v3.19.1

Borrowed Funds | 12 Months Ended
--- | ---
Dec. 31, 2018
Debt Disclosure [Abstract] |
Borrowed Funds | As of December 31, 2018 and 2017, the Company was indebted as follows.
Borrowed Funds |  |  |  |  |  |  |  |
|  | 2018 |  | 2017
(dollars in thousands) |  | Balance |  | Interest |  | Balance |  | Interest
Pacific Coast Bankers Bank |  | 2,000 |  |  | 3.28 | % |  | — |  |  | — | %
Total - Federal funds purchased |  | $ | 2,000 |  |  |  |  | — |  |  |
FHLB advance due March 25, 2019 |  | $ | 2,000 |  |  | 4.26 | % |  | $ | 2,000 |  |  | 4.26 | %
Total - FHLB advances |  | $ | 2,000 |  |  |  |  | $ | 2,000 |  |  |  |
Senior promissory note due July 31, 2019 |  | — |  |  | — | % |  | 2,000 |  |  | 5.50 | %
Junior subordinated debentures due June 15, 2036 |  | 2,062 |  |  | 4.68 | % |  | 2,062 |  |  | 3.56 | %
Other subordinated notes due December 1, 2025 |  | 13,500 |  |  | 6.95 | % |  | 13,500 |  |  | 6.95 | %
Less: Unamortized debt issuance costs |  | (169 | ) |  |  |  | (201 | ) |  |
Total - Other borrowed funds |  | $ | 15,393 |  |  |  |  | $ | 17,361 |  |  |  |
Federal Home Loan Bank advances The Federal Home Loan Bank advances require quarterly interest payments with principal and any remaining accrued interest due at maturity. Senior promissory note On July 30, 2014, the Company issued a $5,000,000 senior promissory note (the “Note”) with a maturity date of July 31, 2019. The Company repaid $3,000,000 on this note on July 30, 2016. On that date, the Note was amended and the interest rate was fixed at 5.00% through September 30, 2017. Effective October 1, 2017, the Note was again amended to fix the interest rate at 5.50% through March 31, 2018, and was paid off on March 30, 2018. Junior subordinated debentures In June 2006, the Company formed Capital Bancorp (MD) Statutory Trust I (the “Trust”) and on June 15, 2006, the Trust issued 2,000 floating Rate Capital Securities (the “Capital Securities”) with an aggregate liquidation value of $2,000,000 to a third party in a private placement. Concurrent with the issuance of the Capital Securities, the Trust issued trust common securities to the Company in the aggregate liquidation value of $62,000. The proceeds of the issuance of the Capital Securities and trust common securities were invested in the Company’s Floating Rate Junior Subordinated Deferrable Interest Debentures (the “Floating Rate Debentures”). The Floating Rate Debentures for the Trust will mature on June 15, 2036, which may be shortened if certain conditions are met (including the Company having received prior approval of the Board of Governors of the Federal Reserve System and any other required regulatory approvals). These Floating Rate Debentures, which are the only assets of the Trust, are subordinate and junior in right of payment to all present and future senior indebtedness (as defined in the Indenture dated June 15, 2006) of the Company. The Floating Rate Debentures for the Trust accrue interest at a floating rate equal to the three-month LIBOR plus 1.87%, payable quarterly. As of December 31, 2018 and 2017, the rate for the Trust was 4.68% and 3.56%, respectively. The quarterly distributions on the Capital Securities will be paid at the same rate that interest is paid on the Floating Rate Debentures. The Company has fully and unconditionally guaranteed the Trust’s obligation under the Capital Securities. The Trust must redeem the Capital Securities when the Floating Rate Debentures are paid at maturity or upon any earlier prepayment of the Floating Rate Debentures. The Floating Rate Debentures may be prepaid if certain events occur, including a change in the tax status or regulatory capital treatment of the Capital Securities, or a change in existing laws that requires the Trust to register as an investment company. The junior subordinated debentures are treated as Tier 1 capital, to a limited extent, by the Federal Reserve. Other subordinated notes On November 24, 2015, the Company issued $13,500,000 of subordinated notes. The notes mature on December 1, 2025. The notes bear interest at 6.95% for the first five years, then adjust to the three‑month LIBOR plus 5.33% adjusted on March 1, June 1, September 1, and December 1 of each year. Interest is payable quarterly. There were related debt issuance costs incurred totaling $278,231. The costs are amortized to interest expense through the maturity date of the notes. Available lines of credit The Company has available lines of credit of $28,000,000 with other correspondent banks, and $2,000,000 was outstanding with Pacific Coast Bankers Bank at December 31, 2018, and paid off on January 2, 2019. The Company may borrow up to 25% of its assets from the FHLB, based on collateral available to pledge to secure the borrowings. Borrowings from the FHLB are secured by a portion of the Company’s loan and/or investment portfolio. As of December 31, 2018 and 2017, the Company had pledged loans providing borrowing capacity of $235.2 million and $78.8 million, respectively. As of December 31, 2018 and 2017, the Company had pledged investment securities with a fair value of $6.7 million and $7.5 million, respectively, to the FHLB. As of December 31, 2018 and 2017, the Company had $185.6 million and $84.1 million, respectively, of available borrowing capacity from the FHLB. As of December 31, 2018 and 2017, the Company had pledged commercial loans to the Federal Reserve Bank of Richmond to provide a borrowing capacity totaling $13.1 million and $17.9 million, respectively, under its discount window program. There were no advances outstanding under this facility as of December 31, 2018 and 2017. Certificate of deposit funding through a financial network is limited to 15% of the Bank’s assets, or approximately $161.2 million and $152.4 million as of December 31, 2018 and 2017, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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