UNSECURED BORROWINGS

3 Months Ended

Mar. 31, 2016

NOTE 7 ¾ UNSECURED BORROWINGS

Unsecured borrowings consist of 30-year junior subordinated notes issued in 2005 and 2006 and maturing in 2035 and 2036, for a total face amount of $100 million. In 2015 the Company retrospectively adopted ASU 2015-03, which requires debt issuance costs to be recorded as direct deductions from the carrying amounts of the related liabilities, consistent with debt discounts. Note balances net of deferred issuance costs, and related weighted average interest rates as of the indicated dates (calculated including issuance cost amortization and adjusted for effects of related currently-paying Derivatives held as cash flow hedges) as of March 31, 2016 and December 31, 2015 were as follows (dollars in thousands):

	March 31, 2016					December 31, 2015
	Borrowings Outstanding		Average Rate *			Borrowings Outstanding		Average Rate
Junior subordinated notes maturing in:
October 2035 ($35,000 face amount)	$	34,247		7.92	%	$	34,234		7.91	%
December 2035 ($40,000 face amount)		39,253		7.68			39,244		7.68
September 2036 ($25,000 face amount)		24,514		8.95			24,508		8.96
	$	98,014		8.08		$	97,986		8.08

The average borrowing rate for total unsecured borrowings, adjusted for the effects of related Derivatives held for hedging purposes, will decline to 7.77% effective September 15, 2016, coinciding with the 20-year floating rate period of the September 2036 notes.

The notes maturing in October 2035 and December 2035 are currently redeemable, in whole or in part, without penalty, at the Company’s option. The notes maturing in September 2036 are redeemable, in whole or in part, without penalty, at the Company’s option anytime on or after September 15, 2016.