Annual report pursuant to Section 13 and 15(d)

BORROWINGS

v3.24.0.1
BORROWINGS
12 Months Ended
Dec. 31, 2023
Borrowings [Abstract]  
BORROWINGS

8. BORROWINGS

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

2023

2022

 

Securities sold under agreements to repurchase

$

110,833

$

142,837

Federal Funds Purchased

90,000

160,000

FHLB Advances

 

720,000

 

1,016,000

Total short-term borrowings

$

920,833

$

1,318,837

Average outstanding balance during the period

$

573,553

$

302,060

Average interest rate during the period

 

4.73

%  

 

1.79

%

Average interest rate at end of period

 

5.15

%  

 

3.89

%

The Bank maintains federal funds lines with several correspondent banks; the available balance was $682.0 million and $1.0 billion at December 31, 2023 and 2022, respectively. The Company maintains an alternate line of credit at a correspondent bank; the available balance was $25.0 million at both December 31, 2023 and 2022. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and was in compliance with these covenants as of December 31, 2023 and 2022. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $6.2 billion at December 31, 2023 and $6.0 billion at December 31, 2022. The Company’s secured line of credit capacity totaled $1.7 billion and $1.8 billion, of which $989,000 and $814,000 was available at December 31, 2023 and December 31, 2022, respectively. Refer to Note 9 “Commitments and Contingencies” in this Form 10-K for additional information on the Company’s pledged collateral.

Starting in the first quarter of 2023, the Company was eligible to borrow from the Federal Reserve's BTFP, which provides additional contingent liquidity through the pledging of certain qualifying securities. The BTFP is a one-year program ending March 11, 2024, and the Company can borrow any time during the term and can repay the obligation at any time without penalty. As of December 31, 2023, liquidity of $522.9 million was available based on the par-value of qualifying securities from BTFP. The Company had not utilized the BTFP facility as of December 31, 2023.

Long-term Borrowings

In connection with several previous bank acquisitions, the Company issued $58.5 million and acquired $92.0 million of trust preferred capital notes. The remaining fair value discount on all acquired trust preferred capital notes was $11.7 million and $12.5 million at December 31, 2023 and 2022, respectively.

Total long-term borrowings consist of the following as of December 31, 2023 (dollars in thousands):

Spread to

Principal

3-Month SOFR (1)

Rate (2)

Maturity

Investment (3)

Trust Preferred Capital Securities

Trust Preferred Capital Note - Statutory Trust I

$

22,500

 

2.75

%  

8.34

%  

6/17/2034

$

696

Trust Preferred Capital Note - Statutory Trust II

 

36,000

 

1.40

%  

6.99

%  

6/15/2036

 

1,114

VFG Limited Liability Trust I Indenture

 

20,000

 

2.73

%  

8.32

%  

3/18/2034

 

619

FNB Statutory Trust II Indenture

 

12,000

 

3.10

%  

8.69

%  

6/26/2033

 

372

Gateway Capital Statutory Trust I

 

8,000

 

3.10

%  

8.69

%  

9/17/2033

 

248

Gateway Capital Statutory Trust II

 

7,000

 

2.65

%  

8.24

%  

6/17/2034

 

217

Gateway Capital Statutory Trust III

 

15,000

 

1.50

%  

7.09

%  

5/30/2036

 

464

Gateway Capital Statutory Trust IV

 

25,000

 

1.55

%  

7.14

%  

7/30/2037

 

774

MFC Capital Trust II

 

5,000

 

2.85

%  

8.44

%  

1/23/2034

 

155

Total Trust Preferred Capital Securities

$

150,500

 

  

 

  

 

  

$

4,659

Subordinated Debt (4)

2031 Subordinated Debt

250,000

%

2.875

%

12/15/2031

Total Subordinated Debt (5)

$

250,000

Fair Value Discount (6)

(14,134)

Investment in Trust Preferred Capital Securities

4,659

Total Long-term Borrowings

$

391,025

(1) As part of the adoption of ASC 848, the index changed from the 3-month LIBOR to the 3-month CME SOFR + 0.262% in the third quarter of 2023. For more information on ASC 848, refer to Note 1 “Summary of Significant Accounting Policies” in this Form 10-K.

