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Note 6 - Other Long-term Debt

3 Months Ended

Mar. 31, 2026

Notes to Financial Statements

Long-Term Debt [Text Block]

NOTE 6. OTHER LONG-TERM DEBT

Other long-term debt consisted of the following:

		March 31, 2026								December 31, 2025
						Unamortized								Unamortized
						Debt								Debt
		Principal				Issuance				Principal				Issuance
		Amount				Costs				Amount				Costs
		(In Thousands)
Subordinated debentures fixed at 3.50% to floating, due 2032		$	40,000			$	(676	)		$	40,000			$	(705	)
Subordinated debentures variable at 3-Month SOFR plus 1.68%, due 2035			5,155				-				5,155				-
Total other long-term debt		$	45,155			$	(676	)		$	45,155			$	(705	)

In January 2022, the Company completed the issuance of $40,000,000 in aggregate principal amount of subordinated notes due in 2032 in a private placement transaction to certain institutional accredited investors and qualified buyers. The notes bear interest at an annual fixed rate of 3.50% payable semi-annually. Starting February 1, 2027, interest will accrue at a floating rate per annum equal to a benchmark rate, which is expected to be three-month term Secured Overnight Financing Rate ("SOFR") plus a spread of 218.0 basis points, payable quarterly. The notes are subject to redemption at the option of the Company on or after February 1, 2027. The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes.

In June 2020, the Company completed the issuance of $15,000,000 in aggregate principal amount of subordinated notes due in 2030 in a private placement transaction to certain qualified institutional accredited investors. The notes bore interest at an annual fixed rate of 5.50% payable semi-annually. Starting July 1, 2025, interest accrued at a floating rate per annum equal to a benchmark rate, which was three-month term SOFR plus a spread of 509.0 basis points, payable quarterly. The floating rate was 9.39% for the three months ended September 30, 2025. The notes were subject to redemption at the option of the Company on or after July 1, 2025. The subordinated debentures qualified as Tier 2 capital for regulatory capital purposes. The notes were redeemed October 1, 2025 utilizing a line of credit with a correspondent bank to finance the redemption payment. The line of credit rate is based on Prime minus 50.0 basis points and was 6.25% as of March 31, 2026 and December 31, 2025.

In September 2005, the Company completed the private placement of $5,155,000 in subordinated debentures to the Trust. The Trust funded the purchase of the subordinated debentures through the sale of trust preferred securities with a liquidation value of $5,155,000. Using interest payments made by the Company on the debentures, the Trust began paying quarterly dividends to preferred security holders in December 2005. The annual percentage rate of the interest payable on the subordinated debentures and distributions payable on the preferred securities was fixed at 6.02% until December 2010 then became variable at three-month LIBOR plus 1.42%. In December of 2022, Governors of the Federal Reserve System adopted final rule 12 C.F.R. Part 253, Regulation Implementing the Adjustable Interest Rate (LIBOR) Act. Rule 253 identified SOFR-benchmark rates to replace LIBOR in certain financial contracts after June 30, 2023. As a result, the variable rate for interest payable converted to three-month CME Term SOFR plus 1.68% during the quarter ended March 31, 2024. The rate was 5.36% as of March 31, 2026 and 5.33% as of December 31, 2025. Dividends on the preferred securities are cumulative and the Trust may defer the payments for up to five years. The preferred securities mature in December 2035 unless the Company elects and obtains regulatory approval to accelerate the maturity date. The subordinated debentures qualify as Tier 1 capital for regulatory purposes.