Borrowings

Short-term Borrowings

A summary of the Corporation's short-term borrowings, which generally have an original term to maturity of 30 days or less, follows:



	June 30, 2015		December 31, 2014		June 30, 2014
	(In thousands)
Short-term borrowings:
Securities sold under agreements to repurchase with customers	$	305,291	$	304,467	$	293,422
Short-term FHLB advances	205,000		60,000		—
Federal funds purchased	22,000		25,000		12,000
Total short-term borrowings	$	532,291	$	389,467	$	305,422

Other Borrowings

The Corporation's other borrowings were obtained as a result of the acquisitions of Lake Michigan and Monarch. A summary of the Corporation's other borrowings follows:



	June 30, 2015		December 31, 2014		June 30, 2014
	(In thousands)
Other borrowings:
Long-term FHLB advances	$	81,469	$	—	$	—
Securities sold under agreements to repurchase	23,649		—		—
Line of credit	25,000		—		—
Subordinated debentures	18,372		—		—
Total other borrowings	$	148,490	$	—	$	—

In conjunction with the Lake Michigan and Monarch acquisitions, the Corporation acquired long-term FHLB advances totaling $81.5 million. These advances have a weighted average interest rate of 1.33% at June 30, 2015. The Corporation's FHLB advances, including both short-term and long-term, require monthly interest payments and are collateralized by eligible loans totaling $1.24 billion as of June 30, 2015. The scheduled reductions of long-term FHLB advances as of June 30, 2015 were as follows: 2015 - $0.1 million; 2016 - $7.1 million; 2017 - $47.1 million; 2018 - $17.1 million; 2019; - $0.1 million; and 2020 - $10.0 million.

In conjunction with the Lake Michigan acquisition, the Company acquired securities sold under agreements to repurchase with an unaffiliated financial institution of $23.7 million as of acquisition date. These agreements are secured by available for-sale-securities. The scheduled reductions of securities sold under agreements to repurchase as of June 30, 2015 were as follows: 2015 - $3.2 million; 2016 - $8.3 million; and 2017 - $12.1 million.

The Corporation entered into a $25 million secured non-revolving line-of-credit in May 2015 with an unaffiliated third-party financial institution. The Corporation drew on the entire amount of the line-of-credit in order to partially fund the cash portion of the purchase price consideration for the Lake Michigan transaction. This line-of-credit bears a variable rate of interest which is based on the one-, two- or three-month LIBOR, as periodically selected by the Corporation, plus a fixed stated rate (effective interest rate of 2.134% at June 30, 2015), and matures in May 2016. The line-of-credit agreement contains certain restrictive covenants. The Corporation was in compliance with all of the covenants at June 30, 2015.

In conjunction with the acquisition of Lake Michigan on May 31, 2015, the Corporation acquired Lake Michigan Financial Capital Trust I (LMFCTI), Lake Michigan Financial Capital Trust II (LMFCTII), and Lake Michigan Financial Capital Trust III (LMFCTIII). LMFCTIII, which held the $10.0 million trust preferred security due to the Corporation, was repaid and settled as of the Lake Michigan acquisition date, and the entity was subsequently dissolved. All of the common securities of the remaining two special purpose trusts are owned by the Corporation. The trusts exist solely to issue capital securities in the form of cumulative preferred securities (trust preferred securities) with a par value of $1,000 per security. The proceeds from the sale of the trust preferred securities were used by each trust to purchase an equivalent amount of subordinated debentures from Lake Michigan. Lake Michigan guaranteed the payment of distributions on the trust preferred securities issued by LMFCTI and LMFCTII. At the acquisition date, the Corporation assumed responsibility of the guarantees.

LMFCTI issued $10.3 million in preferred securities in October 2002. This trust preferred subordinated debt pays interest based on a floating rate tied to the three-month LIBOR plus 3.45% (effective interest rate of 3.73% as of June 30, 2015). The maturity date of this trust preferred subordinated debt is October 2032. LMFCTII issued $8.2 million in preferred securities in May 2004. This trust preferred subordinated debt pays interest based on a floating rate tied to the three-month LIBOR plus 2.7% (effective interest rate of 2.98% as of June 30, 2015). The maturity date of this trust preferred subordinated debt is May 2034. The Corporation may, at any time, redeem the LMFCTI or LMFCTII subordinated debentures at par.