BPFH » Topics » 13. FEDERAL HOME LOAN BANK BORROWINGS

These excerpts taken from the BPFH 10-K filed Mar 11, 2009.

13. FEDERAL HOME LOAN BANK BORROWINGS

The Banks are members of the Federal Home Loan Bank (“FHLB”) System. As members of the FHLB, the Banks have access to short and long-term borrowings. Borrowings from the FHLB are secured by the Banks’ stock in the FHLB and a blanket lien on “qualified collateral” defined principally as a percentage of the principal balance of certain types of mortgage loans. The percentage of collateral allowed varies between 15% and 83% based on the type of the underlying collateral. As of December 31, 2008, the Banks had $935.7 million of borrowings outstanding and available credit of $780.6 million. The Banks had no additional short-term federal fund lines with the FHLBs at December 31, 2008. The carrying amount of the Banks’ FHLB borrowings at December 31, 2008 is $936.0 million due to the unamortized amount of fair valuation adjustments at the time of the acquisition of the affiliate Bank.

As members of the FHLB, the Banks are required to invest in FHLB stock based on a percentage of outstanding advances in addition to a membership stock requirement. The minimum requirements vary depending on the FHLB membership. The Banks are required to own FHLB stock at least equal to 4.0% to 4.7%

 

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of outstanding advances depending on the individual FHLB membership. FHLB stock owned in excess of the minimum requirements can be redeemed at par upon the FHLB’s request. The FHLB redeems excess stock at its option at par from time to time. The Banks may not redeem additional purchases of stock prior to a five year minimum holding period.

As of December 31, 2008, the Banks’ FHLB stock holdings totaled $58.9 million. The Banks’ investment in FHLB stock is recorded at cost and is redeemable at par after a five-year holding period. The FHLBs have advised their members that they are focusing on preserving capital in response to ongoing market volatility and, accordingly, there will be little or no dividend payout in future quarterly periods. Further, a moratorium has been placed on excess stock repurchases. The Boston FHLB announced that the estimated fair value of private-label mortgage-backed securities it owned at September 30, 2008 was approximately $1.3 billion less than the $4.6 billion carrying value of the securities. If this unrealized loss were deemed to be an other-than-temporary loss in the future, it could exceed the Boston FHLB’s current level of retained earnings and possibly put into question whether the fair value of FHLB stock owned by the Company was less than par value. The FHLBs have stated that they expect and intend to hold their private-label mortgage-backed securities to maturity. The Company will continue to monitor its investment in FHLB stock.

A summary of borrowings, including fair value adjustments, from the FHLBs is as follows:

 

     December 31, 2008     December 31, 2007  
     Amount    Weighted
Average
Rate
    Amount    Weighted
Average
Rate
 
     (In thousands)  

Within 1 year

   $ 210,202    1.93 %   $ 305,531    4.39 %

Over 1 to 2 years

     299,300    4.29 %     67,737    4.42 %

Over 2 to 3 years

     129,955    4.04 %     197,053    4.93 %

Over 3 to 5 years

     164,692    4.16 %     133,392    4.71 %

Over 5 years

     131,888    4.19 %     133,283    4.31 %
                          

Total

   $ 936,037    3.69 %   $ 836,996    4.56 %
                          

 

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13. FEDERAL HOME LOAN BANK
BORROWINGS

The Banks are members of the Federal Home Loan Bank (“FHLB”) System. As members of the FHLB, the Banks have access
to short and long-term borrowings. Borrowings from the FHLB are secured by the Banks’ stock in the FHLB and a blanket lien on “qualified collateral” defined principally as a percentage of the principal balance of certain types of
mortgage loans. The percentage of collateral allowed varies between 15% and 83% based on the type of the underlying collateral. As of December 31, 2008, the Banks had $935.7 million of borrowings outstanding and available credit of $780.6
million. The Banks had no additional short-term federal fund lines with the FHLBs at December 31, 2008. The carrying amount of the Banks’ FHLB borrowings at December 31, 2008 is $936.0 million due to the unamortized amount of fair
valuation adjustments at the time of the acquisition of the affiliate Bank.

