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Borrowed Funds
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Borrowed Funds

NOTE 9: BORROWED FUNDS

The following table summarizes the Company’s borrowed funds at December 31, 2021 and 2020:

 

 

 

December 31,

 

(in millions)

 

2021

 

 

2020

 

Wholesale borrowings:

 

 

 

 

 

 

FHLB advances

 

$

15,105

 

 

$

14,628

 

Repurchase agreements

 

 

800

 

 

 

800

 

Total wholesale borrowings

 

$

15,905

 

 

$

15,428

 

Junior subordinated debentures

 

 

361

 

 

 

360

 

Subordinated notes

 

 

296

 

 

 

296

 

Total borrowed funds

 

$

16,562

 

 

$

16,084

 

 

Accrued interest on borrowed funds is included in “Other liabilities” in the Consolidated Statements of Condition and amounted to $18 million and $19 million, respectively, at December 31, 2021 and 2020.

FHLB Advances

The contractual maturities and the next call dates of FHLB advances outstanding at December 31, 2021 were as follows:

 

 

 

Contractual Maturity

 

 

Earlier of Contractual
Maturity or Next Call Date

 

 

(dollars in millions)
Year

 

 

Amount

 

 

Weighted
Average
Interest
Rate (1)

 

 

 

Amount

 

 

Weighted
Average
Interest
Rate (1)

 

 

2022

 

$

 

3,750

 

 

 

0.50

 

%

$

 

11,030

 

 

 

1.53

 

%

2023

 

 

 

2,525

 

 

 

0.85

 

 

 

 

2,725

 

 

 

0.91

 

 

2024

 

 

 

1,350

 

 

 

0.85

 

 

 

 

1,350

 

 

 

0.85

 

 

2025

 

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

—

 

 

2026

 

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

—

 

 

2027

 

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

—

 

 

2028

 

 

 

4,350

 

 

 

2.40

 

 

 

 

—

 

 

 

—

 

 

2029

 

 

 

3,130

 

 

 

1.55

 

 

 

 

—

 

 

 

—

 

 

Total FHLB advances

 

$

 

15,105

 

 

 

1.36

 

 

$

 

15,105

 

 

 

1.36

 

 

 

(1)
Does not included the effect interest rate swap agreements.

FHLB advances include both straight fixed-rate advances and advances under the FHLB convertible advance program, which gives the FHLB the option of either calling the advance after an initial lock-out period of up to five years and quarterly thereafter until maturity, or a one-time call at the initial call date.

At December 31, 2021 and 2020, respectively, the Bank had unused lines of available credit with the FHLB of up to $8.4 billion and $7.3 billion. The Company had no overnight advances at December 31, 2021, or December 31, 2020. During the twelve months ended December 31, 2021, the average balance of overnight advances amounted to $6 million, with a weighted average interest rate of .36%. During the twelve months ended December 31, 2020, the average balances of overnight advances amounted to $2 million, with weighted average interest rates of 1.2%.

Total FHLB advances generated interest expense of $233 million, $246 million, and $259 million, in the years ended December 31, 2021, 2020, and 2019, respectively.

Repurchase Agreements

The following table presents an analysis of the contractual maturities and next call dates of the Company’s outstanding repurchase agreements accounted for as secured borrowings at December 31, 2021:

 

 

 

 

Contractual Maturity

 

 

 

Earlier of Contractual
Maturity or Next
Call Date

(dollars in millions)
Year

 

 

Amount

 

 

Weighted
Average
Interest
Rate

 

 

 

Amount

 

 

Weighted
Average
Interest
Rate

 

 

2022

 

$

 

—

 

 

 

—

 

%

$

 

800

 

 

 

2.24

 

%

2023

 

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

—

 

 

2028

 

 

 

300

 

 

 

2.37

 

 

 

 

—

 

 

 

—

 

 

2029

 

 

 

500

 

 

 

2.16

 

 

 

 

—

 

 

 

—

 

 

 

 

$

 

800

 

 

 

2.24

 

 

$

 

800

 

 

 

2.24

 

 

 

The following table provides the contractual maturity and weighted average interest rate of repurchase agreements, and the amortized cost and fair value of the securities collateralizing the repurchase agreements, at December 31, 2021:

 

 

 

 

 

 

 

 

 

 

 

Mortgage-Related
and Other Securities

 

 

 

GSE Debentures and
U.S. Treasury
Obligations

 

(dollars in millions)
Period of Maturity

 

 

Amount

 

 

Weighted
Average
Interest
Rate

 

 

 

Amortized
Cost

 

 

 

Fair
Value

 

 

 

Amortized
Cost

 

 

 

Fair
Value

 

Greater than 90 days

 

$

 

800

 

 

2.24

%

 

$

 

345

 

 

$

 

343

 

 

$

 

549

 

 

$

 

570

 

 

The Company had no short-term repurchase agreements outstanding at December 31, 2021 or 2020.

At December 31, 2021 and 2020, the accrued interest on repurchase agreements amounted to $2 million. The interest expense on repurchase agreements was $18 million, for each of the years ended December 31, 2021, 2020, and 2019, respectively.

Federal Funds Purchased

There were no federal funds purchased outstanding at December 31, 2021 or 2020.

