14. Borrowings

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


(dollars in thousands)	September 30,		December 31,
	2011		2010

Retail repurchase agreements	$	6,891	$	9,628
Federal Home Loan Bank advances		118,864		144,485
Subordinated debt		2,500		7,500
Junior subordinated debt		56,702		56,702

Total borrowings	$	184,957	$	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 September 30, 2011, the Bank had no line of credit at the FRBR. The Bank had no other federal funds purchased lines as of September 30, 2011.

At September 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)

2012	$	30,000
2013		20,122
2014		15,362
2015		3,000
2016		—
2017		—
2018 and thereafter		50,380

Total FHLB advances	$	118,864

The Bank had $18.0 million in a line of credit available with the FHLB of Atlanta at September 30, 2011. At September 30, 2011, current outstanding FHLB advances under the line amounted to $118.9 million and were at interest rates ranging from 0.36% 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 carried 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 (the "SunTrust Settlement") 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 Granite (the "Merger"). The agreement also provided 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 Granite. The closing of the transactions contemplated the SunTrust Settlement occurred on October 21, 2011. See Note 21, Capital Raise, Merger Agreement and Related Matters and Note 22, Subsequent Events.

During the second quarter of 2010, FNB United 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. On October 21, 2011 and in connection with the recapitalization of the Company, FNB United deposited with the various trustees for its trust preferred securities sums sufficient to pay the interest accrued and accruing to December 15, 2011 or December 30, 2011, as applicable, on the junior subordinated notes related to those trust preferred securities. Following that date, FNB United expects again to defer payment of interest on the outstanding junior subordinated notes related to its trust preferred securities.