NOTE 8-Short-term Borrowings and Long-term Debt

 

The schedule below provides a summary of short-term borrowings that consist of securities sold under agreements to repurchase, federal funds purchased and other borrowings.  Securities sold under agreements to repurchase are overnight borrowings between PeoplesBank and its commercial depositors and are subject to daily repricing.  Federal Funds purchased from correspondent banks mature in one business day and reprice daily based on the Federal Funds rate.  As of December 31, 2014, PeoplesBank’s total availability under Federal Funds lines was $8 million.  Other short-term borrowings consist of credit available through the Federal Home Loan Bank of Pittsburgh (FHLBP) and the Federal Reserve Discount Window.  PeoplesBank maintains a line-of credit (Open Repo Plus) with the FHLBP which is a revolving term commitment used on an overnight basis.  The term of this commitment may not exceed 364 days and it reprices daily at market rates.  Under terms of a blanket collateral agreement with the FHLBP, the line-of-credit and long term advances are secured by FHLBP stock and qualifying loan receivables, principally real estate secured loans.  As of December 31, 2014, PeoplesBank’s total availability was $297 million with the FHLBP and collateralized availability of $12 million with the Federal Reserve Discount Window. 

 

The Corporation maintains a $3 million line of credit with ACNB Bank to provide a source of liquidity.  The line, renewable annually, is secured by a first lien on the Codorus Valley Corporate Center.  The interest rate on the ACNB Bank line is Wall Street Journal Prime.  No draws have been made on the line and on December 31, 2014 and 2013, the balance was zero.

 

The following table presents a summary of aggregate short-term borrowings as of and for the years ended December 31, 2014, 2013 and 2012.

 

 

Securities that serve as collateral for securities sold under agreements to repurchase and pledged to provide access to the Federal Reserve Bank Discount Window and other short-term borrowing remain in available-for-sale securities.  The fair value of these securities was $55,006,000 and $45,419,000 on December 31, 2014 and 2013, respectively.

The following table presents a summary of long-term debt as of December 31, 2014 and 2013:

 

PeoplesBank’s long-term debt obligations to FHLBP are fixed rate instruments.

 

In June 2006, Codorus Valley formed CVB Statutory Trust No. 2, a wholly-owned special purpose subsidiary whose sole purpose was to facilitate a pooled trust preferred debt issuance of $7,217,000.  

In November 2004, Codorus Valley formed CVB Statutory Trust No. 1 to facilitate a pooled trust preferred debt issuance of $3,093,000.  The Corporation owns all of the common stock of these nonbank subsidiaries, and the debentures are the sole assets of the Trusts.  The accounts of both Trusts are not consolidated for financial reporting purposes in accordance with FASB ASC 810.  For regulatory capital purposes, all of the Corporation’s trust preferred securities qualified as Tier 1 capital for all reported periods.  Trust preferred securities are subject to capital limitations under the FDIC’s risk-based capital guidelines.  The Corporation used the net proceeds from these offerings to fund its operations.

 

Total long-term debt maturities over the next five years are as follows:  $5,096,000 in 2015, $35,000,000 in 2016, $15,000,000 in 2017, $20,000,000 in 2018 and $5,000,000 in 2019.