Quarterly report pursuant to Section 13 or 15(d)

BORROWINGS

v2.4.0.8
BORROWINGS
9 Months Ended
Sep. 30, 2013
BORROWINGS [Abstract]  
BORROWINGS

5.BORROWINGS

 

Short-term Borrowings

 

Total short-term borrowings consist of securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold.  Also included in total short-term borrowings are federal funds purchased, which are secured overnight borrowings from other financial institutions, and short-term FHLB advancesTotal short-term borrowings consist of the following as of September 30, 2013 and December 31, 2012 (dollars in thousands):

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

2013

 

2012

Securities sold under agreements to repurchase

$

79,202 

 

$

54,270 

Other short-term borrowings

 

72,000 

 

 

78,000 

Total short-term borrowings

$

151,202 

 

$

132,270 

 

 

 

 

 

 

Maximum month-end outstanding balance

$

151,202 

 

$

154,116 

Average outstanding balance during the period

 

104,364 

 

 

91,993 

Average interest rate during the period

 

0.30% 

 

 

0.31% 

Average interest rate at end of period

 

0.28% 

 

 

0.28% 

 

 

 

 

 

 

Other short-term borrowings:

 

 

 

 

 

Federal Funds purchased

$

37,000 

 

$

38,000 

FHLB

$

35,000 

 

$

40,000 

 

 

 

 

 

 

 

 The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $88.0 million and $87.0 million at September 30, 2013 and December 31, 2012, respectively.  The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with these covenants.  Additionally, the Company had a collateral dependent line of credit with the FHLB of up to  $808.4 million and $802.2 million at September 30, 2013 and December 31, 2012, respectively. 

 

 

Long-term Borrowings

 

In connection with two bank acquisitions prior to 2006, the Company issued trust preferred capital notes to fund the cash portion of those acquisitions, collectively totaling $58.5 million.  The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal

 

Investment(1)

 

Spread to
3-Month LIBOR

 

Rate

 

Maturity

Trust Preferred Capital Note - Statutory Trust I

$

22,500,000 

 

$

696,000 

 

2.75% 

 

3.00% 

 

6/17/2034

Trust Preferred Capital Note - Statutory Trust II

 

36,000,000 

 

 

1,114,000 

 

1.40% 

 

1.65% 

 

6/15/2036

Total

$

58,500,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) reported as 'Other Assets' within the Consolidated Balance Sheets

As part of a prior acquisition, the Company assumed subordinated debt with terms of LIBOR plus 1.45%  and a maturity date of April 2016.  At September 30, 2013, the carrying value of the subordinated debt, net of the purchase accounting discount, was $16.2 million.

On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances which resulted in reducing the Company’s FHLB borrowing costs.  In connection with this modification, the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings in the Company’s consolidated balance sheet.  In accordance with ASC 470-50, Modifications and Extinguishments, the Company will amortize this prepayment penalty over the term of the modified advances using the effective rate method.  The amortization expense is included as a component of interest expense on long-term borrowings in the Company’s consolidated income statement.  Amortization expense for the three and nine months ended September 30, 2013 was $441,000 and $1.3 million,  respectively, and $0 for both three and nine months ended September 30, 2012.  

 

As of September 30, 2013, the advances from the FHLB consist of the following (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Term Type

 

Spread to
3-Month LIBOR

 

Interest Rate

 

Maturity Date

 

Conversion Date

 

Option Frequency

 

Advance Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustable Rate Credit

 

0.44%

 

0.69%

 

8/23/2022

 

n/a

 

n/a

 

$

55,000 

Adjustable Rate Credit

 

0.45%

 

0.70%

 

11/23/2022

 

n/a

 

n/a

 

 

65,000 

Adjustable Rate Credit

 

0.45%

 

0.70%

 

11/23/2022

 

n/a

 

n/a

 

 

10,000 

Adjustable Rate Credit

 

0.45%

 

0.70%

 

11/23/2022

 

n/a

 

n/a

 

 

10,000 

 

 

 

 

 

 

 

 

 

 

 

 

$

140,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2012, the advances from the FHLB consisted of the following (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Term Type

 

Spread to
3-Month LIBOR

 

Interest Rate

 

Maturity Date

 

Conversion Date

 

Option Frequency

 

Advance Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustable Rate Credit

 

0.44%

 

0.75%

 

8/23/2022

 

n/a

 

n/a

 

$

55,000 

Adjustable Rate Credit

 

0.45%

 

0.76%

 

11/23/2022

 

n/a

 

n/a

 

 

65,000 

Adjustable Rate Credit

 

0.45%

 

0.76%

 

11/23/2022

 

n/a

 

n/a

 

 

10,000 

Adjustable Rate Credit

 

0.45%

 

0.76%

 

11/23/2022

 

n/a

 

n/a

 

 

10,000 

 

 

 

 

 

 

 

 

 

 

 

 

$

140,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The carrying value of the loans and securities pledged as collateral for FHLB advances totaled $1.1 billion and $1.0 billion as of September 30, 2013 and December 31, 2012, respectively.

 

 

 

As of September 30, 2013, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subordinated Debt

 

FHLB Advances

 

Prepayment Penalty

 

Total Long-term Borrowings

Remaining three months in 2013

$

 -

 

$

 -

 

$

(444)

 

$

(444)

2014

 

 -

 

 

 -

 

 

(1,787)

 

 

(1,787)

2015

 

 -

 

 

 -

 

 

(1,831)

 

 

(1,831)

2016

 

16,237 

 

 

 -

 

 

(1,882)

 

 

14,355 

2017

 

 -

 

 

 -

 

 

(1,923)

 

 

(1,923)

2018

 

 -

 

 

 -

 

 

(1,969)

 

 

(1,969)

Thereafter

 

 -

 

 

140,000 

 

 

(7,918)

 

 

132,082 

Total long-term borrowings

$

16,237 

 

$

140,000 

 

$

(17,754)

 

$

138,483