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Note 9 - Borrowed Funds and Securities Sold Under Agreements to Repurchase

12 Months Ended

Dec. 31, 2015

Disclosure Text Block [Abstract]

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

9. Borrowed Funds and Securities Sold Under Agreements to Repurchase

Borrowed funds and securities sold under agreements to repurchase are summarized as follows at December 31:

		2015								2014
		Amount				Weighted Average Rate				Amount				Weighted Average Rate
		(Dollars in thousands)

Repurchase agreements - fixed rate:
Due in 2016		$	38,000				1.92	%		$	38,000				1.92	%
Due in 2017			38,000				4.16				38,000				4.16
Due in 2020			40,000				3.45				40,000				3.45

Total repurchase agreements - fixed rate			116,000				3.18				116,000				3.18

FHLB-NY advances - fixed rate:
Due in 2015			-				-				185,551				0.80
Due in 2016			386,152				1.04				315,847				1.15
Due in 2017			250,708				1.29				305,525				2.12
Due in 2018			265,088				1.30				74,798				1.29
Due in 2019			94,710				1.64				30,000				1.83
Due in 2020			110,000				2.98				-				-
Total FHLB-NY advances - fixed rate			1,106,658				1.40				911,721				1.44

Other Borrowings
Due in 2016			20,000				0.56				-				-

Junior subordinated debentures - adjustable rate
Due in 2037			29,018				5.67				28,771				5.96

Total borrowings		$	1,271,676				1.65	%		$	1,056,492				1.75	%

During 2015, $80.0 million in FHLB-NY fixed rate advances modified from an average cost of 4.41% to an average cost of 3.46%. This modification extended the maturity on the advances by an average of 2.3 years without incurring a prepayment penalty.

At December 31, 2015, the Bank was able to borrow up to $2,478.8 million from the FHLB-NY in Federal Home Loan Bank advances and letters of credit. As of December 31, 2015, the Bank had $1,601.1 million outstanding in combined balances of FHLB-NY advances and letters of credit. At December 31, 2015, the Bank also has unsecured lines of credit with other commercial banks totaling $60.0 million.

Borrowings which have call provisions are summarized as follows at December 31, 2015:

Amount

Rate

Maturity Date

Call Date

(Dollars in thousands)

FHLB-NY advances - fixed rate

$

30,000

3.60

%

1/23/2020

1/23/2016

FHLB-NY advances - fixed rate

20,000

3.49

1/23/2020

1/25/2016

FHLB-NY advances - fixed rate

10,000

3.37

1/27/2020

1/26/2016

FHLB-NY advances - fixed rate

10,000

3.28

1/27/2020

1/26/2016

FHLB-NY advances - fixed rate

10,000

3.25

1/28/2020

1/28/2016

Repurchase agreements - fixed rate

20,000

2.20

7/12/2016

1/12/2016

Repurchase agreements - fixed rate

18,000

4.28

10/18/2017

1/19/2016

Repurchase agreements - fixed rate

18,000

1.60

4/19/2016

1/19/2016

Repurchase agreements - fixed rate

10,000

3.08

8/1/2020

2/1/2016

Repurchase agreements - fixed rate

10,000

3.19

2/1/2020

2/1/2016

Repurchase agreements - fixed rate

20,000

3.76

8/1/2020

2/1/2016

Repurchase agreements - fixed rate

20,000

4.05

9/19/2017

3/21/2016

As part of the Company’s strategy to finance investment opportunities and manage its cost of funds, the Company enters into repurchase agreements with broker-dealers and the FHLB-NY. These agreements are recorded as financing transactions and the obligations to repurchase are reflected as a liability in the Consolidated Statements of Financial Condition. The securities underlying the agreements are delivered to the broker-dealers or the FHLB-NY who arrange the transaction. The securities remain registered in the name of the Company and are returned upon the maturity of the agreement. The Company retains the right of substitution of collateral throughout the terms of the agreements. As a condition of the repurchase agreements the Company is required to provide sufficient collateral. If the fair value of the collateral were to fall below the required level, the Company is obligated to pledge additional collateral. All the repurchase agreements are collateralized by mortgage-backed securities.

Information relating to these agreements at or for the years ended December 31 is as follows:

		2015				2014				2013
		(Dollars in thousands)
Book value of collateral		$	131,421			$	142,925			$	199,447
Estimated fair value of collateral			131,421				142,925				199,447
Average balance of outstanding agreements during the year			116,000				137,824				172,944
Maximum balance of outstanding agreements at a month end during the year			116,000				155,300				185,300
Average interest rate of outstanding agreements during the year ⁽¹⁾			3.22	%			5.37	%			3.42	%

1.

During the year ended December 31, 2014, the Company prepaid $30.0 million in FHLB-NY repurchase agreements at an average cost of 4.98% while incurring a prepayment penalty totaling $2.7 million. Excluding the prepayment penalty, the average interest rate of agreements during the year ended December 31, 2014 was 3.40%.

Pursuant to a blanket collateral agreement with the FHLB-NY, advances are secured by all of the Bank’s stock in the FHLB-NY and certain qualifying mortgage loans in an amount at least equal to 110% of the advances outstanding. The Bank may also pledge mortgage-backed and mortgage-related securities, and other securities not otherwise pledged.

The Holding Company has three trusts formed under the laws of the State of Delaware for the purpose of issuing capital and common securities, and investing the proceeds thereof in junior subordinated debentures of the Holding Company. Each of these trusts issued $20.6 million of securities which had a fixed-rate for the first five years, after which they reset quarterly based on a spread over 3-month LIBOR. The securities were first callable at par after five years, and pay cumulative dividends. The Holding Company has guaranteed the payment of these trusts’ obligations under their capital securities. The terms of the junior subordinated debentures are the same as those of the capital securities issued by the trusts. The junior subordinated debentures issued by the Holding Company are carried at fair value in the consolidated financial statements.

The table below shows the terms of the securities issued by the trusts.

		Flushing Financial Capital Trust II				Flushing Financial Capital Trust III				Flushing Financial Capital Trust IV
Issue Date			June 20, 2007				June 21, 2007				July 3, 2007
Initial Rate			7.14	%			6.89	%			6.85	%
First Reset Date			September 1, 2012				June 15, 2012				July 30, 2012
Spread over 3-month LIBOR			1.41	%			1.44	%			1.42	%
Maturity Date			September 1, 2037				September 15, 2037				July 30, 2037

The consolidated financial statements do not include the securities issued by the trusts, but rather include the junior subordinated debentures of the Holding Company.