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Borrowings | 3 Months Ended
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Mar. 31, 2023
Borrowings |
Borrowings | Note 7 – Borrowings ​ The following table is a summary of borrowings as of March 31, 2023, and December 31, 2022. Junior subordinated debentures are discussed in more detail in Note 8. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 2023 |  | December 31, 2022 |
Securities sold under repurchase agreements | ​ | $ | 27,897 | ​ | $ | 32,156 | ​
Other short-term borrowings | ​ | ​ | 315,000 | ​ | ​ | 90,000 | ​
Junior subordinated debentures | ​ | ​ | 25,773 | ​ | ​ | 25,773 | ​
Subordinated debentures | ​ | ​ | 59,318 | ​ | ​ | 59,297 | ​
Senior notes | ​ | ​ | 44,611 | ​ | ​ | 44,585 | ​
Notes payable and other borrowings | ​ | ​ | - | ​ | ​ | 9,000 | ​
Total borrowings | ​ | $ | 472,599 | ​ | $ | 260,811 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ The Company enters into deposit sweep transactions where the transaction amounts are secured by pledged securities. These transactions consistently mature overnight from the transaction date and are governed by sweep repurchase agreements. All sweep repurchase agreements are treated as financings secured by U.S. government agencies and collateralized mortgage-backed securities, and had a carrying amount of $27.9 million at March 31, 2023, and $32.2 million at December 31, 2022. The fair value of the pledged collateral was $65.9 million at March 31, 2023, and $71.4 million at December 31, 2022. At March 31, 2023, there were no customers with secured balances exceeding 10% of stockholders’ equity. ​ The Company’s borrowings at the FHLBC require the Bank to be a member and invest in the stock of the FHLBC. Total borrowings are generally limited to the lower of 35% of total assets or 60% of the book value of certain mortgage loans. As of March 31, 2023, the Bank had $315.0 million in short-term advances outstanding under the FHLBC. There were $90.0 million in short-term advances as of December 31, 2022. The Bank assumed $23.4 million of long-term FHLBC advances with our ABC Bank acquisition in 2018, which were recorded in notes payable and other borrowings. The remaining balance of $5.9 million was paid off in full during the second quarter of 2022. FHLBC stock held at March 31, 2023 was valued at $15.3 million, and any potential FHLBC advances were collateralized by loans with a principal balance of $1.50 billion, which carried a FHLBC-calculated combined collateral value of $1.06 billion. The Company had excess collateral of $743.6 million available to secure borrowings at March 31, 2023. ​ In the second quarter of 2021, we issued $60.0 million in aggregate principal amount of our 3.50% Fixed-to-Floating Rate Subordinated Notes due April 15, 2031 (the “Notes”). The Notes were offered and sold to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended and the provisions of Regulation D promulgated thereunder. The Company used the net proceeds from the offering for general corporate purposes. The Notes bear interest at a fixed annual rate of 3.50%, from and including the date of issuance to but excluding April 15, 2026, payable semi-annually in arrears. From and including April 15, 2026 to, but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an interest rate per annum equal to Three-Month Term SOFR (as defined by the Note) plus 273 basis points, payable quarterly in arrears. As of March 31, 2023 and December 31, 2022, we had $59.3 million of subordinated debentures outstanding, net of deferred issuance costs. ​ The Company also had $44.6 million of senior notes outstanding, net of deferred issuance costs, as of March 31, 2023 and December 31, 2022. The senior notes were issued in December 2016 with a ten-year maturity, and terms include interest payable semiannually at 5.75% for five years. Beginning December 31, 2021, the senior debt began to pay interest at a floating rate, with interest payable quarterly at three month LIBOR plus 385 basis points. The interest rate at March 31, 2023 and December 31, 2022 was 9.01% and 8.62%, respectively. The notes are redeemable, in whole or in part, at the option of the Company, beginning with the interest payment date on December 31, 2021, and on any floating rate interest payment date thereafter, at a redemption price equal to 100% of the principal amount of the notes plus accrued and unpaid interest. As of March 31, 2023, and December 31, 2022, unamortized debt issuance costs related to the senior notes were $389,000 and $415,000, respectively, and are included as a reduction of the balance of the senior notes on the Consolidated Balance Sheets. These deferred issuance costs will be amortized to interest expense over the ten-year term of the notes and are included in the Consolidated Statements of Income. ​ On February 24, 2020, the Company originated a $20.0 million three-year term note with a correspondent bank. The term note was issued at one-month LIBOR plus 175 basis points, and required principal payments quarterly and interest payments monthly. This note was included within Notes Payable and Other Borrowings on the Consolidated Balance Sheets, and the remaining $9.0 million balance of the note was paid off as of February 24, 2023. The Company also has an undrawn line of credit of $30.0 million with a correspondent bank to be used for short-term funding needs; advances under this line can be outstanding up to 360 days from the date of issuance. This line of credit has not been utilized since early 2019.

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