XML 27 R16.htm IDEA: XBRL DOCUMENT v3.25.3
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
8. SHORT-TERM BORROWINGS AND LONG-TERM DEBT

The following table presents the Company's long-term debt, which is based on original maturity and consists of advances under the arrangement with Federal Home Loan Bank of Des Moines, junior subordinated debentures and subordinated notes as of the dates presented. These borrowing agreements may include customary financial covenants, with which the Company was in compliance as of September 30, 2025.

(dollars in thousands)September 30, 2025December 31, 2024
Long-term debt:
Federal Home Loan Bank long-term advances$25,000 $50,000 
Junior subordinated debentures51,547 51,547 
Subordinated notes, net of unamortized debt issuance costs54,980 54,798 
Total$131,527 $156,345 
At September 30, 2025, future principal payments on long-term debt based on redemption date or final maturity are as follows. The $55.0 million in subordinated notes due in 2030 are callable quarterly beginning November 1, 2025.

(dollars in thousands)
Year Ending December 31,
2025 (remainder)$— 
2026— 
2027— 
202825,000 
2029— 
203055,000 
Thereafter51,547 
Total$131,547 

Federal Home Loan Bank Advances and Other Borrowings

The Bank is a member of the Federal Home Loan Bank of Des Moines (the "FHLB"). As of September 30, 2025, the Bank maintained a $1.59 billion line of credit, compared to $1.76 billion as of December 31, 2024. The undrawn amount under this arrangement was $1.47 billion as of September 30, 2025, compared to $1.63 billion as of December 31, 2024. There were no short-term borrowings outstanding under this arrangement as of September 30, 2025 and December 31, 2024.

As of September 30, 2025, there was a $25.0 million long-term advance under the FHLB arrangement bearing an interest rate of 4.02%. There were $50.0 million in long-term advances under the FHLB arrangement bearing interest rates between 4.02% and 4.62% as of December 31, 2024.

The FHLB also provides standby letters of credit on behalf of the Bank to secure certain public deposits. If the FHLB is required to make a payment under a standby letter of credit, the amount is converted to an advance. As of September 30, 2025, standby letters of credit under this arrangement totaled $95.6 million, compared to $83.6 million as of December 31, 2024. These letters of credit reduce the available borrowing capacity under the total line of credit, similar to outstanding advances.

In accordance with the collateral provisions of the Advances, Security and Deposit Agreement with the FHLB, the Bank pledged certain real estate loans with a carrying value of approximately $2.79 billion and $3.14 billion as of September 30, 2025 and December 31, 2024, respectively, as collateral for the FHLB advances and standby letters of credit.

The Bank also had access to the Federal Reserve Discount Window, with additional unused borrowing capacity of $209.2 million and $232.1 million as of September 30, 2025 and December 31, 2024, respectively. Certain commercial and commercial real estate loans with a par value totaling $100.1 million and $128.3 million as of September 30, 2025 and December 31, 2024, respectively, were pledged to the Federal Reserve as collateral on the line of credit. In addition, investment securities with a par value of $174.8 million and $184.3 million as of September 30, 2025 and December 31, 2024, respectively, were pledged to the Federal Reserve in support of the line of credit. The Federal Reserve does not have the right to sell or repledge these assets.

Additionally, the Bank had unused unsecured credit lines with other lenders totaling $75.0 million that was available as of September 30, 2025 and December 31, 2024.
Junior Subordinated Debentures

The following table presents the Company's junior subordinated debentures outstanding, which are recorded in long-term debt on the Company's consolidated balance sheets as of the dates presented:

(dollars in thousands)
Name of TrustSeptember 30, 2025December 31, 2024Interest Rate
CPB Capital Trust IV$30,928 $30,928 
Three-month CME Term SOFR + tenor spread adjustment of 0.26% + 2.45%
CPB Statutory Trust V20,619 20,619 
Three-month CME Term SOFR + tenor spread adjustment of 0.26% + 1.87%
Total$51,547 $51,547 

In September 2004, the Company established CPB Capital Trust IV ("Trust IV"), a wholly-owned statutory trust. Trust IV issued $30.0 million in floating rate trust preferred securities, bearing interest at three-month LIBOR plus 2.45%, with a maturity date of December 15, 2034. The principal assets of Trust IV consist of $30.9 million in the Company's junior subordinated debentures, which carry identical interest rate and maturity terms. Trust IV issued $0.9 million in common securities to the Company.

In December 2004, the Company formed CPB Statutory Trust V ("Trust V"), another wholly-owned statutory trust. Trust V issued $20.0 million in floating rate trust preferred securities, bearing interest at three-month LIBOR plus 1.87%, also maturing on December 15, 2034. The principal assets of Trust V include $20.6 million in the Company's junior subordinated debentures, with matching interest rate and maturity terms. Trust V issued $0.6 million in common securities to the Company.

The Company is not considered the primary beneficiary of Trusts IV and V. Therefore, the trusts are not considered variable interest entities and are not consolidated in the Company's financial statements. Instead, the junior subordinated debentures are reported as liabilities on the Company's consolidated balance sheets, while the Company's investments in the common securities of the trusts are recorded under investment in unconsolidated entities in the Company's consolidated balance sheets.

The trust preferred securities, the junior subordinated debentures, and the common securities issued by Trusts IV and V are redeemable in whole or in part on any interest payment date, or in whole but not in part within 90 days following the occurrence of certain specified events. The Company provides a full and unconditional guarantee of each trust's obligations related to its trust preferred securities.

Subject to certain exceptions and limitations, the Company may elect to defer interest payments on the junior subordinated debentures for up to 20 consecutive quarterly periods without triggering default or penalty. This would result in a corresponding deferral of distribution payments on the related trust preferred securities.

Under applicable regulatory guidelines and interpretations, the junior subordinated debentures qualify for inclusion in Tier 1 capital, subject to certain limitations.

Subordinated Notes

The following table presents the Company's subordinated notes outstanding as of the dates presented:

(dollars in thousands)
DescriptionSeptember 30, 2025December 31, 2024Interest Rate
October 2020 Private Placement$55,000 $55,000 
4.75% for the first five years. Resets quarterly thereafter to the then current three-month SOFR plus 456 basis points. The subordinated notes are due in 2030 but are callable quarterly beginning on November 1, 2025.

On October 20, 2020, the Company completed a $55.0 million private placement of ten-year fixed-to-floating rate subordinated notes, intended to support regulatory capital ratios and for general corporate purposes. At the end of the fourth quarter of 2020, the Company exchanged the privately placed notes for registered notes with identical terms and aggregate principal amount.
The subordinated notes bear a fixed interest rate of 4.75% for the first five years, through but excluding November 1, 2025. Beginning November 1, 2025, the interest rate will reset quarterly to the then current three-month Secured Overnight Financing Rate ("SOFR"), as published by the Federal Reserve Bank of New York, plus 456 basis points. The subordinated notes are callable on any quarterly interest payment date on or after November 1, 2025. On September 11, 2025, the Company provided notice to the trustee of its plan for full redemption of the subordinated notes, at par, on November 1, 2025. Holders of the subordinated notes were subsequently notified on October 1, 2025.

Under current regulatory guidelines and interpretations, the subordinated notes qualify for inclusion in Tier 2 capital, subject to certain applicable limitations.

As of September 30, 2025, the subordinated notes had a carrying value of $55.0 million, net of unamortized debt issuance costs of $20 thousand, compared to a carrying value of $54.8 million and $0.2 million in unamortized debt issuance costs as of December 31, 2024.