Long-term Debt

12 Months Ended

Dec. 31, 2018

NOTE 10: LONG-TERM DEBT

At December 31, 2018 and 2017, the composition of long-term debt is presented below.

		2018				2017
				Weighted				Weighted
(Dollars in thousands)			Amount	Avg. Rate			Amount	Avg. Rate
Subordinated debentures, due 2033		$	—	—	%	$	3,217	4.63	%

	Total long-term debt	$	—	—	%	$	3,217	4.63	%

The Company formed Auburn National Bancorporation Capital Trust I (the “Trust”), a wholly-owned statutory business trust, in 2003. The Trust issued $7.0 million of trust preferred securities that were sold to third parties. The proceeds from the sale of the trust preferred securities and trust common securities that we held, were used to purchase junior subordinated debentures of $7.2 million from the Company, which are presented as long-term debt in the consolidated balance sheets and qualify for inclusion in Tier 1 capital for regulatory capital purposes, subject to certain limitations. The debentures would have matured on December 31, 2033 and had been redeemable since December 31, 2008.

On April 27, 2018, the Trust formally redeemed all of its issued and outstanding trust preferred securities at par. The Company had repurchased $4.0 million par amount of trust preferred securities issued by the Trust in October 2016, at a discount. The additional amount paid on April 27, 2018 for trust preferred securities not previously purchased by the Company was approximately $3.0 million, including accrued and unpaid distributions. All junior subordinated debentures related to the Trust were redeemed and retired as a result of the action.

The Company now has no outstanding trust preferred securities or junior subordinated debentures, and the Trust has been dissolved.