| BORROWINGS |
7. 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 securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold, advances from the FHLB, federal funds purchased (which are secured overnight borrowings from other financial institutions), and other lines of credit.
Total short-term borrowings consist of the following as of the periods ended (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2024 |
|
2023 |
|
Securities sold under agreements to repurchase |
|
$ |
59,227 |
|
$ |
110,833 |
|
Federal Funds Purchased |
|
|
— |
|
|
90,000 |
|
FHLB Advances |
|
|
375,000 |
|
|
720,000 |
|
Total short-term borrowings |
|
$ |
434,227 |
|
$ |
920,833 |
|
|
|
|
|
|
|
|
|
Average outstanding balance during the period |
|
$ |
554,926 |
|
$ |
573,553 |
|
Average interest rate during the period |
|
|
5.31 |
% |
|
4.73 |
% |
Average interest rate at end of period |
|
|
5.14 |
% |
|
5.15 |
% |
The Company maintains federal funds lines with several correspondent banks; the available balance was $597.0 million and $682.0 million, respectively, at September 30, 2024 and December 31, 2023. The Company also maintains an alternate line of credit at a correspondent bank, and the available balance was $25.0 million at both September 30, 2024 and December 31, 2023. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $7.4 billion at September 30, 2024 and $6.2 billion at December 31, 2023. The Company’s secured line of credit capacity totaled $3.0 billion and $1.7 billion, of which $2.3 billion and $988.7 million were available at September 30, 2024 and December 31, 2023, respectively.
Refer to Note 8 “Commitments and Contingencies” for additional information on the Company’s pledged collateral. 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 September 30, 2024 and December 31, 2023.
Long-term Borrowings
As part of the American National acquisition, the Company assumed junior subordinated debenture obligations related to several trusts that issued the obligations to several trust preferred capital securities totaling $28.5 million in total principal amount. Refer to the table below for contractual rates and maturity terms.
Total long-term borrowings consist of the following as of September 30, 2024 (dollars in thousands):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spread to |
|
|
|
|
|
|
|
|
|
Principal |
|
|
3-Month SOFR |
|
Rate (3) |
|
Maturity |
|
Investment (4) |
Trust Preferred Capital Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Preferred Capital Note – Statutory Trust I |
|
$ |
22,500 |
|
|
2.75 |
% (1) |
|
7.60 |
% |
6/17/2034 |
|
$ |
696 |
Trust Preferred Capital Note – Statutory Trust II |
|
|
36,000 |
|
|
1.40 |
% (1) |
|
6.25 |
% |
6/15/2036 |
|
|
1,114 |
VFG Limited Liability Trust I Indenture |
|
|
20,000 |
|
|
2.73 |
% (1) |
|
7.58 |
% |
3/18/2034 |
|
|
619 |
FNB Statutory Trust II Indenture |
|
|
12,000 |
|
|
3.10 |
% (1) |
|
7.95 |
% |
6/26/2033 |
|
|
372 |
Gateway Capital Statutory Trust I |
|
|
8,000 |
|
|
3.10 |
% (1) |
|
7.95 |
% |
9/17/2033 |
|
|
248 |
Gateway Capital Statutory Trust II |
|
|
7,000 |
|
|
2.65 |
% (1) |
|
7.50 |
% |
6/17/2034 |
|
|
217 |
Gateway Capital Statutory Trust III |
|
|
15,000 |
|
|
1.50 |
% (1) |
|
6.35 |
% |
5/30/2036 |
|
|
464 |
Gateway Capital Statutory Trust IV |
|
|
25,000 |
|
|
1.55 |
% (1) |
|
6.40 |
% |
7/30/2037 |
|
|
774 |
MFC Capital Trust II |
|
|
5,000 |
|
|
2.85 |
% (1) |
|
7.70 |
% |
1/23/2034 |
|
|
155 |
AMNB Statutory Trust I (5) |
|
|
20,000 |
|
|
1.35 |
% (1) |
|
6.20 |
% |
6/30/2036 |
|
|
619 |
MidCarolina Trust I (5) |
|
|
5,000 |
|
|
3.45 |
% (2) |
|
8.04 |
% |
11/7/2032 |
|
|
155 |
MidCarolina Trust II (5) |
|
|
3,500 |
|
|
2.95 |
% (2) |
|
7.54 |
% |
1/7/2034 |
|
|
109 |
Total Trust Preferred Capital Securities |
|
$ |
179,000 |
|
|
|
|
|
|
|
|
|
$ |
5,542 |
Subordinated Debt (6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2031 Subordinated Debt |
|
|
250,000 |
|
|
— |
% |
|
2.875 |
% |
12/15/2031 |
|
|
|
Total Subordinated Debt (7) |
|
$ |
250,000 |
|
|
|
|
|
|
|
|
|
|
|
Fair Value Discount (8) |
|
|
(16,605) |
|
|
|
|
|
|
|
|
|
|
|
Investment in Trust Preferred Capital Securities |
|
|
5,542 |
|
|
|
|
|
|
|
|
|
|
|
Total Long-term Borrowings |
|
$ |
417,937 |
|
|
|
|
|
|
|
|
|
|
|
(1) Three-Month CME SOFR + 0.262%.
(2) Three-Month CME SOFR.
(3) Rate as of September 30, 2024. Calculated using non-rounded numbers.
(4) Represents the junior subordinated debentures owned by the Company in trust and is reported in “Other assets” on the Company’s Consolidated Balance Sheets.
(5) Assumed in the American National acquisition and adjusted to fair value at the time of acquisition.
(6) Subordinated notes qualify as Tier 2 capital for the Company for regulatory purposes.
(7) 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.
(8) Remaining discounts of $14.4 million and $2.2 million on Trust Preferred Capital Securities and Subordinated Debt, respectively.
Total long-term borrowings consist of the following as of December 31, 2023 (dollars in thousands):
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|
|
|
|
|
|
|
|
|
|
|
|
|
Spread to |
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|
|
|
|
|
|
|
|
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) Three-Month CME SOFR + 0.262%.
(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 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.
As of September 30, 2024, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Trust |
|
|
|
|
|
|
|
|
Preferred |
|
|
|
|
|
Total |
|
|
Capital |
|
Subordinated |
|
Fair Value |
|
Long-term |
|
|
Notes |
|
Debt |
|
Discount (1) |
|
Borrowings |
For the remaining three months of 2024 |
|
$ |
— |
|
$ |
— |
|
$ |
(366) |
|
$ |
(366) |
2025 |
|
|
— |
|
|
— |
|
|
(1,481) |
|
|
(1,481) |
2026 |
|
|
— |
|
|
— |
|
|
(1,510) |
|
|
(1,510) |
2027 |
|
|
— |
|
|
— |
|
|
(1,541) |
|
|
(1,541) |
2028 |
|
|
— |
|
|
— |
|
|
(1,575) |
|
|
(1,575) |
Thereafter |
|
|
184,542 |
|
|
250,000 |
|
|
(10,132) |
|
|
424,410 |
Total long-term borrowings |
|
$ |
184,542 |
|
$ |
250,000 |
|
$ |
(16,605) |
|
$ |
417,937 |
(1) Includes discount on Trust Preferred Capital Securities and Subordinated Debt.
|