In 2021 and 2020, respectively, the average balances of federal funds purchased were $81 million and $180 million, with weighted average interest rates of 0.09% and 0.49%. The interest expense produced by federal funds purchased was $0 million, $1 million and $0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Junior Subordinated Debentures

At December 31, 2021 and 2020, the Company had $361 million and $360 million, respectively, of outstanding junior subordinated deferrable interest debentures (“junior subordinated debentures”) held by statutory business trusts (the “Trusts”) that issued guaranteed capital securities.

The Trusts are accounted for as unconsolidated subsidiaries, in accordance with GAAP. The proceeds of each issuance were invested in a series of junior subordinated debentures of the Company and the underlying assets of each statutory business trust are the relevant debentures. The Company has fully and unconditionally guaranteed the obligations under each trust’s capital securities to the extent set forth in a guarantee by the Company to each trust. The Trusts’ capital securities are each subject to mandatory redemption, in whole or in part, upon repayment of the debentures at their stated maturity or earlier redemption.

The following junior subordinated debentures were outstanding at December 31, 2021:

 

Issuer

 

Interest Rate
of Capital
Securities
and
Debentures

 

 

 

Junior
Subordinated
Debentures
Amount
Outstanding

 

 

 

Capital
Securities
Amount
Outstanding

 

 

Date of
Original Issue

 

Stated
Maturity

 

First Optional
Redemption
Date

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

New York Community Capital
   Trust V (BONUSESSM Units)

 

 

6.00

%

 

$

 

147

 

 

$

 

140

 

 

Nov. 4, 2002

 

Nov. 1, 2051

 

Nov. 4, 2007

(1)

New York Community Capital
   Trust X

 

1.80

 

 

 

 

124

 

 

 

 

120

 

 

Dec. 14, 2006

 

Dec. 15, 2036

 

Dec. 15, 2011

(2)

PennFed Capital Trust III

 

3.45

 

 

 

 

31

 

 

 

 

30

 

 

June 2, 2003

 

June 15, 2033

 

June 15, 2008

(2)

New York Community Capital
   Trust XI

 

1.87

 

 

 

 

59

 

 

 

 

58

 

 

April 16, 2007

 

June 30, 2037

 

June 30, 2012

(2)

Total junior subordinated debentures

 

 

 

 

$

 

361

 

 

$

 

348

 

 

 

 

 

 

 

 

 

(1)
Callable subject to certain conditions as described in the prospectus filed with the SEC on November 4, 2002.
(2)
Callable from this date forward.

The Bifurcated Option Note Unit SecuritiESSM (“BONUSES units”) included in the preceding table were issued by the Company on November 4, 2002 at a public offering price of $50.00 per share. Each of the 5,500,000 BONUSES units offered consisted of a capital security issued by New York Community Capital Trust V, a trust formed by the Company, and a warrant to purchase 2.4953 shares of the common stock of the Company (for a total of approximately 13.7 million common shares) at an effective exercise price of $20.04 per share. Each capital security has a maturity of 49 years, with a coupon, or distribution rate, of 6.00% on the $50.00 per share liquidation amount. The warrants and capital securities were non-callable for five years from the date of issuance and were not called by the Company when the five-year period passed on November 4, 2007.

The gross proceeds of the BONUSES units totaled $275.0 million and were allocated between the capital security and the warrant comprising such units in proportion to their relative values at the time of issuance. The value assigned to the warrants, $92.4 million, was recorded as a component of additional “paid-in capital” in the Company’s Consolidated Statements of Condition. The value assigned to the capital security component was $182.6 million. The $92.4 million difference between the assigned value and the stated liquidation amount of the capital securities was treated as an original issue discount, and is being amortized to interest expense over the 49-year life of the capital securities on a level-yield basis. At December 31, 2021, this discount totaled $65 million.

The other three trust preferred securities noted in the preceding table were formed for the purpose of issuing Company Obligated Mandatorily Redeemable Capital Securities of Subsidiary Trusts Holding Solely Junior Subordinated Debentures (collectively, the “Capital Securities”). Dividends on the Capital Securities are payable either quarterly or semi-annually and are deferrable, at the Company’s option, for up to five years. As of December 31, 2021, all dividends were current.

Interest expense on junior subordinated debentures was $18 million, $19 million, and $22 million, respectively, for the years ended December 31, 2021, 2020, and 2019.

Subordinated Notes

At December 31, 2021 and 2020, the Company had $296 million, respectively, of fixed-to-floating rate subordinated notes outstanding:

 

Date of Original Issue

 

Stated Maturity

 

Interest Rate(1)

 

 

Original Issue
Amount

 

 

 

(dollars in millions)

 

 

 

 

Nov. 6, 2018

 

Nov. 6, 2028

 

 

5.90

%

 

$

300

 

 

(1)
From and including the date of original issuance to, but excluding November 6, 2023, the Notes will bear interest at an initial rate of 5.90% per annum payable semi-annually. Unless redeemed, from and including November 6, 2023 to but excluding the maturity date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR rate plus 278 basis point payable quarterly.

The interest expense on subordinated notes amounted to $18 million for the years ended December 31, 2021 , 2020, and 2019.