As members of the FHLB, the Banks are required to invest in
FHLB stock based on a percentage of outstanding advances in addition to a membership stock requirement. The minimum requirements vary depending on the FHLB membership. The Banks are required to own FHLB stock at least equal to 4.0% to 4.7%

 


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

STYLE="margin-top:0px;margin-bottom:0px"> 



of outstanding advances depending on the individual FHLB membership. FHLB stock owned in excess of the minimum requirements can be redeemed at par upon the
FHLB’s request. The FHLB redeems excess stock at its option at par from time to time. The Banks may not redeem additional purchases of stock prior to a five year minimum holding period.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">As of December 31, 2008, the Banks’ FHLB stock holdings totaled $58.9 million. The Banks’ investment in FHLB stock is recorded at cost and
is redeemable at par after a five-year holding period. The FHLBs have advised their members that they are focusing on preserving capital in response to ongoing market volatility and, accordingly, there will be little or no dividend payout in future
quarterly periods. Further, a moratorium has been placed on excess stock repurchases. The Boston FHLB announced that the estimated fair value of private-label mortgage-backed securities it owned at September 30, 2008 was approximately $1.3
billion less than the $4.6 billion carrying value of the securities. If this unrealized loss were deemed to be an other-than-temporary loss in the future, it could exceed the Boston FHLB’s current level of retained earnings and possibly put
into question whether the fair value of FHLB stock owned by the Company was less than par value. The FHLBs have stated that they expect and intend to hold their private-label mortgage-backed securities to maturity. The Company will continue to
monitor its investment in FHLB stock.

A summary of borrowings, including fair value adjustments, from the FHLBs is as follows:


 



























































































































































   December 31, 2008  December 31, 2007 
   Amount  Weighted
Average
Rate
  Amount  Weighted
Average
Rate
 
   (In thousands) 

Within 1 year

  $210,202  1.93% $305,531  4.39%

Over 1 to 2 years

   299,300  4.29%  67,737  4.42%

Over 2 to 3 years

   129,955  4.04%  197,053  4.93%

Over 3 to 5 years

   164,692  4.16%  133,392  4.71%

Over 5 years

   131,888  4.19%  133,283  4.31%
               

Total

  $936,037  3.69% $836,996  4.56%
               

 


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Federal Home Loan Bank Borrowings

The fair value reported for FHLB borrowings is estimated based on the discounted value of contractual cash flows. The discount rate used is based on the Company’s estimated current incremental borrowing rate for FHLB borrowings of similar maturities.

Federal Home Loan Bank Borrowings

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The fair value reported for FHLB borrowings is estimated based on the discounted value of contractual cash flows. The discount rate used is based on the
Company’s estimated current incremental borrowing rate for FHLB borrowings of similar maturities.

These excerpts taken from the BPFH 10-K filed Mar 14, 2008.

13. FEDERAL HOME LOAN BANK
BORROWINGS

The Banks are members of the Federal Home Loan Bank (“FHLB”) System. As members of a FHLB, the Banks have access
to short and long-term borrowings. Borrowings from the FHLB are secured by the Bank’s stock in the FHLB and a blanket lien on “qualified collateral” defined principally as a percentage of the principal balance of certain types of
mortgage loans. The percentage of collateral allowed varies between 25% and 75% based on the type of the underlying collateral. As of December 31, 2007, the Banks had $836.5 million of borrowings outstanding and available credit of
$743.9 million. The Banks had additional short-term federal fund lines with the FHLB’s of $15.0 million at December 31, 2007. The carrying amount of the Bank’s FHLB borrowings is $837.0 million due to the unamortized amount
of fair valuation adjustments at the time of acquisition.

As members of the FHLB, the Banks are required to invest in FHLB stock based on
a percentage of outstanding advances in addition to a membership stock requirement. The minimum requirements vary depending on the FHLB membership. The Banks’ are required to own FHLB stock at least equal to 4.5% to 4.7% of outstanding advances
depending on the individual FHLB membership. FHLB stock owned in excess of the minimum requirements can be redeemed at par upon the FHLB’s request. The FHLB redeems excess stock at its option at par from time to time. The Banks’ may not
redeem additional purchases of stock prior to a five year minimum holding period.

 


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As of December 31, 2007, the Banks’ FHLB stock holdings totaled $49.3 million. The
Banks’ investment in FHLB stock is recorded at cost and is redeemable at par after a five-year holding period.

A summary of
borrowings, including fair value adjustments, from the Federal Home Loan Banks is as follows:

 






















































































































































   December 31, 2007  December 31, 2006 

(In thousands)

  Amount  Weighted
Average
SIZE="1">Rate
  Amount  Weighted
Average
SIZE="1">Rate
 

Within 1 year

  $305,531  4.39% $254,902  5.16%

Over 1 to 2 years

   67,737  4.42%  62,440  4.09%

Over 2 to 3 years

   197,053  4.93%  63,532  4.47%

Over 3 to 5 years

   133,392  4.71%  145,783  5.10%

Over 5 years

   133,283  4.31%  76,246  4.51%
               

Total

  $836,996  4.56% $602,903  4.88%
               

Federal Home Loan Bank Borrowings

The fair value reported for FHLB borrowings is estimated based on the discounted value of contractual cash flows. The discount rate used is based on the Company’s estimated current incremental borrowing rate for FHLB borrowings of similar maturities.

