Note 12 - Common Stock Offering and Balance Sheet Restructuring

12 Months Ended

Dec. 31, 2015

Common Stock Offering And Balance Sheet Restructuring [Abstract]

Common Stock Offering And Balance Sheet Restructuring [Text Block]

Note 12.     Common Stock Offering and Balance Sheet Restructuring

On May 13, 2015, the Company announced the closing of an underwritten public offering of 3,680,000 shares of its common stock at a price of $18.25 per share. The net proceeds to the Company, after deducting the underwriting discount and offering expenses, totaled $63.5 million. As a result of the capital raise, the Company’s regulatory capital ratios increased significantly. Additional information regarding regulatory capital is described in Note 16 to the Consolidated Financial Statements.

The Company utilized the proceeds from the common stock offering to restructure certain debt obligations and to bolster overall capital levels. Specifically, the Company repaid $15.3 million of holding company senior debt at an interest rate of 3.27%, and $2.7 million of Series A subordinated debt at an interest rate of 6.00%. Additionally, $85.5 million of FHLB advances and wholesale structured repurchase agreements at a weighted average interest rate of 4.36% were prepaid at QCBT and CRBT. As a result of this planned restructuring, the Company incurred $6.9 million (pre-tax) in losses for debt extinguishment that were recognized in the second quarter of 2015.

Of the $103.5 million in debt extinguishments, $63.5 million was funded with the proceeds from the common stock issuance. Approximately $27.7 million was funded through the maturity of low-yielding securities. Brokered certificates of deposits and overnight FHLB advances were utilized to fund the remaining $12.3 million. The weighted average interest rate on these new borrowings was approximately 0.90%.

This restructuring and deleveraging significantly reduced the wholesale borrowings portfolio of the Company, which includes FHLB advances, wholesale structured repurchase agreements, and brokered certificates of deposits. The table below presents the maturity schedule including weighted average cost for the Company’s combined wholesale borrowings portfolio.

	December 31, 2015				December 31, 2014
			Weighted				Weighted
			Average				Average
			Interest Rate				Interest Rate
Maturity:	Amount Due		at Year-End		Amount Due		at Year-End
	(dollar amounts in thousands)
Year ending December 31:
2015	$	-	0.00	%	$	117,300	0.86	%
2016		125,038	0.59			50,642	3.51
2017		49,055	2.07			53,965	2.96
2018		57,283	2.87			60,042	3.41
2019		50,089	3.14			83,152	3.59
2020		45,000	2.66			45,000	2.66
Thereafter		3,641	2.51			6,141	2.54
Total Wholesale Borrowings	$	330,106	1.89	%	$	416,242	2.59	%

The Company continued to execute further balance sheet restructuring strategies in late 2015 and early 2016, as described in Notes 9, 10 and 25 to the Consolidated Financial Statements.