Quarterly report pursuant to Section 13 or 15(d)

BORROWINGS

v3.2.0.727
BORROWINGS
6 Months Ended
Jun. 30, 2015
BORROWINGS [Abstract]  
BORROWINGS

 

6.BORROWINGS

Short-term Borrowings

 

The Company classifies all borrowings that will mature within a year from the date on which the Company enters into them as short-term borrowings.  Total short-term borrowings consist primarily of advances from the FHLB, federal funds purchased (which are secured overnight borrowings from other financial institutions), and other lines of credit.  Also included in total short-term borrowings are securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold.  Total short-term borrowings consist of the following as of June 30, 2015 and December 31, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

2015

 

2014

Securities sold under agreements to repurchase

$

119,680 

 

$

44,393 

Other short-term borrowings

 

261,000 

 

 

343,000 

Total short-term borrowings

$

380,680 

 

$

387,393 

 

 

 

 

 

 

Maximum month-end outstanding balance

$

445,761 

 

$

387,393 

Average outstanding balance during the period

 

391,424 

 

 

237,896 

Average interest rate during the period

 

0.26% 

 

 

0.24% 

Average interest rate at end of period

 

0.25% 

 

 

0.31% 

 

 

 

 

 

 

Other short-term borrowings:

 

 

 

 

 

FHLB

$

255,000 

 

$

335,000 

Other lines of credit

 

6,000 

 

 

8,000 

 

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $175.0 million and $150.0 million at June 30, 2015 and December 31, 2014, 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 $1.5  billion and $1.4 billion at June 30, 2015 and December 31, 2014, 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.  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 $7.1 million at June 30, 2015.  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% 

 

3.03% 

 

6/17/2034

Trust Preferred Capital Note - Statutory Trust II

 

36,000,000 

 

 

1,114,000 

 

1.40% 

 

1.68% 

 

6/15/2036

VFG Limited Liability Trust I Indenture

 

20,000,000 

 

 

619,000 

 

2.73% 

 

3.01% 

 

3/18/2034

FNB Statutory Trust II Indenture

 

12,000,000 

 

 

372,000 

 

3.10% 

 

3.38% 

 

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, 2015, the carrying value of the subordinated debt was $17.5 million, with a remaining fair value discount of $408,000. 

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 Sheets.  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 Statements of Income.  Amortization expense for the three and six months ended June 30, 2015 and 2014 was $455,000 and $902,000 and $444,000 and $881,000, respectively.

 

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB that had a remaining fair value premium of $1.6 million at June 30, 2015. 

 

 

As of June 30, 2015, the Company had advances from the FHLB consisting 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%

 

0.72%

 

8/23/2022

 

$

55,000 

Adjustable Rate Credit

 

0.45%

 

0.74%

 

11/23/2022

 

 

65,000 

Adjustable Rate Credit

 

0.45%

 

0.74%

 

11/23/2022

 

 

10,000 

Adjustable Rate Credit

 

0.45%

 

0.74%

 

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, 2014, the Company had advances from the FHLB consisting 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%

 

0.70%

 

8/23/2022

 

$

55,000 

Adjustable Rate Credit

 

0.45%

 

0.71%

 

11/23/2022

 

 

65,000 

Adjustable Rate Credit

 

0.45%

 

0.71%

 

11/23/2022

 

 

10,000 

Adjustable Rate Credit

 

0.45%

 

0.71%

 

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 

 

 

 

 

 

 

 

 

 

 

 

The carrying value of the loans and securities pledged as collateral for FHLB advances totaled $1.8 billion and $1.2 billion as of June 30, 2015 and December 31, 2014, respectively.

 

As of June 30, 2015, 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 2015

$

-

 

$

 -

 

$

10,000 

 

$

25 

 

$

(929)

 

$

9,096 

2016

 

 -

 

 

17,500 

 

 

40,000 

 

 

271 

 

 

(1,882)

 

 

55,889 

2017

 

 -

 

 

 -

 

 

10,000 

 

 

170 

 

 

(1,922)

 

 

8,248 

2018

 

 -

 

 

 -

 

 

10,000 

 

 

(143)

 

 

(1,970)

 

 

7,887 

2019

 

 -

 

 

 -

 

 

 -

 

 

(286)

 

 

(2,018)

 

 

(2,304)

2020

 

 -

 

 

 -

 

 

 -

 

 

(301)

 

 

(2,074)

 

 

(2,375)

Thereafter

 

93,301 

 

 

 -

 

 

140,000 

 

 

(5,622)

 

 

(3,826)

 

 

223,853 

Total Long-term borrowings

$

93,301 

 

$

17,500 

 

$

210,000 

 

$

(5,886)

 

$

(14,621)

 

$

300,294