This excerpt taken from the BPFH 10-K filed Feb 28, 2007.

Federal Home Loan Bank Borrowings

The fair value reported for FHLB borrowings is estimated based on the discounted value of contractual cash flows. The discount rate used is based on the Company’s estimated current incremental borrowing rate for FHLB borrowings of similar maturities.

This excerpt taken from the BPFH 8-K filed May 31, 2006.

13. FEDERAL HOME LOAN BANK BORROWINGS

Boston Private Bank is a member of the Federal Home Loan Bank ( “FHLB”) of Boston. Borel and FPB are members of the FHLB of San Francisco. Gibraltar is a member of the FHLB of Atlanta. As members of a FHLB, the Banks have access to short and long-term borrowings. Borrowings from the FHLB are secured by the Bank’s stock in the FHLB and a blanket lien on “qualified collateral” defined principally as a percentage of the principal balance of certain types of mortgage loans. The percentage of collateral allowed varies between 50% and 75% based on the type of the underlying collateral. As of December 31, 2005, Boston Private Bank had $320.5 million of borrowings outstanding and available credit of $259.5 million. Boston Private Bank had additional short-term federal fund lines with the FHLB of $15.0 million at December 31, 2005. Borel had no outstanding borrowings at December 31, 2005. Borel had available credit with the FHLB of $114.4 million as of December 31, 2005. FPB had no outstanding borrowings at December 31, 2005. FPB also had available credit with the FHLB of $86.2 million as of December 31, 2005. Gibraltar had $40.7 million of borrowings outstanding and available credit of $343.9 million at December 31, 2005. The carrying amount of Gibraltar’s FHLB borrowings is $41.5 million due to the unamortized amount of the fair market valuation adjustment at the time of acquisition.

As members of the FHLB, the Banks are required to invest in the common stock of the FHLB. In April of 2004, the FHLB changed their capital structure. At that time, all outstanding stock that the Banks owned was converted to Class B stock which may not be redeemed earlier than five years. Additional purchases of stock may not be redeemed earlier than five years from date of purchase. There is a membership stock investment base requirement in the amount of 35 basis points of all pledgable assets and an activity based stock requirement equal to 4.5% of outstanding advances from the FHLB. As and when such stock is redeemed, the Banks would receive from the FHLB an amount equal to the par value of the stock. As of December 31, 2005, the Banks’ FHLB stock holdings totaled $27.6 million. The Banks’ investment in FHLB stock is recorded at cost and is redeemable at par.

 

29


A summary of borrowings, including Gibraltar’s fair market value adjustment, from the Federal Home Loan Banks is as follows:

 

     December 31, 2005     December 31, 2004  

(In thousands)

   Amount   

Weighted

Average

Rate

    Amount   

Weighted

Average

Rate

 

Within 1 year

   $ 39,715    3.72 %   $ 17,500    3.61 %

Over 1 to 2 years

     58,904    4.01 %     38,179    3.65 %

Over 2 to 3 years

     56,621    3.99 %     58,504    3.99 %

Over 3 to 5 years

     97,575    4.72 %     72,282    3.83 %

Over 5 years

     109,190    4.54 %     88,722    4.78 %
                          

Total

   $ 362,005    4.32 %   $ 275,187    4.13 %
                          
This excerpt taken from the BPFH 10-K filed Mar 10, 2006.

13. FEDERAL HOME LOAN BANK BORROWINGS

Boston Private Bank is a member of the Federal Home Loan Bank ( “FHLB”) of Boston. Borel and FPB are members of the FHLB of San Francisco. Gibraltar is a member of the FHLB of Atlanta. As members of a FHLB, the Banks have access to short and long-term borrowings. Borrowings from the FHLB are secured by the Bank’s stock in the FHLB and a blanket lien on “qualified collateral” defined principally as a percentage of the principal balance of certain types of mortgage loans. The percentage of collateral allowed varies between 50% and 75% based on the type of the underlying collateral. As of December 31, 2005, Boston Private Bank had $320.5 million of borrowings outstanding and available credit of $259.5 million. Boston Private Bank had additional short-term federal fund lines with the FHLB of $15.0 million at December 31, 2005. Borel had no outstanding borrowings at December 31, 2005. Borel had available credit with the FHLB of $114.4 million as of December 31, 2005. FPB had no outstanding borrowings at December 31, 2005. FPB also had available credit with the FHLB of $86.2 million as of December 31, 2005. Gibraltar had $40.7 million of borrowings outstanding and available credit of $343.9 million at December 31, 2005. The carrying amount of Gibraltar’s FHLB borrowings is $41.5 million due to the unamortized amount of the fair market valuation adjustment at the time of acquisition.

