Borrowings

9 Months Ended

Sep. 30, 2016

NOTE 10 — BORROWINGS AND RELATED INTEREST

Securities Sold under Agreements to Repurchase

At September 30, 2016, securities underlying agreements to repurchase were delivered to, and are being held by, the counterparties with whom the repurchase agreements were transacted. The counterparties have agreed to resell to the Company the same or similar securities at the maturity of these agreements.

At September 30, 2016 and December 31, 2015, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $1.6 million and $2.2 million, respectively, were as follows:

	September 30,				December 31,
	2016				2015
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
Federal Home Loan Bank of NY		42,135		44,883		-		-
JP Morgan Chase Bank NA	$	212,500	$	231,967	$	262,500	$	283,483
Credit Suisse Securities (USA) LLC		402,000		429,111		670,000		737,887
Total	$	656,635	$	705,961	$	932,500	$	1,021,370

The following table shows a summary of the Company’s repurchase agreements and their terms, excluding accrued interest in the amount of $1.6 million, at September 30, 2016:

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2016	$	21,635	0.570%	09/20/16	10/07/16
		20,500	0.510%	09/30/16	10/07/16
		170,000	1.500%	12/06/12	12/08/16

2017		232,000	4.780%	3/2/2007	3/2/2017

2018		212,500	1.420%	12/10/2012	04/29/18
	$	656,635	2.57%

A repurchase agreement in the original amount of $500 million with an original term of ten years, maturing on March 2, 2017, was modified in February 2016 to terminate, before maturity, $268.0 million of this repurchase agreement at a cost of $12.0 million, included as a loss on early extinguishment of debt in the unaudited statements of operations. The remaining balance of this repurchase agreement was $232.0 million at September 30, 2016.

The following table presents the repurchase liability associated with the repurchase agreement transactions (excluding accrued interest) by maturity. Also, it includes the carrying value and approximate market value of collateral (excluding accrued interest) at September 30, 2016 and December 31, 2015. There was no cash collateral at September 30, 2016 and December 31, 2015.

	September 30, 2016
					Market Value of Underlying Collateral

			Weighted		FNMA and				US Treasury
	Repurchase		Average		FHLMC		GNMA		Treasury
	Liability		Rate		Certificates		Certificates		Notes		Total
	(Dollars in thousands)
Less than 90 days	$	212,135		1.31%	$	197,936	$	437	$	23,817	$	222,190
Over 90 days	$	444,500		3.17%	$	481,455	$	1,115	$	1,201	$	483,771
Total	$	656,635		2.57%	$	679,391	$	1,552	$	25,018	$	705,961

	December 31, 2015
					Market Value of Underlying Collateral

			Weighted		FNMA and				US Treasury
	Repurchase		Average		FHLMC		GNMA		Treasury
	Liability		Rate		Certificates		Certificates		Notes		Total
	(Dollars in thousands)
Less than 90 days	$	30,000		0.70%	$	31,961	$	-	$	-	$	31,961
Over 90 days		902,500		3.18%		974,698		2,131		12,580		989,409
Total	$	932,500		3.10%	$	1,006,659	$	2,131	$	12,580	$	1,021,370

Advances from the Federal Home Loan Bank of New York

Advances are received from the Federal Home Loan Bank of New York (the “FHLB-NY”) under an agreement whereby the Company is required to maintain a minimum amount of qualifying collateral with a fair value of at least 110% of the outstanding advances. At September 30, 2016 and December 31, 2015, these advances were secured by mortgage and commercial loans amounting to $1.5 billion and $1.3 billion, respectively. Also, at September 30, 2016 and December 31, 2015, the Company had an additional borrowing capacity with the FHLB-NY of $1.1 billion and $770.6 million, respectively. At September 30, 2016 and December 31, 2015, the weighted average remaining maturity of FHLB’s advances was 12.5 months and 6.3 months, respectively. The original terms of these advances ranges between one month and seven years, and the FHLB-NY does not have the right to exercise put options at par on any advances outstanding as of September 30, 2016.

The following table shows a summary of these advances and their terms, excluding accrued interest in the amount of $293 thousand, at September 30, 2016:

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2016	$	36,938	0.57%	9/1/2016	10/3/2016

2017		4,091	1.24%	4/3/2012	4/3/2017

2018		30,000	2.19%	1/16/2013	1/16/2018
		25,000	2.18%	1/16/2013	1/16/2018
		55,000

2020		9,623	2.59%	7/19/2013	7/20/2020
	$	105,652	1.61%

All of the advances referred to above with maturity dates up to the date of this report were renewed as one-month short-term advances.

Subordinated Capital Notes

Outstanding subordinated capital notes amounted to $36.1 million and $102.6 million at September 30, 2016 and December 31, 2015, respectively. On September 29, 2016, the Company repaid $67.0 million of subordinated capital notes at maturity.