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BORROWINGS | 6 Months Ended
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Jun. 30, 2020
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, 2020 and December 31, 2019 (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, | ​ | December 31, |
​ | ​ | 2020 | ​ | 2019 |
Securities sold under agreements to repurchase | ​ | $ | 77,216 | ​ | $ | 66,053 | ​
Federal Funds Purchased | ​ | ​ | — | ​ | ​ | — | ​
FHLB advances | ​ |  | — | ​ |  | 370,200 | ​
Total short-term borrowings | ​ | $ | 77,216 | ​ | $ | 436,253 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Average outstanding balance during the period | ​ | $ | 272,470 | ​ | $ | 673,116 | ​
Average interest rate (during the period) | ​ |  | 1.13 | % |  | 2.30 | %
Average interest rate at end of period | ​ |  | 0.32 | % |  | 1.52 | %
​ The Bank maintains federal funds lines with several correspondent banks, the remaining available balance was $972.0 million and $682.0 million at June 30, 2020 and December 31, 2019, respectively. The Company maintains an alternate line of credit at a correspondent bank, which had an available balance of $25.0 million at both June 30, 2020 and December 31, 2019. 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, 2020. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $5.3 billion and $5.2 billion at June 30, 2020 and December 31, 2019, 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 $14.5 million at June 30, 2020. ​ The trust preferred capital notes currently qualify for Tier 2 capital of the Company for regulatory purposes. The Company’s trust preferred capital notes consist of the following as of June 30, 2020:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Trust |  | ​ | ​ |  | ​ |  | ​ |  | ​
​ | ​ | Preferred | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Capital | ​ | ​ | ​ | ​ | Spread to | ​ | ​ | ​ | ​
​ | ​ | Securities (1) | ​ | Investment (1) | ​ | 3-Month LIBOR | ​ | Rate (2) | ​ | Maturity
Trust Preferred Capital Note - Statutory Trust I | ​ | $ | 22,500 | ​ | $ | 696 |  | 2.75 | % | 3.05 | % | 6/17/2034
Trust Preferred Capital Note - Statutory Trust II | ​ |  | 36,000 | ​ |  | 1,114 |  | 1.40 | % | 1.70 | % | 6/15/2036
VFG Limited Liability Trust I Indenture | ​ |  | 20,000 | ​ |  | 619 |  | 2.73 | % | 3.03 | % | 3/18/2034
FNB Statutory Trust II Indenture | ​ |  | 12,000 | ​ |  | 372 |  | 3.10 | % | 3.40 | % | 6/26/2033
Gateway Capital Statutory Trust I | ​ |  | 8,000 | ​ |  | 248 |  | 3.10 | % | 3.40 | % | 9/17/2033
Gateway Capital Statutory Trust II | ​ |  | 7,000 | ​ |  | 217 |  | 2.65 | % | 2.95 | % | 6/17/2034
Gateway Capital Statutory Trust III | ​ |  | 15,000 | ​ |  | 464 |  | 1.50 | % | 1.80 | % | 5/30/2036
Gateway Capital Statutory Trust IV | ​ |  | 25,000 | ​ |  | 774 |  | 1.55 | % | 1.85 | % | 7/30/2037
MFC Capital Trust II | ​ |  | 5,000 | ​ |  | 155 |  | 2.85 | % | 3.15 | % | 1/23/2034
Total | ​ | $ | 150,500 | ​ | $ | 4,659 |  |  |  |  |  |
(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, 2020.