As members of the FHLB, the Banks are required to invest in the common stock of the FHLB. In April of 2004, the FHLB changed their capital structure. At that time, all outstanding stock that the Banks owned was converted to Class B stock which may not be redeemed earlier than five years. Additional purchases of stock may

 

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not be redeemed earlier than five years from date of purchase. There is a membership stock investment base requirement in the amount of 35 basis points of all pledgable assets and an activity based stock requirement equal to 4.5% of outstanding advances from the FHLB. As and when such stock is redeemed, the Banks would receive from the FHLB an amount equal to the par value of the stock. As of December 31, 2005, the Banks’ FHLB stock holdings totaled $27.6 million. The Banks’ investment in FHLB stock is recorded at cost and is redeemable at par.

A summary of borrowings, including Gibraltar’s fair market value adjustment, from the Federal Home Loan Banks is as follows:

 

     December 31, 2005     December 31, 2004  

(In thousands)

   Amount    Weighted
Average
Rate
    Amount    Weighted
Average
Rate
 

Within 1 year

   $ 39,715    3.72 %   $ 17,500    3.61 %

Over 1 to 2 years

     58,904    4.01 %     38,179    3.65 %

Over 2 to 3 years

     56,621    3.99 %     58,504    3.99 %

Over 3 to 5 years

     97,575    4.72 %     72,282    3.83 %

Over 5 years

     109,190    4.54 %     88,722    4.78 %
                          

Total

   $ 362,005    4.32 %   $ 275,187    4.13 %
                          

 

This excerpt taken from the BPFH 10-K filed Mar 15, 2005.

12.   FEDERAL HOME LOAN BANK BORROWINGS

        Boston Private Bank is a member of the Federal Home Loan Bank (FHLB) of Boston. Borel and FSB are members of the FHLB of San Francisco. As members of a FHLB, the Banks have access to short and long-term borrowings. As of December 31, 2004, Boston Private Bank had $275.2 million of borrowings outstanding and available credit of $267.0 million. Boston Private Bank had additional short-term federal fund lines with the FHLB and correspondent banks of $130.0 million at December 31, 2004. Borrowings from the FHLB are secured by the Bank's stock in the FHLB and a blanket lien on "qualified collateral" defined principally as 75% of the carrying value of certain residential mortgage loans. Borel had no outstanding borrowings at December 31, 2004. Borel also had available credit with the FHLB and other correspondent banks of $80.5 million as of December 31, 2004. FSB had no outstanding borrowings at December 31, 2004. FSB also had available credit with the FHLB and other correspondent banks of $23.3 million as of December 31, 2004.

        As members of the FHLB, the Banks are required to invest in the common stock of the FHLB. In April of 2004, the FHLB changed their capital structure. At that time, all outstanding stock that the Banks owned was converted to Class B stock which may not be redeemed earlier than five years. Additional purchases of stock may not be redeemed earlier than five years from date of purchase. There is a membership stock investment base requirement in the amount of 35 basis points of all pledgable assets and an activity based stock requirement equal to 4.5% of outstanding advances from the FHLB. As and when such stock is redeemed, the Banks would receive from the FHLB an amount equal to the par value of the stock. As of December 31, 2004, the Banks' FHLB stock holdings totaled $20.1 million. The Banks' investment in FHLB stock is recorded at cost and is redeemable at par.

        A summary of borrowings from the Federal Home Loan Banks is as follows:

 
  December 31, 2004
  December 31, 2003
 
(Dollars in thousands)

  Amount
  Weighted Average Rate
  Amount
  Weighted Average Rate
 
Within 1 year   $ 17,500   3.61 % $ 6,344   2.82 %
Over 1 to 2 years     38,179   3.65 %   11,500   4.45 %
Over 2 to 3 years     58,504   3.99 %   21,586   4.87 %
Over 3 to 5 years     72,282   3.83 %   67,403   4.21 %
Over 5 years     88,722   4.78 %   91,017   4.73 %
   
 
 
 
 
  Total   $ 275,187   4.13 % $ 197,850   4.49 %
   
 
 
 
 

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