14. Borrowings

The following schedule details the Company's FHLB borrowings and other indebtedness at the periods indicated.


(dollars in thousands)	June 30, 2011		December 31, 2010
Retail repurchase agreements	$	10,056	$	9,628
Federal Home Loan Bank advances		144,456		144,485
Subordinated debt		2,500		7,500
Junior subordinated debt		56,702		56,702

Total borrowings	$	213,714	$	218,315

Funds are borrowed on an overnight basis through retail repurchase agreements with bank customers and federal funds purchased from other financial institutions. Retail repurchase agreement borrowings are collateralized by securities of the U.S. Treasury and U.S. Government agencies and corporations.

At June 30, 2011, the Bank had a line of credit at the FRBR totaling $23.7 million, of which there was no outstanding balance at period end. The Bank had no other federal funds purchased lines as of June 30, 2011. At December 31, 2010, the Bank had no line of credit at the Federal Reserve Bank.

At June 30, 2011, the FHLB advances have approximate contractual maturities between five months and seven years. The scheduled maturities of the advances are as follows:


(dollars in thousands)
2011	$	25,000
2012		15,000
2013		20,231
2014		15,324
2015		18,511
2016 and thereafter		50,390

Total FHLB advances	$	144,456

The Bank had no line of credit with the FHLB at June 30, 2011. However, at June 30, 2011, current outstanding FHLB advances under the discontinued line amounted to $144.5 million and were at interest rates ranging from 0.27% to 6.15%. These borrowings were secured by delivered collateral on qualifying mortgage loans and, as required, by other qualifying collateral. At December 31, 2010, FHLB advances amounted to $144.5 million and were at interest rates ranging from 0.27% to 6.15%.

FNB United has junior subordinated deferrable interest debentures ("Junior Subordinated Debentures") outstanding. Two issues of Junior Subordinated Debentures resulted from funds invested from the sale of trust preferred securities by FNB United Statutory Trust I ("FNB Trust I") and by FNB United Statutory Trust II ("FNB Trust II"), which are owned by FNB United. Two additional issues of Junior Subordinated Debentures were acquired on April 28, 2006 as a result of the merger with Integrity Financial Corporation. These acquired issues resulted from funds invested from the sale of trust preferred securities by Catawba Valley Capital Trust I ("Catawba Trust I") and by Catawba Valley Capital Trust II ("Catawba Trust II"), which were owned by Integrity and acquired by FNB United in the merger. FNB United initiated the redemption of the securities issued by Catawba Valley Trust I as of December 30, 2007 and that trust was subsequently dissolved.

FNB United fully and unconditionally guarantees the preferred securities issued by each trust through the combined operation of the debentures and other related documents. Obligations under these guarantees are unsecured and subordinate to senior and subordinated indebtedness of the Company. The trust preferred securities qualify as Tier 1 and Tier 2 capital for regulatory capital purposes.

On December 30, 2010 and February 28, 2011, the Bank consummated conversion agreements with SunTrust Bank, pursuant to which $12.5 million of the outstanding principal amount of the $15.0 million subordinated term loan from SunTrust to the Bank issued on June 30, 2008 was converted into 12.5 million shares of nonvoting, nonconvertible, nonredeemable cumulative preferred stock, par value $1.00 per share, of the Bank. The Bank amended its articles of association to authorize the preferred stock issued to SunTrust in the conversions. The preferred stock carries an 8.0% dividend rate. The remaining $2.5 million of subordinated debt owed by the Bank to SunTrust was ratified and confirmed but with interest being payable monthly rather than quarterly beginning on March 31, 2011. Immediately prior to the conversion, the Bank paid the interest accrued and unpaid to February 28, 2011 on the subordinated debt.

On August 1, 2011, the Bank entered into an agreement with SunTrust Bank to settle the $2.5 million in subordinated debt for cash in an amount equal to 35% of the principal amount of the debt, plus 100% of the accrued but unpaid interest on the debt as of the closing date of the proposed merger with Bank of Granite Corporation. The agreement also provides for the Bank's repurchase of the 12.5 million shares of Bank preferred stock owned by SunTrust Bank for cash in an amount equal to 25% of the aggregate liquidation amount of the preferred stock, plus 100% of the accrued but unpaid dividends thereon as of the closing date of the merger with Bank of Granite Corporation. See Note 22, Subsequent Events.

During the second quarter of 2010, the Company suspended payment of interest on trust preferred securities for liquidity purposes. The associated interest expense on junior subordinated debt has been fully accrued and is included in the Consolidated Statements of Operations.