Note 10 - Borrowed Funds

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Text Block]

10.   Borrowed Funds

Federal Funds Purchased.  There were no Federal funds purchased at any time during 2010 or 2012.  The average amount of Federal funds purchased  during 2011 was $27,000 with a weighted average interest rate of 1.29%.

Securities Sold under Agreements to Repurchase.Securities sold under agreements to repurchase were $1.3 billion with a weighted average rate of 3.84% at December 31, 2012, compared to $1.4 billion with a weighted average rate of 4.14% at December 31, 2011.  In May 2011, the Company prepaid a security sold under an agreement to repurchase of $50 million with a rate of 4.83% and incurred a prepayment penalty of $1.7 million.  In 2012, the Company modified $200.0 million of securities sold under agreements to repurchase by extending the term by an additional four years on average, reducing the rate of these agreements by an average of 168 basis points and removing the callable feature of these borrowings.  In 2012, the Company prepaid three securities sold under an agreement to repurchase for the total of $150 million with a weighted average rate of 4.43% and incurred prepayment penalties of $9.4 million.   Seven floating-to-fixed rate agreements totaling $400.0 million have initial floating rates for a period of time ranging from six months to one year, with floating rates ranging from the three-month LIBOR minus 200 basis points to three-month LIBOR minus 340 basis points. Thereafter, the rates are fixed for the remainder of the term, with interest rates ranging from 4.52% to 5.07%.  After the initial floating rate term, the counter parties have the right to terminate the transaction at par at the fixed rate reset date and quarterly thereafter. Thirteen fixed-to-floating rate agreements totaling $650.0 million have initial fixed rates ranging from 1.00% to 3.50% with initial fixed rate terms ranging from six months to 18 months.  For the remainder of the seven year term, the rates float at 8% minus the three-month LIBOR rate with a maximum rate ranging from 3.25% to 3.79% and minimum rate of 0.0%.  After the initial fixed rate term, the counter parties have the right to terminate the transaction at par at the floating rate reset date and quarterly thereafter.  The table below provides summary data for the $1.05 billion of callable securities sold under agreements to repurchase as of December 31, 2012:

(Dollars in millions)	Fixed-to-floating																		Floating-to-fixed						Total
Rate type	Float Rate																		Fixed Rate
Rate index	8% minus 3 month LIBOR
Maximum rate		3.79	%		3.53	%		3.50	%		3.50	%		3.53	%		3.25	%
Minimum rate		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
No. of agreements		3			1			4			3			1			1			3			4			20
Amount	$	150.0		$	50.0		$	200.0		$	150.0		$	50.0		$	50.0		$	200.0		$	200.0		$	1,050.0
Weighted average rate		3.78	%		3.53	%		3.50	%		3.50	%		3.53	%		3.25	%		4.69	%		5.00	%		4.04	%
Final maturity		2014			2014			2014			2015			2015			2015			2014			2017

The table below provides summary data for non-callable fixed rate securities sold under agreements to repurchase as of December 31, 2012:

Maturity	No. of Agreements		Amount (In thousands)		Weighted Average Interest Rate
3 years to 5 years		2	$	100,000		2.71	%
Over 5 years		2		100,000		2.86	%
Total		4	$	200,000		2.78	%

These transactions are accounted for as collateralized financing transactions and recorded at the amount at which the securities were sold. We may have to provide additional collateral for the repurchase agreements, as necessary.  The underlying collateral pledged for the repurchase agreements consists of U.S. Treasury securities, U.S. government agency security debt, and mortgage-backed securities with a fair value of $1.4 billion as of December 31, 2012, and $1.6 billion as of December 31, 2011.

The table below provides comparative data for securities sold under agreements to repurchase for the years indicated:

	2012			2011			2010
	(Dollars in thousands)
Average amount outstanding during the year (1)	$	1,361,475		$	1,448,363		$	1,560,215
Maximum amount outstanding at month-end (2)		1,400,000			1,559,000			1,566,000
Balance, December 31		1,250,000			1,400,000			1,561,000
Rate, December 31		3.84	%		4.14	%		4.18	%
Weighted average interest rate for the year		4.09	%		4.19	%		4.24	%

(1) Average balances were computed using daily averages.

(2) Highest month-end balances were January 2012, January 2011, and September 2010.

Advances from the Federal Home Loan Bank.  Total advances from the FHLB were $146.2 million with weighted average rate of 0.44% at December 31, 2012, compared to $225.0 million with weighted average rate of 2.08% at December 31, 2011.  The Company prepaid advances from the FHLB totaling $100.0 million at a rate of 4.60% and incurred prepayment penalties of $2.8 million in 2012 and prepaid advances totaling  $450.0 million with a weighted rate of 4.39% and incurred prepayment penalties of $18.5 million in 2011.

 The following relates to the outstanding advances at December 31, 2012, and 2011:

	2012					2011
Maturity	Amount (In thousands)		Weighted Average Interest Rate			Amount (In thousands)		Weighted Average Interest Rate
Within 90 days	$	125,000		0.28	%	$	-		0.00	%
91 days through 365 days		-		0.00	%		225,000		2.08	%
4 - 5 years		21,200		1.38	%		-		-
	$	146,200		0.44	%	$	225,000		2.08	%

Other borrowings from financial institutions.At December 31, 2012, there were no other borrowings from financial institutions.  At December 31, 2011, other borrowings from a financial institution were $880,000 with a weighted average rate of 0.55%.

Other Liabilities.  On November 23, 2004, the Company entered into an agreement with its Chief Executive Officer (“CEO”) pursuant to which the CEO agreed to defer any bonus amounts in excess of $225,000 for the year ended December 31, 2005, until January 1 of the first year following such time as the CEO separates from the Company.  Accordingly, an amount equal to $610,000 was deferred in 2004 and was accrued in other liabilities in the consolidated balance sheet.  The Company agreed to accrue interest on the deferred portion of the bonus at 7.0% per annum compounded quarterly.  The deferred amount will be increased each quarter by the amount of interest computed for that quarter.  Beginning on the tenth anniversary of the agreement, the interest rate will equal 275 basis points above the prevailing interest rate on the ten-year Treasury Note.  Interest of $71,000 during 2012, $67,000 during 2011, and $62,000 during 2010 was accrued on this deferred bonus.  The balance was $1.1 million at December 31, 2012, and $995,000 at December 31, 2011.