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 had been fully amortized at June 30, 2020. The acquired subordinated notes have a fixed interest rate of 6.75% and a maturity date of June 30, 2025. At June 30, 2020 and December 31, 2019, the contractual principal reported for subordinated notes was $158.5 million; remaining issuance discount as of June 30, 2020 and December 31, 2019 is $1.3 million and $1.4 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 was considered to be in compliance with these covenants as of June 30, 2020. 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 was deferred and to be amortized 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 and was $502,000 and $994,000 for the three and six months ended June 30, 2019, respectively. On August 29, 2019, the Company repaid the floating rate FHLB advances. As of June 30, 2020, 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)(2) | ​ | Maturity Date | ​ | Advance Amount
Convertible Flipper |  | (0.75) | % | — | % | 8/17/2029 | ​ | $ | 50,000
Convertible Flipper |  | (0.75) | % | — | % | 5/22/2029 | ​ |  | 150,000
Convertible Flipper |  | (0.75) | % | — | % | 5/30/2029 | ​ |  | 50,000
Convertible Flipper | ​ | (0.75) | % | — | % | 6/21/2029 | ​ | ​ | 100,000
Fixed Rate Convertible | ​ | - | ​ | 1.78 | % | 10/26/2028 | ​ | ​ | 200,000
Fixed Rate Credit | ​ | - | ​ | 1.54 | % | 10/2/2020 | ​ | ​ | 10,000
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 560,000
(1) | Interest rates calculated using non-rounded numbers.
(2) | Convertible Flippers have interest rate floor of 0%
As of December 31, 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)(2) | ​ | Maturity Date | ​ | Advance Amount | ​
Convertible Flipper |  | (0.75) | % | 1.16 | % | 8/17/2029 | ​ | $ | 50,000
Convertible Flipper |  | (0.50) | % | 1.41 | % | 5/15/2024 | ​ |  | 200,000
Convertible Flipper |  | (0.75) | % | 1.16 | % | 5/22/2029 | ​ |  | 150,000
Convertible Flipper |  | (0.75) | % | 1.16 | % | 5/30/2029 | ​ |  | 50,000
Convertible Flipper |  | (0.75) | % | 1.16 | % | 6/21/2029 | ​ |  | 100,000
Fixed Rate Convertible |  | - | ​ | 1.78 | % | 10/26/2028 | ​ |  | 200,000
Fixed Rate Hybrid |  | - | ​ | 1.58 | % | 5/18/2020 | ​ |  | 20,000
Fixed Rate Credit | ​ | - | ​ | 1.54 | % | 10/2/2020 | ​ | ​ | 10,000
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 780,000
(1) | Interest rates calculated using non-rounded numbers.
(2) | Convertible Flippers have interest rate floor of 0%
​ For information on the carrying value of loans and securities pledged as collateral on FHLB advances as of June 30, 2020 and December 31, 2019, refer to Note 8 "Commitments and Contingencies." During the second quarter of 2020, in connection with the loans originated as part of the PPP, the Company borrowed under the Federal Reserve’s PPPLF. Under the terms of the PPPLF, the Company can borrow funds which are secured by the Company’s PPP loans. As of June 30, 2020, the Company’s outstanding advances under the PPPLF were $189.9 million. The interest rate on the advances is fixed at a rate of 0.35% through the advance maturities in April 2022. The Company’s available borrowing capacity under the PPPLF as of June 30, 2020 was $1.5 billion. As of June 30, 2020, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Trust |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | Preferred | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Fair Value | ​ | ​ | ​
​ | ​ | Capital | ​ | Subordinated | ​ | PPPLF | ​ | FHLB | ​ | Premium | ​ | Total Long-term
​ | ​ | Notes | ​ | Debt | ​ | Advances | ​ | Advances | ​ | (Discount) (1) | ​ | Borrowings
For the remaining six months of 2020 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 10,000 | ​ | $ | (456) | ​ | $ | 9,544
2021 | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ |  | — | ​ |  | (1,008) | ​ |  | (1,008)
2022 | ​ |  | — | ​ |  | — | ​ | ​ | 189,941 | ​ |  | — | ​ |  | (1,030) | ​ |  | 188,911
2023 | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ |  | — | ​ |  | (1,053) | ​ |  | (1,053)
2024 | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ |  | — | ​ |  | (1,078) | ​ |  | (1,078)
Thereafter | ​ |  | 155,159 | ​ |  | 158,500 | ​ | ​ | — | ​ |  | 550,000 | ​ |  | (11,161) | ​ |  | 852,498
Total long-term borrowings | ​ | $ | 155,159 | ​ | $ | 158,500 | ​ | $ | 189,941 | ​ | $ | 560,000 | ​ | $ | (15,786) | ​ | $ | 1,047,814
(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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