(2) Rate as of December 31, 2023. Calculated using non-rounded numbers.

(3) Represents the junior subordinated debentures owned by the Company in trust and is reported in "Other assets" on the Company’s Consolidated Balance Sheets.

(4) Subordinated notes qualify as Tier 2 capital for the Company for regulatory purposes.

(5) Fixed-to-floating rate notes. On December 15, 2026, the interest rate changes to a floating rate of the then current Three-Month Term SOFR plus a spread of 186 bps through its maturity date or earlier redemption. The notes may be redeemed before maturity on any interest payment date occurring on or after December 15, 2026.

(6) Remaining discounts of $11.7 million and $2.5 million on Trust Preferred Capital Securities and Subordinated Debt, respectively.

Total long-term borrowings consist of the following as of December 31, 2022 (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

%  

7.52

%  

6/17/2034

$

696

Trust Preferred Capital Note - Statutory Trust II

 

36,000

 

1.40

%  

6.17

%  

6/15/2036

 

1,114

VFG Limited Liability Trust I Indenture

 

20,000

 

2.73

%  

7.50

%  

3/18/2034

 

619

FNB Statutory Trust II Indenture

 

12,000

 

3.10

%  

7.87

%  

6/26/2033

 

372

Gateway Capital Statutory Trust I

 

8,000

 

3.10

%  

7.87

%  

9/17/2033

 

248

Gateway Capital Statutory Trust II

 

7,000

 

2.65

%  

7.42

%  

6/17/2034

 

217

Gateway Capital Statutory Trust III

 

15,000

 

1.50

%  

6.27

%  

5/30/2036

 

464

Gateway Capital Statutory Trust IV

 

25,000

 

1.55

%  

6.32

%  

7/30/2037

 

774

MFC Capital Trust II

 

5,000

 

2.85

%  

7.62

%  

1/23/2034

 

155

Total Trust Preferred Capital Securities

$

150,500

 

  

 

  

 

  

$

4,659

Subordinated Debt (3)(4)

2031 Subordinated Debt

250,000

%

2.875

%

12/15/2031

Total Subordinated Debt (5)

$

250,000

Fair Value Discount (6)

(15,296)

Investment in Trust Preferred Capital Securities

4,659

Total Long-term Borrowings

$

389,863

(1) Rate as of December 31, 2022. 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, 2022 is $2.8 million.

(4) Subordinated notes qualify as Tier 2 capital for the Company for regulatory purposes.

(5) Fixed-to-floating rate notes. On December 15, 2026, the interest rate changes to a floating rate of the then current Three-Month Term SOFR plus a spread of 186 bps through its maturity date or earlier redemption. The notes may be redeemed before maturity on any interest payment date occurring on or after December 15, 2026.

(6) Remaining discounts of $12.5 million and $2.8 million on Trust Preferred Capital Securities and Subordinated Debt, respectively.

As of December 31, 2023, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

  

Trust

  

  

  

  

Preferred

  

  

  

Total

  

Capital

  

Subordinated

  

Fair Value

  

 Long-term

  

Notes

  

Debt

  

Discount (1)

  

Borrowings

2024

$

$

$

(1,187)

$

(1,187)

2025

 

 

 

(1,211)

 

(1,211)

2026

 

 

 

(1,236)

 

(1,236)

2027

 

 

 

(1,263)

 

(1,263)

2028

(1,293)

 

(1,293)

Thereafter

 

155,159

 

250,000

 

(7,944)

 

397,215

Total long-term borrowings

$

155,159

$

250,000

$

(14,134)

$

391,025

(1) Includes discount on Trust Preferred Capital Securities and Subordinated Debt.