Quarterly report pursuant to Section 13 or 15(d)

BORROWINGS

v3.21.1
BORROWINGS
3 Months Ended
Mar. 31, 2021
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 March 31, 2021 and December 31, 2020 (dollars in thousands):

    

March 31, 

December 31, 

 

2021

2020

 

Securities sold under agreements to repurchase

$

105,522

$

100,888

Federal Funds Purchased

168,000

150,000

FHLB Advances

 

 

100,000

Total short-term borrowings

$

273,522

$

350,888

Average outstanding balance during the period

$

149,761

$

213,932

Average interest rate (during the period)

 

0.13

%  

 

0.79

%

Average interest rate at end of period

 

0.08

%  

 

0.13

%

The Bank maintains federal funds lines with several correspondent banks, the remaining available balance was $829.0 million and $847.0 million at March 31, 2021 and December 31, 2020, respectively. The Company maintains an alternate line of credit at a correspondent bank, which had an available balance of $25.0 million at both March 31, 2021 and December 31, 2020. 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 such covenants as of March 31, 2021 and December 31, 2020. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $5.9 billion and $6.0 billion at March 31, 2021 and December 31, 2020, respectively.

Long-term Borrowings

In response to the current rate environment, the Company prepaid a $200.0 million long-term FHLB advance on February 26, 2021 and $550.0 million of long-term FHLB advances in 2020, which resulted in prepayment penalties of $14.7 million and $31.2 million, respectively. In addition, on November 30, 2020, the Company redeemed $8.5 million in subordinated debt that was originally acquired as part of the Xenith acquisition.

Total long-term borrowings consist of the following as of March 31, 2021 (dollars in thousands):

Spread to

Principal

3-Month LIBOR

Rate (1)

Maturity

Investment (2)

Trust Preferred Capital Securities

Trust Preferred Capital Note - Statutory Trust I

$

22,500

 

2.75

%  

2.94

%  

6/17/2034

$

696

Trust Preferred Capital Note - Statutory Trust II

 

36,000

 

1.40

%  

1.59

%  

6/15/2036

 

1,114

VFG Limited Liability Trust I Indenture

 

20,000

 

2.73

%  

2.92

%  

3/18/2034

 

619

FNB Statutory Trust II Indenture

 

12,000

 

3.10

%  

3.29

%  

6/26/2033

 

372

Gateway Capital Statutory Trust I

 

8,000

 

3.10

%  

3.29

%  

9/17/2033

 

248

Gateway Capital Statutory Trust II

 

7,000

 

2.65

%  

2.84

%  

6/17/2034

 

217

Gateway Capital Statutory Trust III

 

15,000

 

1.50

%  

1.69

%  

5/30/2036

 

464

Gateway Capital Statutory Trust IV

 

25,000

 

1.55

%  

1.74

%  

7/30/2037

 

774

MFC Capital Trust II

 

5,000

 

2.85

%  

3.04

%  

1/23/2034

 

155

Total Trust Preferred Capital Securities

$

150,500

 

  

 

  

 

  

$

4,659

Subordinated Debt(3)(4)

2026 Subordinated Debt(5)

150,000

-

%

5.00

%

12/15/2026

Total Subordinated Debt

$

150,000

Fair Value Premium (Discount)(6)

(15,081)

Investment in Trust Preferred Capital Securities

4,659

Total Long-term Borrowings

$

290,078

(1) Rate as of March 31, 2021. Calculated using non-rounded numbers.
(2) The total of the trust preferred capital securities and investments in the respective trusts represents the principal asset of the Company’s junior subordinated debt securities with like maturities and like interest rates to the capital securities. The Company’s investment in the trusts is reported in "Other Assets" on the Company’s Consolidated Balance Sheets.
(3) The remaining issuance discount as of March 31, 2021 is $1.1 million.
(4) Subordinated notes qualify as Tier 2 capital for the Company for regulatory purposes.
(5) Fixed-to-floating rate notes. On December 15, 2021, the interest rate will change to a floating rate of LIBOR plus 3.175% through its maturity date.
(6) Includes discount on issued subordinated notes.

Total long-term borrowings consist of the following as of December 31, 2020 (dollars in thousands):

Spread to

Principal

3-Month LIBOR

Rate (1)

Maturity

Investment (2)

Trust Preferred Capital Securities

Trust Preferred Capital Note - Statutory Trust I

$

22,500

 

2.75

%  

2.99

%  

6/17/2034

$

696

Trust Preferred Capital Note - Statutory Trust II

 

36,000

 

1.40

%  

1.64

%  

6/15/2036

 

1,114

VFG Limited Liability Trust I Indenture

 

20,000

 

2.73

%  

2.97

%  

3/18/2034

 

619

FNB Statutory Trust II Indenture

 

12,000

 

3.10

%  

3.34

%  

6/26/2033

 

372

Gateway Capital Statutory Trust I

 

8,000

 

3.10

%  

3.34

%  

9/17/2033

 

248

Gateway Capital Statutory Trust II

 

7,000

 

2.65

%  

2.89

%  

6/17/2034

 

217

Gateway Capital Statutory Trust III

 

15,000

 

1.50

%  

1.74

%  

5/30/2036

 

464

Gateway Capital Statutory Trust IV

 

25,000

 

1.55

%  

1.79

%  

7/30/2037

 

774

MFC Capital Trust II

 

5,000

 

2.85

%  

3.09

%  

1/23/2034

 

155

Total Trust Preferred Capital Securities

$

150,500

 

  

 

  

 

  

$

4,659

FHLB Advances

Fixed Rate Convertible

200,000

-

%

1.78

%

10/26/2028

Total FHLB Advances

$

200,000

Subordinated Debt(3)(4)

2026 Subordinated Debt(5)

150,000

-

%

5.00

%

12/15/2026

Total Subordinated Debt

$

150,000

Fair Value Premium (Discount)(6)

(15,330)

Investment in Trust Preferred Capital Securities

4,659

Total Long-term Borrowings

$

489,829

(1) Rate as of December 31, 2020. Calculated using non-rounded numbers.
(2) The total of the trust preferred capital securities and investments in the respective trusts represents the principal asset of the Company’s junior subordinated debt securities with like maturities and like interest rates to the capital securities. The Company’s investment in the trusts is reported in "Other Assets" on the Company’s Consolidated Balance Sheets.
(3) The remaining issuance discount as of December 31, 2020 is $1.2 million.
(4) Subordinated notes qualify as Tier 2 capital for the Company for regulatory purposes.
(5) Fixed-to-floating rate notes. On December 15, 2021, the interest rate will change to a floating rate of LIBOR plus 3.175% through its maturity date.
(6) Includes discount on issued subordinated notes.

As of March 31, 2021, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

  

Trust

  

  

  

  

Preferred

  

  

Fair Value

  

Total

  

Capital

  

Subordinated

  

Premium

  

 Long-term

  

Notes

  

Debt

  

(Discount) (1)

  

Borrowings

For the remaining nine months of 2021

$

$

$

(760)

$

(760)

2022

 

 

 

(1,030)

 

(1,030)

2023

 

 

 

(1,053)

 

(1,053)

2024

 

 

 

(1,078)

 

(1,078)

2025

 

 

 

(1,102)

 

(1,102)

Thereafter

 

155,159

 

150,000

 

(10,058)

 

295,101

Total long-term borrowings

$

155,159

$

150,000

$

(15,081)

$

290,078

(1) Includes discount on issued subordinated notes.