Quarterly report pursuant to Section 13 or 15(d)

BORROWINGS

v2.4.0.8
BORROWINGS
6 Months Ended
Jun. 30, 2014
BORROWINGS [Abstract]  
BORROWINGS

6.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 overnight borrowings from other financial institutions, and short-term FHLB advancesTotal short-term borrowings consist of the following as of June 30, 2014 and December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

2014

 

2013

Securities sold under agreements to repurchase

$

42,276 

 

$

52,455 

Other short-term borrowings

 

200,000 

 

 

211,500 

Total short-term borrowings

$

242,276 

 

$

263,955 

 

 

 

 

 

 

Maximum month-end outstanding balance

$

274,281 

 

$

263,955 

Average outstanding balance during the period

 

263,282 

 

 

119,433 

Average interest rate during the period

 

0.24% 

 

 

0.30% 

Average interest rate at end of period

 

0.34% 

 

 

0.30% 

 

 

 

 

 

 

Other short-term borrowings:

 

 

 

 

 

Federal funds purchased

$

35,000 

 

$

31,500 

FHLB

$

165,000 

 

$

180,000 

 

 

 

 

 

 

 

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $90.0 million and $93.5 million at June 30, 2014 and December 31, 2013, 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 Bank had a collateral dependent line of credit with the FHLB of up to $1.5 billion and $805.2 million at June 30, 2014 and December 31, 2013, respectively.    

 

 

Long-term Borrowings

In connection with certain 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.  In connection with the acquisition of StellarOne, the Company acquired trust preferred capital notes totaling $32.0 million with a remaining fair value discount of $7.3 million at June 30, 2014.  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% 

 

2.98% 

 

6/17/2034

Trust Preferred Capital Note - Statutory Trust II

 

36,000,000 

 

 

1,114,000 

 

1.40% 

 

1.63% 

 

6/15/2036

VFG Limited Liability Trust I Indenture

 

20,000,000 

 

 

619,000 

 

2.73% 

 

2.96% 

 

3/18/2034

FNB Statutory Trust II Indenture

 

12,000,000 

 

 

372,000 

 

3.10% 

 

3.33% 

 

6/26/2033

Total

$

90,500,000 

 

$

2,801,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 June 30, 2014, the carrying value of the subordinated debt was $17.5 million, with a remaining fair value discount of $897,000. 

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 six months ended June 30, 2014 and 2013 was $444,000 and $881,000 and $433,000 and $859,000, respectively.

 

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB with a remaining fair value premium of $2.6 million at June 30, 2014.  As of June 30, 2014, the advances from the FHLB consisted of the following (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Long Term Type

 

Spread to
3-Month LIBOR

 

Interest Rate

 

Maturity Date

 

Advance Amount

 

 

 

 

 

 

 

 

 

 

Adjustable Rate Credit

 

0.44%

 

0.67%

 

8/23/2022

 

$

55,000 

Adjustable Rate Credit

 

0.45%

 

0.68%

 

11/23/2022

 

 

65,000 

Adjustable Rate Credit

 

0.45%

 

0.68%

 

11/23/2022

 

 

10,000 

Adjustable Rate Credit

 

0.45%

 

0.68%

 

11/23/2022

 

 

10,000 

Fixed Rate

 

-

 

3.62%

 

11/28/2017

 

 

10,000 

Fixed Rate

 

-

 

3.44%

 

7/28/2015

 

 

10,000 

Fixed Rate

 

-

 

3.75%

 

7/30/2018

 

 

5,000 

Fixed Rate

 

-

 

3.97%

 

7/30/2018

 

 

5,000 

Fixed Rate Hybrid

 

-

 

2.11%

 

10/5/2016

 

 

25,000 

Fixed Rate Hybrid

 

-

 

0.91%

 

7/25/2016

 

 

15,000 

 

 

 

 

 

 

 

 

$

210,000 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2013, the advances from the FHLB consisted of the following (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

Long Term Type

 

Spread to
3-Month LIBOR

 

Interest Rate

 

Maturity Date

 

Advance Amount

 

 

 

 

 

 

 

 

 

 

Adjustable Rate Credit

 

0.44%

 

0.69%

 

8/23/2022

 

$

55,000 

Adjustable Rate Credit

 

0.45%

 

0.70%

 

11/23/2022

 

 

65,000 

Adjustable Rate Credit

 

0.45%

 

0.70%

 

11/23/2022

 

 

10,000 

Adjustable Rate Credit

 

0.45%

 

0.70%

 

11/23/2022

 

 

10,000 

 

 

 

 

 

 

 

 

$

140,000 

 

 

 

 

 

 

 

 

 

 

The carrying value of the loans and securities pledged as collateral for FHLB advances totaled $1.5 billion and  $1.1 billion as of June  30, 2014 and December 31, 2013, respectively.

 

As of June 30, 2014, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust Preferred Capital Notes

 

Subordinated Debt

 

FHLB Advances

 

Fair Value
Premium (Discount)

 

Prepayment Penalty

 

Total Long-term Borrowings

Remaining six months in 2014

$

 -

 

$

 -

 

$

 -

 

$

150 

 

$

(907)

 

$

(757)

2015

 

 -

 

 

 -

 

 

10,000 

 

 

175 

 

 

(1,831)

 

 

8,344 

2016

 

 -

 

 

17,500 

 

 

40,000 

 

 

271 

 

 

(1,882)

 

 

55,889 

2017

 

 -

 

 

 -

 

 

10,000 

 

 

170 

 

 

(1,923)

 

 

8,247 

2018

 

 -

 

 

 -

 

 

10,000 

 

 

(143)

 

 

(1,969)

 

 

7,888 

2019

 

 -

 

 

 -

 

 

 -

 

 

(286)

 

 

(2,018)

 

 

(2,304)

Thereafter

 

93,301 

 

 

 -

 

 

140,000 

 

 

(5,923)

 

 

(5,899)

 

 

221,479 

Total long-term borrowings

$

93,301 

 

$

17,500 

 

$

210,000 

 

$

(5,586)

 

$

(16,429)

 

$

298,786