This excerpt taken from the TRUE 10-Q filed May 11, 2009.
Note 8. Borrowed Funds and Debt Obligations
On March 31, 2008, the Company entered into a loan agreement with Bank of America (BofA) consisting of three credit facilities: a secured revolving line of credit, a secured term facility, and a subordinated debt. In February, 2009, the loan agreement on the revolving line of credit was amended resulting in an aggregate principal amount of $20,250 in borrowings. The first credit facility consists of a $10,000 secured revolving line of credit which has a maturity date of June 30, 2009. As of March 31, 2009 there is no balance on this line of credit while at December 31, 2008 it had a balance of $8,865. The second credit facility consists of a $250 secured term facility, which will mature in March 31, 2015. The balance on this facility was $250 as of March 31, 2009 and December 31, 2008. The third credit facility consists of $10,000 in subordinated debt, which also matures in March 31, 2015. The balance on this facility was $10,000 as of March 31, 2009 and December 31, 2008. The interest rate on the term and subordinated debt credit facilities is three month LIBOR plus 295 basis points. The interest rate on the revolving credit facility is three month LIBOR plus 250 basis points with
Note 8. Borrowed Funds and Debt Obligations (continued)
a floor of 5.00%. Repayment of each of the three credit facilities is interest only on a quarterly basis, with the principal amount of the loan due at maturity. The revolving and term credit facilities are secured by a pledge of the stock of Centrue Bank. The subordinated debt credit facility is unsecured and is intended to qualify as Tier II capital for regulatory purposes. The loan agreement contains customary covenants, including but not limited to, Centrue Banks maintenance of its status as well-capitalized, Centrue Banks minimum return on average assets on an annual basis of 0.50%, Centrue Banks maximum nonperforming assets to primary capital below 20%, and Centrue Banks minimum loan loss reserves to total loans of 1.00%. The Company submitted to BofA its covenant certification as required that it was in compliance with all of the debt covenants with the exception of the covenant related to the return of assets percentage which requires a ROA of 0.50% at the Bank level. The ROA at the Bank level was 0.46% for the period ending March 31, 2009. The Company is using these credit facilities for general working capital purposes. The loan agreement contains no penalty for early repayment of either the revolving credit facility or the subordinated debt credit facility. As of March 31, 2009, the outstanding balance on these lines is $10,250. Additionally, the Company has a note outstanding to an individual with an imputed interest rate of 5.25% maturing on October 24, 2012 for a prior acquisition. The balance as of March 31, 2009 and December 31, 2008 was $711.