Note 8 - Borrowings

3 Months Ended

Mar. 31, 2016

Note

Borrowings

ASU 2015-03,

“Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs

simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The Company adopted ASU 2015-03 as of the end of its fiscal year 2015, and applied its provisions retrospectively.

The following table presents information related to the Company’s borrowings for the periods ended March 31, 2016, December 31, 2015 and March 31, 2015.

(dollars in thousands)	March 31, 2016			December 31, 2015			March 31, 2015

Subordinated Notes, 5.75%	$	70,000		$	70,000		$	70,000
Subordinated Notes, 8.5%		-			-			9,300
Less: debt issurance costs		(1,042	)		(1,072	)		(1,165	)
Long-term borrowings	$	68,958		$	68,928		$	78,135

On August 5, 2014, the Company completed the sale of $70.0 million of its 5.75% subordinated notes, due September 1, 2024 (the “Notes”). The Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $68.8 million, which includes $1.2 million in deferred financing costs which is being amortized over the life of the Notes.

On August 30, 2010, the Company entered into and consummated a Note Exchange Agreement, pursuant to which the Company issued, on a private placement basis, to eight parties, all of which are current or former directors of the Company or accounts for the benefit of such persons, an aggregate of $9.3 million of a new series of subordinated notes. During 2015, the Company redeemed the remaining balance of $9.3 million of subordinated notes, due 2021.