Note 10 - Short-term Borrowings and Long-term FHLB Advances
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Federal Home Loan Bank Advances, Disclosure [Text Block]
Note
10
- Short-Term Borrowings and Long-Term FHLB Advances
 
A. Short-term borrowings –
As of
December
31,
2016
and
2015,
the Corporation had
$204.2
million and
$94.2
million of short-term borrowings (original maturity of
one
year or less), respectively, which consisted of funds obtained from overnight repurchase agreements with commercial customers, an overnight repurchase agreement with a correspondent bank, short-term FHLB advances and overnight federal funds.
 
A summary of short-term borrowings is as follows:
 
 
 
As of December 31,
 
(dollars in thousands)
 
2016
 
 
2015
 
Repurchase agreements* – commercial customers
   $
39,151
     $
29,156
  
Repurchase agreement – correspondent bank
    
—
      
5,011
  
Short-term FHLB advances
    
165,000
      
30,000
  
Overnight federal funds
   
—
      
30,000
  
Total short-term borrowings
  $
204,151
     $
94,167
  
*
overnight repurchase agreements with no expiration date
 
The following table sets forth information concerning short-term borrowings:
 
 
 
As of or Twelve Months Ended
December 31,
 
(dollars in thousands)
 
2016
 
 
2015
 
Balance at period-end
   $
204,151
     $
94,167
  
Maximum amount outstanding at any month end
   $
204,151
     $
94,167
  
Average balance outstanding during the period
   $
37,041
     $
36,010
  
Weighted-average interest rate:
                
As of the period-end
   
0.66
%
    
0.56
%
Paid during the period
   
0.25
%
    
0.13
%
 
 
Average balances outstanding during the year represent daily average balances and average interest rates represent interest expense divided by the related average balance.
 
 
 
B.
Long-term
FHLB Advances:
 
As of
December
31,
2016
and
2015,
the Corporation had
$189.7
million and
$254.9
million, respectively, of long-term FHLB advances (original maturities exceeding
one
year).
 
The following table presents the remaining periods until maturity of the long-term FHLB advances:
 
 
 
As of December 31,
 
(dollars in thousands)
 
2016
 
 
2015
 
Within one year
   $
75,000
     $
75,000
  
Over one year through five years
   
114,742
      
179,863
  
Total
  $
189,742
     $
254,863
  
 
The following table presents rate and maturity information on FHLB advances and other borrowings:
 
 
Maturity Range*
 
 
Weighted Average
 
 
Coupon
Rate
 
 
Balance at December 31,
 
Description
From
 
To
 
 
Rate
 
 
From
 
 
To
 
 
2016
 
 
2015
 
Bullet maturity – fixed rate
02/01/17
  
12/09/20
      
1.44
%
    
0.80
%
    
2.13
%
    
153,612
      
198,612
  
Bullet maturity – variable rate
11/28/17
  
11/28/17
      
1.08
%
    
1.08
%
    
1.08
%
    
15,000
      
35,000
  
Convertible-fixed
01/03/18
  
08/20/18
      
2.94
%
    
2.58
%
    
3.50
%
    
21,130
      
21,251
  
Total
 
  
 
      
 
      
 
      
 
     $
189,742
     $
254,863
  
 
*Maturity range
and interest rates
refers to
December
31,
2016
balances
**Loans from correspondent banks other than FHLB
 
Included in the table above as of
December
31,
2016
and
2015
are
$21.1
million and
$21.3
million, respectively, of long-term FHLB advances whereby the FHLB has the option, at predetermined times, to convert the fixed interest rate to an adjustable interest rate indexed to the London Interbank Offered Rate (“LIBOR”). The Corporation has the option to prepay these advances, without penalty, if the FHLB elects to convert the interest rate to an adjustable rate. As of
December
31,
2016,
substantially all the FHLB advances with this convertible feature are subject to conversion in fiscal
2017.
These advances are included in the periods in which they mature, rather than the period in which they are subject to conversion.
 
C. Other Information
–In connection with its FHLB borrowings, the Corporation is required to hold the capital stock of the FHLB. The amount of capital stock held was
$17.3
million at
December
31,
2016,
and
$12.9
 million at
December
31,
2015.
The carrying amount of the FHLB stock approximates its redemption value.
 
The level of required investment in FHLB stock is based on the balance of outstanding loans the Corporation has from the FHLB. Although FHLB stock is a financial instrument that represents an equity interest in the FHLB, it does not have a readily determinable fair value. FHLB stock is generally viewed as a long-term investment. Accordingly, when evaluating FHLB stock for impairment, its value should be determined based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value.
 
The Corporation had a maximum borrowing capacity (“MBC”) with the FHLB of
$1.22
billion as of
December
31,
2016
of which the unused capacity was
$886.0
 million. In addition there were
$79.0
 million in overnight federal funds line,
$117.3
million of Federal Reserve Discount Window capacity and
$5.0
million in a correspondent bank line of credit.