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Borrowed Funds | 12 Months Ended
--- | ---
Dec. 31, 2023
Debt Disclosure [Abstract] |
Borrowed Funds | Borrowed Funds The following table summarizes the Company’s borrowed funds:
(in millions) | December 31, 2023 |  | December 31, 2022
Wholesale borrowings: |  |  |
FHLB advances | $ | 19,250 |  |  | $ | 20,325 |
FRB term funding | 1,000 |  |  | —
Total wholesale borrowings | $ | 20,250 |  |  | $ | 20,325 |
Junior subordinated debentures | 579 |  |  | 575
Subordinated notes | 438 |  |  | 432
Total borrowed funds | $ | 21,267 |  |  | $ | 21,332 |
Accrued interest on borrowed funds is included in “Other liabilities” in the Consolidated Statements of Condition and amounted to $50 million and $37 million, respectively, at December 31, 2023, December 31, 2022. FHLB Advances The contractual maturities and the next call dates of FHLB advances outstanding at December 31, 2023 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)
2024 | 7,350 |  |  | 4.57 |  |  | 9,100 |  |  | 4.37 |
2025 | 1,500 |  |  | 5.38 |  |  | 1,750 |  |  | 5.11 |
2026 | 2,500 |  |  | 5.37 |  |  | 2,500 |  |  | 5.37 |
2027 | 4,000 |  |  | 4.62 |  |  | 3,500 |  |  | 4.75 |
2028 | 2,400 |  |  | 5.17 |  |  | 2,400 |  |  | 5.17 |
2032 | 1,500 |  |  | 3.43 |  |  | — |  |  | — |
Total FHLB advances | $ | 19,250 |  |  |  |  | $ | 19,250 |  |  |
(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, 2023 and 2022, respectively, the Bank had unused lines of available credit with the FHLB-NY of up to $8.4 billion and $11.3 billion. The Company did not have any overnight advances at December 31, 2023 and $2.8 billion at December 31, 2022. During the year ended December 31, 2023, the average balance of overnight advances amounted to $624 million, with a weighted average interest rate of 5.08 percent. During the year ended December 31, 2022, the average balance of overnight advances amounted to $318 million, with a weighted average interest rate of 3.48 percent. Total FHLB advances generated interest expense of $564 million, $251 million and $233 million, in the years ended December 31, 2023, 2022, and 2021, respectively. Federal Reserve Bank (FRB) Term Funding Program At December 31, 2023, the Company had $1.0 billion in outstanding borrowings under the FRB Term Funding program. There were no such borrowings outstanding during the years ended 2022 or 2021. Repurchase Agreements The Company had no outstanding repurchase agreements as of December 31, 2023 and 2022. The Company had no short-term repurchase agreements outstanding at December 31, 2023 and 2022. There was no accrued interest on repurchase agreements amounted at December 31, 2023. The interest expense on repurchase agreements was $14 million and $18 million for the years ended December 31, 2022 and 2021, respectively. Federal Funds Purchased There were no federal funds purchased outstanding at December 31, 2023 and December 31, 2022. In 2023 and 2022, respectively, the average balances of federal funds purchased were $196 million and $466 million, with weighted average interest rates of 5.01 percent and 1.65 percent. The interest expense produced by federal funds purchased was $10 million, $8 million and $0 million for the years ended December 31, 2023, 2022 and 2021, respectively. Junior Subordinated Debentures At December 31, 2023 and December 31, 2022, the Company had $609 million and $608 million, respectively, of outstanding junior subordinated deferrable interest debentures (“junior subordinated debentures”) held by statutory business trusts (the “Trusts”) that issued guaranteed capital securities, excluding purchase accounting adjustments. The following table presents contractual terms of the junior subordinated debentures outstanding at December 31, 2023:
Issuer | Interest Rate of Capital Securities and Debentures |  | Junior Subordinated Debentures Amount Outstanding (3) |  | Capital Securities Amount Outstanding |  | Date of Original Issue |  | Stated Maturity
|  |  | (dollars in millions) |  |  |  |
New York Community Capital Trust V (BONUSES Units) (1) | 6.00 |  | $ | 147 |  |  | $ | 141 |  |  | Nov. 4, 2002 |  | Nov. 1, 2051
New York Community Capital Trust X (2) | 7.25 |  | 124 |  |  | 120 |  |  | Dec. 14, 2006 |  | Dec. 15, 2036
PennFed Capital Trust III (2) | 8.90 |  | 31 |  |  | 30 |  |  | June 2, 2003 |  | June 15, 2033
New York Community Capital Trust XI (2) | 7.24 |  | 59 |  |  | 58 |  |  | April 16, 2007 |  | June 30, 2037
Flagstar Statutory Trust II (2) | 8.87 |  | 26 |  |  | 25 |  |  | Dec. 26, 2002 |  | Dec. 26, 2032
Flagstar Statutory Trust III (2) | 8.91 |  | 26 |  |  | 25 |  |  | Feb. 19, 2003 |  | April 7, 2033
Flagstar Statutory Trust IV (2) | 8.84 |  | 26 |  |  | 25 |  |  | Mar. 19, 2003 |  | Mar 19, 2033
Flagstar Statutory Trust V (2) | 7.66 |  | 26 |  |  | 25 |  |  | Dec 29, 2004 |  | Jan. 7, 2035
Flagstar Statutory Trust VI (2) | 7.66 |  | 26 |  |  | 25 |  |  | Mar. 30, 2005 |  | April 7, 2035
Flagstar Statutory Trust VII (2) | 7.40 |  | 51 |  |  | 50 |  |  | Mar. 29, 2005 |  | June 15, 2035
Flagstar Statutory Trust VIII (2) | 7.16 |  | 26 |  |  | 25 |  |  | Sept. 22, 2005 |  | Oct. 7, 2035
Flagstar Statutory Trust IX (2) | 7.10 |  | 26 |  |  | 25 |  |  | June 28, 2007 |  | Sept. 15, 2037
Flagstar Statutory Trust X (2) | 8.15 |  | 15 |  |  | 15 |  |  | Aug. 31, 2007 |  | Sept 15, 2037
Total junior subordinated debentures (3) |  |  | $ | 609 |  |  | $ | 589 |  |  |  |  |
(1)Callable subject to certain conditions as described in the prospectus filed with the SEC on November 4, 2002. (2)Callable at any time. (3)Excludes Flagstar Acquisition fair value adjustments of $30 million. The Bifurcated Option Note Unit SecuritiES SM (“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 14 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 percent 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 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, 2023, this discount totaled $64 million. The other remaining 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, 2023, all dividends were current. Interest expense on junior subordinated debentures was $48 million, $22 million, and $18 million, respectively, for the years ended December 31, 2023, 2022, and 2021. Subordinated Notes At December 31, 2023 and December 31, 2022, the Company had a total of $438 million and $432 million subordinated notes outstanding; respectively, of fixed-to-floating rate subordinated notes outstanding:
Date of Original Issue |  | Stated Maturity |  | Interest Rate |  | Original Issue Amount
November 6, 2018 |  | November 6, 2028 (1) |  | 5.900% |  | $ | 300
October 28, 2020 |  | November 1, 2030 (2) |  | 4.125% |  | $ | 150
(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 percent 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 SOFR rate plus 304.16 b asis points payable quarterly. (2)From and including the date of original issuance, the Notes will bear interest at a fixed rate of 4.13 percent through October 31, 2025, and a variable rate tied to SOFR thereafter until maturity. The Company has the option to redeem all or a part of the Notes beginning on November 1, 2025, and on any subsequent interest payment date.

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