030. On August 3, 2020, the Company issued an additional $25.0 million as part of the same series of notes as the $50.0 million issued on June 26, 2020. The subordinated notes bear a fixed interest rate of 6.00% until July 1, 2025 and a floating interest rate equal to a benchmark rate, which is expected to be three-month Secured Overnight Financing Rate plus 588 basis points thereafter until maturity. These transactions resulted in debt issuance costs of approximately $1.7 million that will be amortized over 10 years. As of September 30, 2020, the net liability outstanding of the subordinated notes was $73.3 million The Company may, at its option, redeem the notes, in whole or in part, on a semi-annual basis beginning on July 1, 2025, subject to obtaining the prior approval of the Federal Reserve to the extent such approval is then required. The subordinated notes are intended to qualify as Tier 2 capital for regulatory capital purposes At September 30, 2020 and December 31, 2019, the Company’s junior subordinated debentures by issuance were as follows:
Name of Trust |  | Aggregate Principal Amount September 30, 2020 |  |  | Aggregate Principal Amount December 31, 2019 |  |  | Stated Maturity |  | Contractual Rate at September 30, 2020 |  |  | Interest Rate Spread
Metropolitan Statutory Trust 1 |  | $ | 35,000 |  |  | $ | 35,000 |  |  | March 17, 2034 |  |  | 3.03 | % |  | Three-month LIBOR + 2.79%
RidgeStone Capital Trust I |  |  | — |  |  |  | 1,500 |  |  | June 30, 2033 |  | n/a |  |  | Five-year LIBOR + 3.50%
First Evanston Bancorp Trust I |  |  | 10,000 |  |  |  | 10,000 |  |  | March 15, 2035 |  |  | 2.03 | % |  | Three-month LIBOR + 1.78%
Total liability, at par |  |  | 45,000 |  |  |  | 46,500 |  |  |  |  |  |  |  |  |
Discount |  |  | (8,669 | ) |  |  | (9,166 | ) |  |  |  |  |  |  |  |
Total liability, at carrying value |  | $ | 36,331 |  |  | $ | 37,334 |  |  |  |  |  |  |  |  |
In 2004, the Company’s predecessor, Metropolitan Bank Group, Inc., issued $35.0 million floating rate junior subordinated debentures to Metropolitan Statutory Trust 1, which was formed for the issuance of trust preferred securities. The debentures bear interest at three-month LIBOR plus 2.79% (3.03% and 4.69% at September 30, 2020 and December 31, 2019, respectively). Interest is payable quarterly. The Company has the right to redeem the debentures, in whole or in part, on any interest payment date on or after March 2009. Accrued interest payable was $43,000 and $71,000 as of September 30, 2020 and December 31, 2019, respectively. As part of the Ridgestone acquisition, the Company assumed the obligations to RidgeStone Capital Trust I of $1.5 million in principal amount, which was formed for the issuance of trust preferred securities. Beginning on June 30, 2008, the interest rate reset to the five-year LIBOR plus 3.50% (6.38% at December 31, 2019), which was in effect until June 30, 2023 and updated every five years. Interest was paid on a quarterly basis. The Company had the right to redeem the debentures, in whole or in part, on any interest payment date on or after June 30, 2008. There was no accrued interest payable as of December 31, 2019. On February 25, 2020 the Company notified the trustee of RidgeStone Capital Trust I of its intent to redeem the debentures. On June 30, 2020, the Company redeemed the debentures, in whole and at the par value of $1.5 million and recognized a charge of $112,000 to non-interest income for the remaining discount. As part of the First Evanston acquisition, the Company assumed the obligations to First Evanston Bancorp Trust I of $10.0 million in principal amount, which was formed for the issuance of trust preferred securities. Beginning on March 15, 2010, the interest rate reset to the three-month LIBOR plus 1.78% (2.03% and 3.67% at September 30, 2020 and December 31, 2019, respectively), which is in effect until the debentures mature in 2035. Interest is paid on a quarterly basis. The Company has the right to redeem the debentures, in whole or in part, on any interest payment date on or after March 2010. The Company has the option to defer interest payments on the debentures from time to time for a period not to exceed five consecutive years. Accrued interest payable was $9,000 and $17,000 as of September 30, 2020 and December 31, 2019, respectively. The Trusts are not consolidated with the Company. Accordingly, the Company reports the subordinated debentures held by the Trusts as liabilities. The Company owns all of the common securities of each trust. The junior subordinated debentures qualify, and are treated as, Tier 1 regulatory capital of the Company subject to regulatory limitations. The trust preferred securities issued by each trust rank equally with the common securities in right of payment, except that if an event of default under the indenture governing the notes has occurred and is continuing, the preferred securities will rank senior to the common securities in right of payment.

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- Definition Subordinated notes and junior subordinated debt owed to unconsolidated subsidiary trust. + References No definition available. + Details
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