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BORROWINGS | 6 Months Ended
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Jun. 30, 2019
Debt Disclosure [Abstract] |
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 advances from the FHLB, federal funds purchased (which are secured overnight borrowings from other financial institutions), and other lines of credit. Also included in total short-term borrowings are securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold. Total short-term borrowings consist of the following as of June 30, 2019 and December 31, 2018 (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | December 31, |
​ | ​ | 2019 | ​ | 2018 |
Securities sold under agreements to repurchase | ​ | $ | 70,870 | ​ | $ | 39,197 | ​
Federal Funds Purchased | ​ | ​ | 45,000 | ​ | ​ | — | ​
FHLB Advances | ​ |  | 573,050 | ​ |  | 1,043,600 | ​
Other short-term borrowings | ​ |  | — | ​ |  | 5,000 | ​
Total short-term borrowings | ​ | $ | 688,920 | ​ | $ | 1,087,797 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Maximum month-end outstanding balance | ​ | $ | 1,201,143 | ​ | $ | 1,087,797 | ​
Average outstanding balance during the period | ​ |  | 998,976 | ​ |  | 968,014 | ​
Average interest rate (during the period) | ​ |  | 2.45 | % |  | 1.91 | %
Average interest rate at end of period | ​ |  | 2.29 | % |  | 2.43 | %
​ The Bank maintains federal funds lines with several correspondent banks, the remaining available balance of which was $557.0 million and $382.0 million at June 30, 2019 and December 31, 2018, respectively. The Company maintains an alternate line of credit at a correspondent bank, the available balance of which was $25.0 million at both June 30, 2019 and December 31, 2018. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with such covenants as of June 30, 2019. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $5.1 billion and $4.0 billion at June 30, 2019 and December 31, 2018, respectively. Long-term Borrowings In connection with several previous bank acquisitions, the Company issued and acquired trust preferred capital notes of $58.5 million and $87.0 million, respectively. Most recently, in connection with the acquisition of Access on February 1, 2019, the Company acquired additional trust preferred capital notes totaling $5.0 million. The remaining fair value discount on all acquired trust preferred capital notes was $15.3 million at June 30, 2019. The trust preferred capital notes currently qualify for Tier 2 capital of the Company for regulatory purposes. Trust preferred capital notes consist of the following as of June 30, 2019:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Trust |  | ​ | ​ |  | ​ |  | ​ |  | ​
​ | ​ | Preferred | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Capital | ​ | ​ | ​ | ​ | Spread to | ​ | ​ | ​ | ​
​ | ​ | Securities (1) | ​ | Investment (1) | ​ | 3-Month LIBOR | ​ | Rate (2) | ​ | Maturity
Trust Preferred Capital Note - Statutory Trust I | ​ | $ | 22,500,000 | ​ | $ | 696,000 |  | 2.75 | % | 5.07 | % | 6/17/2034
Trust Preferred Capital Note - Statutory Trust II | ​ |  | 36,000,000 | ​ |  | 1,114,000 |  | 1.40 | % | 3.72 | % | 6/15/2036
VFG Limited Liability Trust I Indenture | ​ |  | 20,000,000 | ​ |  | 619,000 |  | 2.73 | % | 5.05 | % | 3/18/2034
FNB Statutory Trust II Indenture | ​ |  | 12,000,000 | ​ |  | 372,000 |  | 3.10 | % | 5.42 | % | 6/26/2033
Gateway Capital Statutory Trust I | ​ |  | 8,000,000 | ​ |  | 248,000 |  | 3.10 | % | 5.42 | % | 9/17/2033
Gateway Capital Statutory Trust II | ​ |  | 7,000,000 | ​ |  | 217,000 |  | 2.65 | % | 4.97 | % | 6/17/2034
Gateway Capital Statutory Trust III | ​ |  | 15,000,000 | ​ |  | 464,000 |  | 1.50 | % | 3.82 | % | 5/30/2036
Gateway Capital Statutory Trust IV | ​ |  | 25,000,000 | ​ |  | 774,000 |  | 1.55 | % | 3.87 | % | 7/30/2037
MFC Capital Trust II | ​ |  | 5,000,000 | ​ |  | 155,000 |  | 2.85 | % | 5.17 | % | 1/23/2034
Total | ​ | $ | 150,500,000 | ​ | $ | 4,659,000 |  |  |  |  |  |
(1) | 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.
(2) | Rate as of June 30, 2019.
