Eagle Bancorp Montana, Inc. Debt Disclosure

NOTE 10:

Other Long-Term Debt

 

Other long-term debt consisted of the following:

 

		December 31,
		2020								2019
						Unamortized								Unamortized
						Debt								Debt
		Principal				Issuance				Principal				Issuance
		Amount				Costs				Amount				Costs
		(In Thousands)
Senior notes fixed at 5.75%, due 2022		$	10,000			$	(48	)		$	10,000			$	(92	)
Subordinated debentures fixed at 6.75%, due 2025			-				-				10,000				(122	)
Subordinated debentures fixed at 5.50% to floating, due 2030			15,000				(316	)			-				-
Subordinated debentures variable at 3-Month Libor plus 1.42%, due 2035			5,155				-				5,155				-
Total other long-term debt		$	30,155			$	(364	)		$	25,155			$	(214	)

 

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 will bear interest at an annual fixed rate of 5.50% payable semi-annually. Starting July 1, 2025, 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 509.0 basis points, payable quarterly. The notes are subject to redemption at the option of the Company on or after July 1, 2025. The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes.

 

In February 2017, the Company completed the issuance, through a private placement, of $10,000,000 aggregate principal amount of 5.75% fixed senior unsecured notes due in 2022. The interest will be paid semi-annually through maturity date. The notes are not subject to redemption at the option of the Company.

 

In June 2015, the Company completed the issuance of $10,000,000 in aggregate principal amount of subordinated notes due in 2025 in a private placement transaction to an institutional accredited investor. The notes had an annual fixed rate of 6.75% and interest was be paid quarterly through redemption. The notes were subject to redemption at the option of the Company on or after June 19, 2020. The notes were redeemed on July 10, 2020. The subordinated debentures qualified as Tier 2 capital for regulatory capital purposes.

 

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 to First Tennessee Bank, N.A. 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 on December 15, 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 3-Month LIBOR plus 1.42%, making the rate 1.66% and 3.33% as of December 31, 2020 and 2019, respectively. 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 capital purposes.

 

For 2020 and 2019, interest expense on all other long-term debt was $1,687,000 and $1,446,000, respectively.