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Long-Term Borrowings | 9 Months Ended
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Sep. 30, 2023
Debt Disclosure [Abstract] |
Long-term Borrowings | Long-term borrowings: There were no long-term advances from the FHLB at September 30, 2023 or at December 31, 2022. The Bank’s long-term and short-term FHLB advances are secured by a blanket pledge of residential mortgage, commercial real estate, and multi-family loans totaling $1.6 billion at September 30, 2023 and $1.2 billion at December 31, 2022, respectively. Based on this collateral, the Bank is eligible to borrow an additional $892.6 million at September 30, 2023. In November 2021, the Company completed the issuance of $75.0 million aggregate principal amount, fixed-to-floating rate subordinated notes due December 15, 2031, in a private offering exempt from the registration requirements under the Securities Act of 1933, as amended. The notes carry a fixed rate of 3.125% for five years at which time they will convert to a floating rate based on the three-month term secured overnight funding rate ("SOFR"), plus a spread of 220 basis points. The Company may, at its option, beginning December 15, 2026, redeem the notes, in whole or in part, from time to time, subject to certain conditions. The net proceeds from the sale were approximately $73.8 million, after deducting the offering expenses. The Company’s intent was to use the proceeds from the sale for general corporate purposes, which may include, without limitation, providing capital to support its growth organically or through acquisitions, in financing investments, capital expenditures, repurchasing its common shares and for investments in the Bank as regulatory capital. The subordinated debentures are included in Total Capital under current regulatory guidelines and interpretations. On November 1, 2021, the Company completed its acquisition of Cortland, which included the assumption of Floating Rate Junior Subordinated Debt Securities due in September 15, 2037 (the "junior subordinated debt securities") at an acquisition-date fair value of $4.3 million, held in a wholly-owned statutory trust whose common securities were wholly-owned by Cortland. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.45% over the 3-month term SOFR (Secured Overnight Financing Rate) . The transition to the 3-month term SOFR from the 3-month term LIBOR rate was effective September 15, 2023 with the cessation of the LIBOR rate. The rate at September 30, 2023 was 7.12% and at December 31, 2022 was 6.22%. On January 7, 2020, the Company completed its acquisition of Maple Leaf, which included the assumption of Floating Rate Junior Subordinated Debt Securities due December 15, 2036 (the "junior subordinated debt securities") held in a wholly-owned statutory trust whose common securities were wholly-owned by Maple Leaf. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.80% over the 3-month term SOFR (Secured Overnight Financing Rate). The transition to the 3-month term SOFR from the 3-month term LIBOR rate was effective September 15, 2023 with the cessation of LIBOR rate. The rate at September 30, 2023 was 7.47% and at December 31, 2022 was 6.57%. In 2015, the Company completed its acquisition of National Bancshares Corporation, which included the assumption of Floating Rate Junior Subordinated Debt Securities due June 15, 2035 (the "junior subordinated debt securities") held in a wholly-owned statutory trust, TSEO Statutory Trust I. The sole assets of the statutory trust are the junior subordinated debt securities and related payments. The junior subordinated debt securities and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee of the obligations of the statutory trust under the capital securities held by third-party investors. The securities bear interest at a rate of 1.70% over the 3-month term SOFR (Secured Overnight Financing Rate). The transition to the 3-month term SOFR from the 3-month term LIBOR rate was effective September 15, 2023 with the cessation of LIBOR rate. The rate at September 30, 2023 was 7.37% and at December 31, 2022 was 6.47%. In all three instances, the Company may redeem the junior subordinated debentures at any quarter-end, in whole, or in part, at par. This type of subordinated debenture qualifies as Tier 1 capital for regulatory purposes in determining and evaluating the Company’s capital adequacy. A summary of all junior subordinated debentures issued by the Company to affiliates and subordinated debentures follows. For the junior subordinated debentures, these amounts represent the par value of the obligations owed to these affiliates, including the Company’s equity interest in the trusts along with any unamortized fair value marks. For the subordinated debentures, these amounts represent the par value less the remaining deferred offering expense associated with the issuance of the debentures.
|  | September 30, 2023 |  |  | December 31, 2022 |
|  | Amount |  |  | Amount |
TSEO Statutory Trust I |  | $ | 2,509 |  |  | $ | 2,472 |
Maple Leaf Financial Statutory Trust II |  |  | 7,684 |  |  |  | 7,517 |
Cortland Statutory Trust I |  |  | 4,368 |  |  |  | 4,327 |
Total junior subordinated debentures owed to unconsolidated subsidiary trusts |  | $ | 14,561 |  |  | $ | 14,316 |
Subordinated Debentures |  | $ | 73,989 |  |  | $ | 73,895 |
Total long-term borrowings |  | $ | 88,550 |  |  | $ | 88,211 |

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