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FHLB Advances, Other Borrowings and Junior Subordinated Notes | 12 Months Ended
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Dec. 31, 2017
Debt Disclosure [Abstract] |
FHLB Advances, Other Borrowings and Junior Subordinated Notes | FHLB Advances, Other Borrowings and Junior Subordinated Notes The composition of borrowed funds at December 31, 2017 and 2016 is as follows:
|  | December 31, 2017 |  | December 31, 2016
|  | Balance |  | Weighted Average Balance |  | Weighted Average Rate |  | Balance |  | Weighted Average Balance |  | Weighted Average Rate
|  | (Dollars in Thousands)
Federal funds purchased |  | $ | — |  |  | $ | 66 |  |  | 1.22 | % |  | $ | — |  |  | $ | 178 |  |  | 0.92 | %
FHLB advances |  | 183,500 |  |  | 105,276 |  |  | 1.40 |  |  | 33,578 |  |  | 14,485 |  |  | 0.97 |
Line of credit |  | 10 |  |  | 328 |  |  | 3.64 |  |  | 1,010 |  |  | 2,079 |  |  | 3.26 |
Other borrowings(1) |  | 675 |  |  | 1,241 |  |  | 14.50 |  |  | 2,590 |  |  | 1,739 |  |  | 7.64 |
Subordinated notes payable |  | 23,713 |  |  | 23,161 |  |  | 6.93 |  |  | 22,498 |  |  | 22,467 |  |  | 7.13 |
Junior subordinated notes |  | 10,019 |  |  | 10,011 |  |  | 11.11 |  |  | 10,004 |  |  | 9,997 |  |  | 11.07 |
|  | $ | 217,917 |  |  | $ | 140,083 |  |  | 3.14 |  |  | $ | 69,680 |  |  | $ | 50,945 |  |  | 6.03 |
Short-term borrowings |  | $ | 37,010 |  |  |  |  |  |  | $ | 20,588 |  |  |  |  |
Long-term borrowings |  | 180,907 |  |  |  |  |  |  | 49,092 |  |  |  |  |
|  | $ | 217,917 |  |  |  |  |  |  | $ | 69,680 |  |  |  |  |
(1) | Weighted average rate of other borrowings reflects the cost of prepaying a secured borrowing during the second quarter of 2017.
The Corporation has a $388.2 million FHLB line of credit available for advances and open line borrowings which is collateralized by mortgage-related securities, unencumbered first mortgage loans and secured small business loans as noted below. At December 31, 2017, $204.7 million of this line remained unused. There were no advances outstanding on the Corporation’s open line at December 31, 2017 and 2016. There were $183.5 million of term FHLB advances outstanding at December 31, 2017 with stated fixed interest rates ranging from 1.20% to 2.42% compared to $33.6 million of term FHLB advances outstanding at December 31, 2016 with stated fixed interest rate ranging from 0.83% to 4.43%. The term FHLB advances outstanding at December 31, 2017 are due at various dates through August 2024. The Corporation is required to maintain as collateral, mortgage-related securities and unencumbered first mortgage loans and secured small business loans in its portfolio aggregating at least the amount of outstanding advances from the FHLB. Loans totaling approximately $388.2 million and $326.4 million were pledged as collateral at December 31, 2017 and 2016, respectively. Collateralized mortgage obligations totaling approximately $20.7 million were pledged as collateral for FHLB advances at December 31, 2016. The Corporation has a senior line of credit with a third-party financial institution of $10.5 million. As of December 31, 2017, the line of credit carried an interest rate of LIBOR + 2.75% with an interest rate floor of 3.125% that matured on February 19, 2018 and had certain performance debt covenants of which the Corporation was in compliance. The Corporation pays a commitment fee on this senior line of credit. For the years ended December 31, 2017 and 2016 the Corporation incurred $13,000 additional interest expense due to this fee. On February 19, 2018, the credit line was renewed for one additional year with pricing terms of LIBOR + 2.75% with an interest rate floor of 3.125% and a maturity date of February 20, 2019. As of December 31, 2017, the outstanding balance on the line of credit was $10,000. The Corporation has subordinated notes payable. At December 31, 2017, the amount of subordinated notes payable outstanding was $23.7 million, which qualified for Tier 2 capital. At December 31, 2017, $15.0 million bore a fixed interest rate of 6.50% with a maturity date of September 21, 2024 and $9.1 million bore a fixed interest rate of 6.00% with a maturity date of April 15, 2027. There are no debt covenants on the subordinated notes payable. The Corporation may, at its option, redeem the notes, in whole or part, at any time after the fifth anniversary of issuance. As of December 31, 2017, $377,000 of debt issuance costs remain in the subordinated notes payable balance. In September 2008, Trust II completed the sale of $10.0 million of 10.50% fixed rate trust preferred securities (“Preferred Securities”). Trust II also issued common securities of $315,000. Trust II used the proceeds from the offering to purchase $10.3 million of 10.50% junior subordinated notes (“Notes”) of the Corporation. The Preferred Securities are mandatorily redeemable upon the maturity of the Notes on September 26, 2038. The Preferred Securities qualify under the risk-based capital guidelines as Tier 1 capital for regulatory purposes. Per the provisions of the Dodd-Frank Act, bank holding companies with total assets of less than $15 billion are not required to phase out trust preferred securities as an element of Tier 1 capital as other, larger institutions must. The Corporation used the proceeds from the sale of the Notes for general corporate purposes including providing additional capital to its subsidiaries. As of December 31, 2017, $296,000 of debt issuance costs remain reflected in junior subordinated notes on the Consolidated Balance Sheets. The Corporation has the right to redeem the Notes at each interest payment date on or after September 26, 2013. The Corporation also has the right to redeem the Notes, in whole but not in part, after the occurrence of certain special events. Special events are limited to: (1) a change in capital treatment resulting in the inability of the Corporation to include the Notes in Tier 1 capital, (2) a change in laws or regulations that could require Trust II to register as an investment company under the Investment Company Act of 1940, as amended; and (3) a change in laws or regulations that would require Trust II to pay income tax with respect to interest received on the Notes or, prohibit the Corporation from deducting the interest payable by the Corporation on the Notes or result in greater than a de minimis amount of taxes for Trust II.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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