Borrowings and Other Obligations

12 Months Ended

Dec. 31, 2020

Federal Funds Purchased – The Bank had unsecured lines of credit with correspondent banks for overnight borrowings totaling $135.0 million and $92.0 million at December 31, 2020 and 2019, respectively. In general, interest rates on these lines approximate the federal funds target rate. We had no overnight borrowings under these credit facilities at December 31, 2020 and 2019.

Federal Home Loan Bank Borrowings – As of December 31, 2020 and 2019, the Bank had lines of credit with the FHLB totaling $642.5 million and $648.0 million, respectively, based on eligible collateral of certain loans. There were no FHLB overnight borrowings at December 31, 2020 and 2019.

Federal Reserve Line of Credit – The Bank has a line of credit with the FRBSF secured by certain residential loans. At December 31, 2020 and 2019, the Bank had borrowing capacity under this line totaling $78.7 million and $80.3 million, respectively, and had no outstanding borrowings with the FRBSF.

Subordinated Debentures - As part of an acquisition, Bancorp assumed two subordinated debentures due to NorCal Community Bancorp Trusts I and II, established for the sole purpose of issuing trust preferred securities. The trust preferred securities were sold and issued in private transactions pursuant to an exemption from registration under the Securities Act of 1933, as amended. On October 7, 2018, Bancorp redeemed in full the

subordinated debenture due to NorCal Community Bancorp Trust I, resulting in $916 thousand of accelerated accretion. The Trust II subordinated debenture was recorded at fair value totaling $2.14 million at acquisition date with a contractual balance of $4.12 million. The difference between the contractual balance and the fair value at acquisition date is accreted into interest expense over the life of the debenture. Accretion on the subordinated debentures totaled $69 thousand, $68 thousand (Trust II) and $1.0 million (Trusts I and II) for the years ended December 31, 2020, 2019 and 2018, respectively. Bancorp has guaranteed, on a subordinated basis, distributions and other payments due on trust preferred securities totaling $4.0 million issued by Trust II, which have identical maturity, repricing and payment terms as the subordinated debenture.

The subordinated debenture due to Trust II on March 15, 2036 with interest payable quarterly (repricing quarterly, based on 3-month LIBOR plus 1.40%, or 1.62% as of December 31, 2020) is redeemable in whole or in part on any interest payment date. On March 15, 2021, we early redeemed the $2.8 million subordinated debenture due to Trust II, which carried an average interest rate of 5.68% in 2020. The redemption consisted of $4.1 million principal balance, accrued interest, and $1.3 million in accelerated purchase discount accretion.

Other Obligations - The Bank leases certain equipment under finance leases, which are included in borrowings and other obligations in the consolidated statements of condition. Refer to Note 12, Commitments and Contingencies, for additional information.

Borrowings and other obligations at and for the years ended December 31, 2020, 2019 and 2018 are summarized as follows:


	2020						2019						2018
(dollars in thousands)	Carrying Value		Average Balance		Average Rate		Carrying Value		Average Balance		Average Rate		Carrying Value		Average Balance		Average Rate
FHLB overnight borrowings	$	—	$	42	0.75	%	$	—	$	2,656	2.55	%	$	7,000	$	105	2.03	%
Other obligations (finance leases)	$	58	$	132	2.62	%	$	212	$	279	2.85	%	$	—	$	—	—	%

Subordinated debentures 1	$	2,777	$	2,741	5.68	%	$	2,708	$	2,673	8.44	%	$	2,640	$	5,025	26.29	%

1 Subordinated debentures average rate in 2018 included the impact of the $916 thousand accelerated accretion due to early redemption of the subordinated debenture due to NorCal Community Bancorp Trust I.