ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)

12 Months Ended

Dec. 31, 2016

ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) [Text Block]

NOTE 18 – ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)

The following is a summary of the advances from the FHLB:
		December 31,		December 31,
		2016		2015
	(In thousands)
	Short-term fixed-rate advances from FHLB, with a weighted-average
	interest rate of 0.78%	$	170,000	$	-
	Long-term fixed-rate advances from FHLB, with a weighted-average
	interest rate of 1.49% (December 31, 2015 - 1.30%)		500,000		455,000
		$	670,000	$	455,000

Advances from FHLB mature as follows:
		December 31,
		2016
	(In thousands)
	Within 30 days	$	170,000
	One to six months		-
	Six months to one year		200,000
	Over one to three years		300,000
	Total	$	670,000

Advances are received from the FHLB under an Advances, Collateral Pledge, and Security Agreement (the “Collateral Agreement”). Under the Collateral Agreement, the Corporation is required to maintain a minimum amount of qualifying mortgage collateral with a market value of generally 125% or higher than the outstanding advances. As of December 31, 2016, the estimated value of specific mortgage loans pledged as collateral amounted to $1.4 billion (2015 — $1.1billion), as computed by the FHLB for collateral purposes. The carrying value of such loans as of December 31, 2016 amounted to $1.7 billion (2015 — $1.4 billion). As of December 31, 2016, the Corporation had additional capacity of approximately $754.3million on this credit facility based on collateral pledged at the FHLB, including a haircut reflecting the perceived risk associated with the collateral. Haircut refers to the percentage by which an asset’s market value is reduced for the purpose of collateral levels. Advances may be repaid prior to maturity, in whole or in part, at the option of the borrower upon payment of any applicable fee specified in the contract governing such advance. In calculating the fee, due consideration is given to (i) all relevant factors, including but not limited to, any and all applicable costs of repurchasing and/or prepaying any associated liabilities and/or hedges entered into with respect to the applicable advance; (ii) the financial characteristics, in their entirety, of the advance being prepaid; and (iii), in the case of adjustable-rate advances, the expected future earnings of the replacement borrowing as long as the replacement borrowing is at least equal to the original advance’s par amount and the replacement borrowing’s tenor is at least equal to the remaining maturity of the prepaid advance.