Short and Long-Term Funding

9 Months Ended

Sep. 30, 2018

The following table presents the components of short-term funding (funding with original contractual maturities of one year or less), long-term funding (funding with original contractual maturities greater than one year), and FHLB advances (funding based on original contractual maturities).



	September 30, 2018			December 31, 2017
	($ in Thousands)
Short-Term Funding
Federal funds purchased	$	25,890		$	141,950
Securities sold under agreements to repurchase	140,666			182,865
Federal funds purchased and securities sold under agreements to repurchase	166,556			324,815
Commercial paper	43,604			67,467
Total short-term funding	$	210,159		$	392,282
Long-Term Funding
Senior notes, at par	$	550,000		$	250,000
Subordinated notes, at par	250,000			250,000
Other long-term funding and capitalized costs	(4,785		)	(2,718		)
Total long-term funding	795,215			497,282
Total short and long-term funding, excluding FHLB advances	$	1,005,375		$	889,564
FHLB Advances
Short-term FHLB advances	$	405,000		$	284,000
Long-term FHLB advances	2,927,655			2,900,168
Total FHLB advances	$	3,332,655		$	3,184,168

Total short and long-term funding	$	4,338,030		$	4,073,732

Securities Sold Under Agreements to Repurchase ("Repurchase Agreements")

The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Corporation may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Corporation to repurchase the assets. The obligation to repurchase the securities is reflected as a liability on the Corporation’s consolidated balance sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts (i.e., there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities). See Note 11 for additional disclosures on balance sheet offsetting.

The Corporation utilizes securities sold under agreements to repurchase to facilitate the needs of its customers. As of September 30, 2018, the Corporation pledged agency mortgage-related securities with a fair value of $237 million as collateral for the repurchase agreements. Securities pledged as collateral under repurchase agreements are maintained with the Corporation's safekeeping agents and are monitored on a daily basis due to the market risk of fair value changes in the underlying securities. The Corporation generally pledges excess securities to ensure there is sufficient collateral to satisfy short-term fluctuations in both the repurchase agreement balances and the fair value of the underlying securities.

The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of September 30, 2018 and December 31, 2017 are presented in the following table.



	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 days		30-90 days		Greater than 90 days		Total
					($ in Thousands)
September 30, 2018
Repurchase agreements
Agency mortgage-related securities	$	140,666	$	—	$	—	$	—	$	140,666
Total	$	140,666	$	—	$	—	$	—	$	140,666
December 31, 2017
Repurchase agreements
Agency mortgage-related securities	$	182,865	$	—	$	—	$	—	$	182,865
Total	$	182,865	$	—	$	—	$	—	$	182,865

Long-Term Funding

Senior Notes

In August 2018, Associated Bank, N.A. issued $300 million of senior notes, due August 2021, and callable July 2021. The senior notes have a fixed coupon interest rate of 3.50% and were issued at a discount.

In November 2014, the Corporation issued $250 million of senior notes, due November 2019, and callable October 2019. The senior notes have a fixed coupon interest rate of 2.75% and were issued at a discount.

Subordinated Notes

In November 2014, the Corporation issued $250 million of 10-year subordinated notes, due January 2025, and callable October 2024. The subordinated notes have a fixed coupon interest rate of 4.25% and were issued at a discount.

FHLB Advances

At September 30, 2018, the Corporation had $3.3 billion of FHLB advances, up $148 million from December 31, 2017.

As of September 30, 2018, the Corporation had $2.6 billion of putable FHLB advances with a one-time option where the FHLB can call the advance prior to the contractual maturity. The contractual weighted average life to the put date of these advances was 1.2 years, with put dates ranging from 2019 through 2020. The weighted average life to contractual maturity on these advances was 7.8 years, with those dates ranging from 2023 through 2028. As of September 30, 2018, it is anticipated that all of these advances will be called by the FHLB on their put date.

The original contractual maturity or next put date of the Corporation's FHLB advances as of September 30, 2018 and December 31, 2017 are presented in the following table.



	September 30, 2018				December 31, 2017
	Amount		Weighted Average Contractual Coupon Rate		Amount		Weighted Average Contractual Coupon Rate
	($ in Thousands)
Maturity or put date 1 year or less	$	1,371,059	1.76	%	$	2,434,000	1.26	%
After 1 but within 2	1,662,019		2.29	%	750,013		1.23	%
After 2 but within 3	216,289		2.53	%	155		4.91	%
After 3 years	83,289		2.62	%	—		—	%
FHLB advances and overall rate	$	3,332,655	2.10	%	$	3,184,168	1.26	%