MANDATORILY REDEEMABLE PREFERRED SECURITIES

9 Months Ended

Sep. 30, 2020

MANDATORILY REDEEMABLE PREFERRED SECURITIES

MANDATORILY REDEEMABLE PREFERRED SECURITIES

NOTE G: MANDATORILY REDEEMABLE PREFERRED SECURITIES

As of September 30, 2020, the Company sponsors one business trust, Community Capital Trust IV (“CCT IV”), of which 100% of the common stock is owned by the Company. The Company previously sponsored Steuben Statutory Trust ("SST II ") until September 15, 2020 when the Company exercised its right to redeem all of the SST II debentures and associated preferred securities for a total of $2.1 million. The Company previously sponsored MBVT Statutory Trust I (“MBVT I”) and Kinderhook Capital Trust (“KCT”) until September 16, 2019 when the Company exercised its right to redeem all of the MBVT I and KCT debentures and associated preferred securities for a total of $20.6 million and $2.1 million, respectively. The common stock of MBVT I was acquired in the Merchants Bancshares, Inc. (“Merchants”) acquisition, the common stock of KCT was acquired in the Kinderhook acquisition and the common stock of SST II was acquired in the Steuben acquisition. The trusts were formed for the purpose of issuing company-obligated mandatorily redeemable preferred securities to third-party investors and investing the proceeds from the sale of such preferred securities solely in junior subordinated debt securities of the Company. The debentures held by each trust are the sole assets of such trust. Distributions on the preferred securities issued by each trust are payable quarterly at a rate per annum equal to the interest rate being earned by the trust on the debentures held by that trust and are recorded as interest expense in the consolidated financial statements. The preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the debentures. The Company has entered into agreements which, taken collectively, fully and unconditionally guarantee the preferred securities subject to the terms of each of the guarantees. As of September 30, 2020, the terms of the preferred securities of CCT IV are as follows:

	Issuance	Par			Maturity
Trust	Date	Amount		Interest Rate	Date	Call Price
CCT IV	12/8/2006	$	75.0 million	3 month LIBOR plus 1.65% (1.90%)	12/15/2036	Par