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Borrowings | 11. Borrowings At December 31, 2016 and 2015, the Corporation had available one $10 million line of credit with an unaffiliated institution, at a variable interest rate with a floor as defined in the agreement. There were no borrowings on the line of credit at December 31, 2016 and 2015.
FHLB Borrowings At December 31, 2016, the Bank had remaining borrowing capacity with the FHLB of $395,858. At December 31, 2016, borrowings with the FHLB are secured by a pledge of selected securities in the amount of $15,586 and certain loans with a balance of $963,626 at December 31, 2016. Borrowings from the FHLB at December 31, 2016 and 2015 are as follows:
(a) – Open Repo borrowing at an interest rate of 0.74% at December 31, 2016 and 0.43% at December 31, 2015. The maximum amount of the Open Repo borrowing available is $150,000. (b) – Early repayment made on 6/21/16. Interest rate was fixed at 4.60% until June 2009, since which time FHLB has had the option to convert to floating interest rate based on the 3 month LIBOR + 0.16%. The interest rate was 4.60% at June 21, 2016 and December 31, 2015. (c) – Early repayment made on 6/21/16. Interest rate was fixed at 4.02% until February 2008, since which time FHLB has had the option to convert to a floating interest rate based on the 3 month LIBOR + 0.11%. The interest rate was 4.02% at June 21, 2016 and December 31, 2015. (d) – Early repayment made on 6/21/16. Interest rate was fixed at 4.10% until August 2008, since which time FHLB has had the option to convert to a floating interest rate based on the 3 month LIBOR + 0.11%. The interest rate was 4.10% at June 21, 2016 and December 31, 2015. (e) – Early repayment made on 6/21/16. Interest rate was fixed at 4.47% until August 2010, since which time FHLB has had the option to convert to a floating interest rate based on the 3 month LIBOR + 0.11%. The interest rate was 4.47% at June 21, 2016 and December 31, 2015.
(f) – Fixed rate borrowing at an interest rate of 0.83%, with monthly principal and interest payments. (g) – Early repayment made on 6/21/16. Interest rate was fixed at 3.97% until October 2009, since which time FHLB has had the option to convert to a floating interest rate based on the 3 month LIBOR + 0.10%. The interest rate was 3.97% at June 21, 2016 and December 31, 2015. (h) – Fixed rate borrowing at an interest rate of 1.25%, with monthly principal and interest payments. (i) – Fixed rate borrowing at an interest rate of 1.05%, with monthly principal and interest payments. (j) – Fixed rate borrowing at an interest rate of 1.17%, with monthly principal and interest payments. (k) – Fixed rate borrowing at an interest rate of 1.35%, with monthly principal and interest payments. (l) – Fixed rate borrowing at an interest rate of 1.27%, with monthly principal and interest payments. (m) – Fixed rate borrowing at an interest rate of 1.47%, with monthly principal and interest payments. (n) – Fixed rate borrowing at interest rate of 4.72%. Interest only payments with principal due at maturity. (o) – Fixed rate borrowing at an interest rate of 4.31%, with monthly principal and interest payments and a balloon payment due at maturity. (p) – Fixed rate borrowing at an interest rate of 3.05%, with monthly principal and interest payments and a balloon payment due at maturity. (q) – Fixed rate borrowing at an interest rate of 5.24%, with monthly principal and interest payments and a balloon payment due at maturity. (r) – Fixed rate borrowing at an interest rate of 3.35%, with monthly principal and interest payments. (s) – Fixed rate borrowing at an interest rate of 4.00%, with monthly principal and interest payments. (t) – Fixed rate borrowing at an interest rate of 2.96%, with monthly principal and interest payments. Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances. Other Borrowings At December 31, 2016 and 2015, the Bank had no outstanding borrowings from unaffiliated institutions under overnight borrowing agreements. The Bank entered into a borrowing transaction with an unaffiliated institution in March 2007. The proceeds of this borrowing were $10,000 and, as part of this transaction, the Bank pledged certain securities which had a carrying amount of $11,416 at December 31, 2016. The borrowing has a maturity date of March 20, 2017. The borrowing is callable by the issuer at the end of each quarter until maturity. The interest rate is fixed and was 5.25% at December 31, 2016 and 2015.
Subordinated Debentures In 2007, the Corporation issued two $10,000 floating rate trust preferred securities as part of a pooled offering of such securities. The interest rate on each offering is determined quarterly and floats based on the 3 month LIBOR plus 1.55% and was 2.51% at December 31, 2016 and 2.06% at December 31, 2015. The Corporation issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The subordinated debentures must be redeemed no later than 2037. The Corporation may redeem the debentures, in whole or in part, at face value at any time. The Corporation has the option to defer interest payments from time to time for a period not to exceed five consecutive years. Although the trusts are variable interest entities, the Corporation is not the primary beneficiary. As a result, because the trusts are not consolidated with the Corporation, the Corporation does not report the securities issued by the trusts as liabilities. Instead, the Corporation reports as liabilities the subordinated debentures issued by the Corporation and held by the trusts, since the liabilities are not eliminated in consolidation. In September 2016, the Corporation completed a private placement of $50,000 in aggregate principal amount of fixed-to-floating rate subordinated notes. The notes will mature in October 2026, and will initially bear interest at a fixed rate of 5.75% per annum, payable semi-annually in arrears, to, but excluding, October 15, 2021, and thereafter to, but excluding, the maturity date or earlier redemption, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month LIBOR rate plus 4.55%. These subordinated notes were designed to qualify as Tier 2 capital under the Federal Reserve’s capital guidelines and were given an investment grade rating of BBB- by Kroll Bond Rating Agency. Maturity Schedule of All Borrowed Funds The following is a schedule of maturities of all borrowed funds as of December 31, 2016:
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