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BORROWING ARRANGEMENTS
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
BORROWING ARRANGEMENTS BORROWING ARRANGEMENTS
A summary of outstanding borrowings as of March 31, 2025 and December 31, 2024 follows:
(dollars in thousands)March 31,
2025		December 31,
2024
FHLB advances$— $— 
Subordinated notes70,308 69,725 
Total borrowings$70,308 $69,725 
Federal Home Loan Bank Secured Line of Credit
At March 31, 2025, the Company had a secured line of credit of $734.8 million from the FHLB, of which $687.8 million was available. This secured borrowing arrangement is collateralized under a blanket lien on qualifying real estate loans and is subject to the Company providing adequate collateral and continued compliance with the Advances and Security Agreement and other eligibility requirements established by the FHLB. At March 31, 2025, the Company had pledged $2.18 billion of qualifying loans with the FHLB under a blanket lien, of which an unpaid principal balance of $1.33 billion was considered as eligible collateral under this secured borrowing arrangement. In addition, at March 31, 2025, the Company used $47.0 million of its secured FHLB borrowing capacity by having the FHLB issue letters of credit to meet collateral requirements for deposits from the State of California and other public agencies.
There were no borrowings at March 31, 2025 and December 31, 2024.
Federal Reserve Bank Secured Line of Credit
At March 31, 2025, the Company had credit availability of $353.0 million at the Federal Reserve discount window to the extent of collateral pledged. At March 31, 2025, the Company had pledged held-to-maturity debt securities with an amortized cost of $53.2 million as collateral, and qualifying loans with an unpaid principal balance of $363.0 million as collateral through the Borrower-in-Custody (“BIC”) program. The Company also pledged available-for-sale debt securities with an amortized cost of $3.0 million as collateral for secured public deposits and for other purposes as required by law or contract provisions. The Company had no discount window borrowings at March 31, 2025 and December 31, 2024.
Federal Funds Unsecured Lines of Credit
At March 31, 2025, the Company had four overnight unsecured credit lines from correspondent banks totaling $90.5 million. The lines are subject to annual review. There were no outstanding borrowings under these lines at March 31, 2025 and December 31, 2024.
Fixed-to-Floating Rate Subordinated Notes
On May 28, 2020, the Company issued $18 million of 5.50% Fixed-to-Floating Rate Subordinated Notes Due 2030 (the “Notes”). The Notes mature March 25, 2030 and accrue interest at a fixed rate of 5.50% through the fixed-rate period to March 26, 2025, after which interest accrues at a floating rate of 90-day Secured Overnight Financing Rate (“SOFR”) plus 3.50%, until maturity, unless redeemed early, at the Company’s option, after the end of the fixed-rate period. Issuance costs of $475 thousand were incurred and are being amortized over the first 5-year fixed term of the Notes; unamortized issuance costs at March 31, 2025 and December 31, 2024, were $16 thousand and $40 thousand, respectively. The net unamortized issuance costs are netted against the balance and recorded in borrowings in the consolidated balance sheets. The amortization expense is recorded in interest expense in the consolidated statements of operations. At March 31, 2025, the Company was in compliance with all covenants and terms of the Notes.
In connection with the Merger, the Company assumed $20 million in subordinated debt, with a fixed interest rate of 5.00% and a stated maturity of September 30, 2030. Beginning September 30, 2025, the interest rate changes to a quarterly variable rate equal to the then current 90-day SOFR plus 4.88%, until maturity, unless redeemed early, at the Company’s option, after the end of the fixed-rate period. The subordinated debt was initially recognized with a fair value discount of $794 thousand. At March 31, 2025 and December 31, 2024, the net unamortized fair value discount was $340 thousand and $509 thousand, respectively, The net unamortized fair value discount is netted against the balance and recorded in borrowings in the consolidated balance sheets. The amortization of the fair value discount is recorded in interest expense in the consolidated statements of operations. At March 31, 2025, the Company was in compliance with all covenants and terms of these notes.
In addition and in connection with the Merger, the Company assumed an additional $35 million in subordinated debt, with a fixed interest rate of 3.50% and a stated maturity of September 1, 2031. Beginning August 17, 2026, the interest rate changes to a quarterly variable rate equal to the then current 90-day SOFR plus 2.86%, until maturity, unless redeemed early, at the Company’s option, after the end of the fixed-rate period. The subordinated debt was initially recognized with a fair value discount of $3.4 million. At March 31, 2025 and December 31, 2024, the net unamortized fair value discount was $2.3 million and $2.7 million, respectively. The net unamortized fair value discount is netted against the balance and recorded in borrowings in the consolidated balance sheets. The amortization of the fair value discount is recorded in interest expense in the consolidated statements of operations. At March 31, 2025, the Company was in compliance with all covenants and terms of these notes.