During the fourth quarter of 2016, the Company issued $150.0 million of fixed-to-floating rate subordinated notes with an initial fixed interest rate of 5.00% through December 15, 2021. The interest rate then changes to a floating rate of LIBOR plus 3.175% through its maturity date on December 15, 2026. In connection with the acquisition of Xenith on January 1, 2018, the Company acquired $8.5 million of subordinated notes with a fair value premium of $259,000, which was $103,000 at June 30, 2019. The acquired subordinated notes have a fixed interest rate of 6.75% and a maturity date of June 30, 2025. At June 30, 2019 and December 31, 2018, the contractual principal reported for subordinated notes was $158.5 million; remaining issuance discount as of June 30, 2019 and December 31, 2018 is $1.5 million and $1.6 million, respectively. The subordinated notes qualify as Tier 2 capital for the Company for regulatory purposes. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with the acquired subordinated notes and is considered to be in compliance with these covenants as of June 30, 2019. On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances, which resulted in reducing the Company’s FHLB borrowing costs. In connection with this modification, the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings on the Company’s Consolidated Balance Sheet. In accordance with ASC 470-50, Modifications and Extinguishments, the Company is amortizing this prepayment penalty over the term of the modified advances using the effective rate method. The amortization expense is included as a component of interest expense on long-term borrowings on the Company’s Consolidated Statements of Income. Amortization expense for the three and six months ended June 30, 2019 and 2018 was $501,562 and $994,000 and $490,000 and $971,000 respectively. As of June 30, 2019, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Spread to |  | ​ |  | ​ |  | ​ | ​
​ | ​ | 3-Month | ​ | Interest | ​ | ​ | ​ | ​ | ​
Long-term Type | ​ | LIBOR | ​ | Rate (1) | ​ | Maturity Date | ​ | Advance Amount
Adjustable Rate Credit |  | 0.44 | % | 2.76 | % | 8/23/2022 | ​ | $ | 55,000
Adjustable Rate Credit |  | 0.45 | % | 2.77 | % | 11/23/2022 | ​ |  | 65,000
Adjustable Rate Credit |  | 0.45 | % | 2.77 | % | 11/23/2022 | ​ |  | 10,000
Adjustable Rate Credit |  | 0.45 | % | 2.77 | % | 11/23/2022 | ​ |  | 10,000
Convertible Flipper | ​ | (0.50) | % | 1.82 | % | 5/15/2024 | ​ | ​ | 200,000
Convertible Flipper | ​ | (0.75) | % | 1.57 | % | 5/22/2029 | ​ | ​ | 150,000
Convertible Flipper | ​ | (0.75) | % | 1.57 | % | 5/30/2029 | ​ | ​ | 50,000
Convertible Flipper | ​ | (0.75) | % | 1.57 | % | 6/21/2029 | ​ | ​ | 100,000
Fixed Rate Convertible |  | - |  | 1.78 | % | 10/26/2028 | ​ |  | 200,000
Fixed Rate Hybrid |  | - |  | 2.37 | % | 10/10/2019 | ​ |  | 25,000
Fixed Rate Hybrid |  | - |  | 1.58 | % | 5/18/2020 | ​ |  | 20,000
Fixed Rate Hybrid |  | - |  | 2.65 | % | 10/24/2019 | ​ |  | 25,000
Fixed Rate Credit |  | - |  | 1.54 | % | 10/2/2020 | ​ |  | 10,000
Fixed Rate Credit |  | - |  | 1.32 | % | 10/2/2019 | ​ |  | 10,000
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 930,000
(1) | Interest rates calculated using non-rounded numbers.
As of December 31, 2018, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Spread to |  | ​ |  | ​ |  | ​ | ​
​ | ​ | 3-Month | ​ | Interest | ​ | ​ | ​ | ​ | ​
Long-term Type | ​ | LIBOR | ​ | Rate (1) | ​ | Maturity Date | ​ | Advance Amount
Adjustable Rate Credit |  | 0.44 | % | 3.25 | % | 8/23/2022 | ​ | $ | 55,000
Adjustable Rate Credit |  | 0.45 | % | 3.26 | % | 11/23/2022 | ​ |  | 65,000
Adjustable Rate Credit |  | 0.45 | % | 3.26 | % | 11/23/2022 | ​ |  | 10,000
Adjustable Rate Credit |  | 0.45 | % | 3.26 | % | 11/23/2022 | ​ |  | 10,000
Fixed Rate Convertible |  | - |  | 1.78 | % | 10/26/2028 | ​ |  | 200,000
Fixed Rate Hybrid |  | - |  | 2.37 | % | 10/10/2019 | ​ |  | 25,000
Fixed Rate Hybrid |  | - |  | 1.58 | % | 5/18/2020 | ​ |  | 20,000
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 385,000
(1) | Interest rates calculated using non-rounded numbers.
For information on the carrying value of loans and securities pledged as collateral on FHLB advances as of June 30, 2019 and December 31, 2018, refer to Note 8 "Commitments and Contingencies." As of June 30, 2019, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Trust |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | Preferred | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Fair Value | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Capital | ​ | Subordinated | ​ | FHLB | ​ | Premium | ​ | Prepayment | ​ | Total Long-term
​ | ​ | Notes | ​ | Debt | ​ | Advances | ​ | (Discount) (1) | ​ | Penalty | ​ | Borrowings
For the remaining six months of 2019 | ​ | $ | — | ​ | $ | — | ​ | $ | 60,000 | ​ | $ | (321) | ​ | $ | (1,024) | ​ | $ | 58,655
2020 | ​ |  | — | ​ |  | — | ​ |  | 30,000 | ​ |  | (834) | ​ |  | (2,074) | ​ |  | 27,092
2021 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (1,008) | ​ |  | (2,119) | ​ |  | (3,127)
2022 | ​ |  | — | ​ |  | — | ​ |  | 140,000 | ​ |  | (1,030) | ​ |  | (1,707) | ​ |  | 137,263
2023 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (1,053) | ​ |  | — | ​ |  | (1,053)
Thereafter | ​ |  | 155,159 | ​ |  | 158,500 | ​ |  | 700,000 | ​ |  | (12,238) | ​ |  | — | ​ |  | 1,001,421
Total long-term borrowings | ​ | $ | 155,159 | ​ | $ | 158,500 | ​ | $ | 930,000 | ​ | $ | (16,484) | ​ | $ | (6,924) | ​ | $ | 1,220,251
(1) | Includes discount on issued subordinated notes.
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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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