BORROWINGS	12 Months Ended
Dec. 31, 2020
BORROWINGS
BORROWINGS	NOTE 8 — BORROWINGS FHLB Advances: The Bank had no borrowings from the FHLB at December 31, 2020. The Bank had $144.0 million of FHLB borrowings at December 31, 2019, which matured during the year ended December 31, 2020 and had a fixed rate at rates from 1.86% to 2.09%, with a weighted average of 2.02%. Each advance was payable at its maturity date, with a prepayment penalty for fixed rate advances. Advances are collateralized by mortgage loans under a blanket lien agreement in the amount of approximately $499.8 million and $437.8 million as of December 31, 2020 and 2019, respectively. Based on this collateral and the Company’s holdings of FHLB stock, the Company is eligible to borrow a total of approximately $499.8 million as of December 31, 2020. Trust Preferred Securities Payable: On December 7, 2005, the Company established MetBank Capital Trust I, a Delaware statutory trust (“Trust I”). The Company received all of the common stock of Trust I in exchange for contributed capital of $310,000. Trust I issued $10 million of preferred capital securities to investors in a private transaction and invested the proceeds, combined with the proceeds from the sale of Trust I’s common capital securities, in the Company through the purchase of $10.3 million aggregate principal amount of Floating Rate Junior Subordinated Debentures (the “Debentures”) issued by the Company. The Debentures, the sole assets of Trust I, mature on December 9, 2035 and bear interest then at a floating rate of three-month LIBOR plus 1.85%. The Debentures are callable. The interest rates were 2.09% and 3.84% as of December 31, 2020 and 2019, respectively. On July 14, 2006, the Company established MetBank Capital Trust II, a Delaware statutory trust (“Trust II”). The Company received all of the common stock of Trust II in exchange for contributed capital of $310,000. Trust II issued $10 million of preferred capital securities to investors in a private transaction and invested the proceeds, combined with the proceeds from the sale of Trust II’s common capital securities, in the Company through the purchase of $10.3 million aggregate principal amount of Floating Rate Junior Subordinated Debentures (the “Debentures II”) issued by the Company. The Debentures II, the sole assets of Trust II, mature on October 7, 2036, and bear interest at a floating rate of three-month LIBOR plus 2.00%. The Debentures II are callable. The interest rates were 2.24% and 3.99% as of December 31, 2020 and 2019, respectively. The Company is not considered the primary beneficiary of these trusts; therefore, the trusts are not consolidated in the Company’s financial statements. Interest on the subordinated debentures may be deferred by the Company at any time or from time to time for a period not exceeding 20 consecutive quarterly payments (5 years), provided there is no event of default. At the end of the deferral period, the Company must pay accrued interest, at which point it may elect a new deferral period provided that no deferral may extend beyond maturity. The investments in the common stock of Trust I and Trust II are included in other assets on the consolidated statements of financial condition. The subordinated debentures may be included in Tier 1 capital (with certain applicable limitations) under current regulatory guidelines and interpretations. Subordinated Debt: On March 8, 2017, the Company issued $25 million of subordinated notes to accredited institutional investors. The notes mature on March 15, 2027 and bear an interest rate of 6.25% per annum. The interest is paid semi-annually on March 15 and September 15 of each year through March 15, 2022 and quarterly thereafter on March 15, June 15, September 15 and December 15 of each year. In accordance with the terms of the subordinated notes, the interest rate from March 15, 2022 to the maturity date resets quarterly to an interest rate per annum equal to the current three-month LIBOR (not less than zero) plus 426 basis points, payable quarterly in arrears. The Company may redeem the subordinated notes beginning with the interest payment date of March 15, 2022 and on any scheduled interest payment date thereafter. The subordinated notes may be redeemed in whole or in part, at a redemption price equal to 100% of the principal amount of the subordinated notes plus any accrued and unpaid interest. The terms of the trust preferred securities and subordinated debt may be impacted by the transition from LIBOR to an alternative U.S. dollar reference interest rate, potentially SOFR, in 2022. On November 30, 2020, announcement by LIBOR’s administrator, the ICE Benchmark Administration, signaled to the market that USD LIBOR for the most liquid maturities is now likely to continue to be published until June 30, 2023; however, no definitive announcement has been made on this delay. Management is currently evaluating the impact of the transition on the trust preferred securities payable.

