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Borrowings
 12 Months Ended
Dec. 31, 2011
Borrowings [Abstract]  
Borrowings
Note 8. Borrowings

The following schedule details borrowings at December 31, 2011 and 2010:

 

                 
    2011     2010  
(Amounts in thousands)            

Securities sold under agreements to repurchase

   $ 129,208     $ 140,894  

FHLB borrowings

     150,000       175,000  

Subordinated debt

     15,464       15,464  

Other debt

     469       729  
   

 

 

    

 

 

  

Total

   $ 295,141     $ 332,087  
   

 

 

    

 

 

  

Securities sold under agreements to repurchase consisted of $79.21 million and $90.89 million of retail overnight and term repurchase agreements at December 31, 2011 and 2010, respectively, and $50.00 million of wholesale repurchase agreements at both December 31, 2011 and 2010. The weighted average rate of the wholesale repurchase agreements was 3.71% at both December 31, 2011 and 2010, respectively. The wholesale repurchase agreements had a weighted average maturity of 6.08 years at December 31, 2011, and are collateralized with agency MBS.

First Community Bank (the “Bank”) is a member of the FHLB which provides credit in the form of short-term and long-term advances collateralized by various mortgage assets. Advances from the FHLB were secured by qualifying loans totaling $693.33 million and $587.69 million at December 31, 2011 and 2010, respectively. The FHLB advances are subject to restrictions or penalties in the event of prepayment. At December 31, 2011, unused borrowing capacity with the FHLB totaled $132.39 million.

FHLB borrowings included $150.00 million and $175.00 million in convertible and callable advances at December 31, 2011 and 2010, respectively. During the first quarter of 2011, the Company prepaid $25.00 million of a $75 million FHLB advance. The callable advances may be redeemed at quarterly intervals after various lockout periods. These call options may substantially shorten the lives of these instruments. If these advances are called, the debt may be paid in full or converted to another FHLB credit product. Prepayment of the advances may result in substantial penalties based upon the differential between contractual note rates and current advance rates for similar maturities. The weighted average contractual rate of all FHLB advances was 4.12% and 2.39% at December 31, 2011 and 2010, respectively. The decrease is due to structure within those borrowings. The FHLB advances had a weighted average maturity of 6.57 years at December 31, 2011.

At December 31, 2011, the FHLB advances had approximate contractual final maturities between five and ten years. The scheduled maturities of the advances are as follows:

 

         
    Amount  
(Amounts in thousands)      

2012

   $ —    

2013

     —    

2014

     —    

2015

     —    

2016

     —    

2017 and thereafter

     150,000  
   

 

 

  
    $ 150,000  
   

 

 

  

In January 2006, the Company entered into a five year derivative swap instrument where it received LIBOR-based variable interest payments and paid fixed interest payments. The notional amount of the derivative swap was $50.00 million and effectively fixed a portion of the FHLB borrowings at 4.34%. This derivative interest rate swap instrument expired in January 2011. For a more detailed discussion of activities regarding derivatives, see “Note 13 – Derivative Instruments and Hedging Activities” of the Notes to Consolidated Financial Statements in Item 8 herein.

Also included in borrowings is $15.46 million of junior subordinated debentures (the “Debentures”) issued by the Company in October 2003 to an unconsolidated trust subsidiary, FCBI Capital Trust (the “Trust”), with an interest rate of three-month LIBOR plus 2.95%. The Trust was able to purchase the Debentures through the issuance of trust preferred securities which had substantially identical terms as the Debentures. The Debentures mature on October 8, 2033, and are currently callable. The net proceeds from the offering were contributed as capital to the Bank to support further growth. The Company’s obligations under the Debentures and other relevant Trust agreements, in aggregate, constitute a full and unconditional guarantee by the Company of the Trust’s obligations.

Despite the fact that the accounts of the Trust are not included in the Company’s consolidated financial statements, the trust preferred securities issued by the Trust are included in the Tier 1 capital of the Company for regulatory capital purposes. Federal Reserve Board rules limit the aggregate amount of restricted core capital elements (which includes trust preferred securities, among other things) that may be included in the Tier 1 capital of most bank holding companies to 25% of all core capital elements, including restricted core capital elements, net of goodwill less any associated deferred tax liability. The current quantitative limits do not preclude the Company from including the $15.46 million in trust preferred securities outstanding in Tier 1 capital as of December 31, 2011.