Borrowed Funds

Securities Sold under Agreements to Repurchase.

Securities sold under agreements to repurchase were

$350.0

million with a weighted average rate of

4.06%

December

31,

2016,

compared to

$400.0

million with a weighted average rate of

3.89%

December

31,

2015.

As of

December

31,

2016,

four

floating-to-fixed rate agreements totaling

$200.0

million with weighted average rate of

5.0%

and final maturity in

January

2017

have initial floating rates for

one

year, with floating rates of the

three

-month LIBOR rate minus

340

basis points. Thereafter, the rates are fixed for the remainder of the term, with interest rates ranging from

4.89%

5.07%.

As of

December

31,

2016,

three

fixed rate non-callable securities sold under agreements to repurchase totaled

$150

million with a weighted average rate of

2.81%,

compared to

four

fixed rate non-callable securities sold under agreements to repurchase totaling

$200

million with a weighted average rate of

2.78%

as of

December

31,

2015.

The final maturity for the

three

fixed rate non-callable securities sold under agreements to repurchase is

$50.0

million in

July

2017,

$50.0

million in

June

2018,

and

$50.0

million in

July

2018.

These transactions are accounted for as collateralized financing transactions and recorded at the amounts at which the securities were sold. The Company

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, and mortgage-backed securities with a fair value of

$372.0

million as of

December

31,

2016,

and

$430.2

million as of

December

31,

2015

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

	2016			2015			2014
	(Dollars in thousands)

Average amount outstanding during the year (1)	$	381,967		$	400,822		$	629,315
Maximum amount outstanding at month-end (2)		400,000			400,000			700,000
Balance, December 31		350,000			400,000			450,000
Rate, December 31		4.06	%		3.89	%		3.85	%
Weighted average interest rate for the year		4.01	%		3.95	%		3.92	%

(1)	Average balances were computed using daily averages.

(2)	Highest month-end balances were January 2016, January 2015, and January 2014.

As of

December

31,

2016,

over-night borrowings from the FHLB were

$275.0

million at a rate of

0.55%

compared to

$250.0

million at a rate of

0.27%

December

31,

2015.

December

31,

2016,

$75.0

million in advances from the FHLB were outstanding at a weighted average rate of

1.48%

compared to

$25.0

million in advances outstanding at a weighted average rate of

1.13%

December

31,

2015.

As of

December

31,

2016,

$25.0

million will mature in

March

2018

and

$50.0

million will mature in

December

2019.

Other Liabilities.

November

23,

2004,

the Company entered into an agreement with Mr. Dunson K. Cheng, pursuant to which he agreed to defer any bonus amounts in excess of

$225,000

for the year ended

December

31,

2005,

until the later of

January

of the

first

year following his separation from service from the Company or the

first

day of the

seventh

month following his separation from service 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. On

November

23,

2014,

the interest rate was reset to

5.06%

based on

275

basis points above the interest rate on the

ten

-year Treasury Note on that date. On

March

13,

2014,

the Compensation Committee of the Company awarded Mr. Cheng a cash bonus in the amount of

$300,000

for the quarter ended

December

31,

2013,

and provided as part of the award that payment of the bonus would be deferred until the later of

January

of the

first

year following his separation from service from the Company or the

first

day of the

seventh

month following his separation from service from the Company. The Company accrues interest on the deferred bonus at

5.02%

per annum compounded quarterly. Beginning on the

fifth

anniversary of the agreement, the interest rate will be reset at

350

basis points above the then prevailing interest rate on the

five

-year Treasury Note.

Interest of

$83,000

during

2016,

$79,000

during

2015,

and

$93,000

during

2014

was accrued on the deferred bonuses. The balance was

$1.7

million at

December

31,

2016,

and

$1.6

million at

December

31,

2015.