BORROWINGS

12 Months Ended

Dec. 31, 2020

NOTE 8 — BORROWINGS

FHLB Advances: The Bank had no borrowings from the FHLB at December 31, 2020. The Bank had $144.0 million of FHLB borrowings at December 31, 2019, which matured during the year ended December 31, 2020 and had a fixed rate at rates from 1.86% to 2.09%, with a weighted average of 2.02%.

Each advance was payable at its maturity date, with a prepayment penalty for fixed rate advances. Advances are collateralized by mortgage loans under a blanket lien agreement in the amount of approximately $499.8 million and $437.8 million as of December 31, 2020 and 2019, respectively. Based on this collateral and the Company’s holdings of FHLB stock, the Company is eligible to borrow a total of approximately $499.8 million as of December 31, 2020.

Trust Preferred Securities Payable: On December 7, 2005, the Company established MetBank Capital Trust I, a Delaware statutory trust (“Trust I”). The Company received all of the common stock of Trust I in exchange for contributed capital of $310,000. Trust I issued $10 million of preferred capital securities to investors in a private transaction and invested the proceeds, combined with the proceeds from the sale of Trust I’s common capital securities, in the Company through the purchase of $10.3 million aggregate principal amount of Floating Rate Junior Subordinated Debentures (the “Debentures”) issued by the Company. The Debentures, the sole assets of Trust I, mature on December 9, 2035 and bear interest then at a floating rate of three-month LIBOR plus 1.85%. The Debentures are callable. The interest rates were 2.09% and 3.84% as of December 31, 2020 and 2019, respectively.

On July 14, 2006, the Company established MetBank Capital Trust II, a Delaware statutory trust (“Trust II”). The Company received all of the common stock of Trust II in exchange for contributed capital of $310,000. Trust II issued $10 million of preferred capital securities to investors in a private transaction and invested the proceeds, combined with the proceeds from the sale of Trust II’s common capital securities, in the Company through the purchase of $10.3 million aggregate principal amount of Floating Rate Junior Subordinated Debentures (the “Debentures II”) issued by the Company. The Debentures II, the sole assets of Trust II, mature on October 7, 2036, and bear interest at a floating rate of three-month LIBOR plus 2.00%. The Debentures II are callable. The interest rates were 2.24% and 3.99% as of December 31, 2020 and 2019, respectively.

The Company is not considered the primary beneficiary of these trusts; therefore, the trusts are not consolidated in the Company’s financial statements. Interest on the subordinated debentures may be deferred by the Company at any time or from time to time for a period not exceeding 20 consecutive quarterly payments (5 years), provided there is no event of default. At the end of the deferral period, the Company must pay accrued interest, at which point it may elect a new deferral period provided that no deferral may extend beyond maturity.

The investments in the common stock of Trust I and Trust II are included in other assets on the consolidated statements of financial condition. The subordinated debentures may be included in Tier 1 capital (with certain applicable limitations) under current regulatory guidelines and interpretations.

Subordinated Debt: On March 8, 2017, the Company issued $25 million of subordinated notes to accredited institutional investors. The notes mature on March 15, 2027 and bear an interest rate of 6.25% per annum. The interest is paid semi-annually on March 15 and September 15 of each year through March 15, 2022 and quarterly thereafter on March 15, June 15, September 15 and December 15 of each year.

In accordance with the terms of the subordinated notes, the interest rate from March 15, 2022 to the maturity date resets quarterly to an interest rate per annum equal to the current three-month LIBOR (not less than zero) plus 426 basis points, payable quarterly in arrears.

The Company may redeem the subordinated notes beginning with the interest payment date of March 15, 2022 and on any scheduled interest payment date thereafter. The subordinated notes may be redeemed in whole or in part, at a redemption price equal to 100% of the principal amount of the subordinated notes plus any accrued and unpaid interest.

The terms of the trust preferred securities and subordinated debt may be impacted by the transition from LIBOR to an alternative U.S. dollar reference interest rate, potentially SOFR, in 2022. On November 30, 2020, announcement by LIBOR’s administrator, the ICE Benchmark Administration, signaled to the market that USD LIBOR for the most liquid maturities is now likely to continue to be published until June 30, 2023; however, no definitive announcement has been made on this delay. Management is currently evaluating the impact of the transition on the trust preferred securities payable.