Borrowing Arrangements

9 Months Ended

Sep. 30, 2019

Information related to borrowings is provided in the table below (dollars in thousands):



	September 30, 2019			December 31, 2018
Other borrowings:
Balance at end of period	$	9,626		$	36,810
Average amount outstanding during the period⁽¹⁾	14,894			10,880
Maximum amount outstanding during the period⁽²⁾	28,354			36,810
Weighted average interest rate during the period⁽³⁾	1.7		%	1.4		%
Interest rate at end of period ⁽⁴⁾	1.4		%	2.1		%

Federal Home Loan Bank borrowings:
Balance at end of period	$	978,951		$	719,065
Average amount outstanding during the period ⁽¹⁾	817,978			720,785
Maximum amount outstanding during the period ⁽²⁾	1,004,997			957,231
Weighted average interest rate during the period ⁽³⁾	2.1		%	1.8		%
Interest rate at end of period ⁽⁴⁾	2.2		%	2.3		%


(1)	The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances by the number of days in the period.


(2)	The maximum amount outstanding at any month-end during the period.


(3)	The weighted average interest rate during the period was computed by dividing the actual interest expense (annualized for interim periods) by the average amount outstanding during the period. The weighted average interest rate on the FHLB borrowings includes the effect of interest rate swaps.


(4)	Stated rate.

Maturities of the obligations associated with our borrowing arrangements based on scheduled repayments at September 30, 2019 are as follows (in thousands):



	Payments Due by Period
	Less than 1 Year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		Thereafter		Total
Other borrowings	$	9,626	$	—	$	—	$	—	$	—	$	—	$	9,626
Federal Home Loan Bank borrowings	962,165		11,319		—		—		—		5,467		978,951
Total obligations	$	971,791	$	11,319	$	—	$	—	$	—	$	5,467	$	988,577

Other borrowings include federal funds purchased and repurchase agreements. Southside Bank has three unsecured lines of credit for the purchase of overnight federal funds at prevailing rates with Frost Bank, TIB – The Independent Bankers Bank and Comerica Bank for $40.0 million, $15.0 million and $7.5 million, respectively. There were no federal funds purchased at September 30, 2019. There were $28.0 million of federal funds purchased at December 31, 2018. Southside Bank has a $5.0 million line of credit with Frost Bank to be used to issue letters of credit, and at September 30, 2019, the line had no outstanding letters of credit. At September 30, 2019, the amount of additional funding Southside Bank could obtain from FHLB, collateralized by securities, FHLB stock and nonspecified loans and securities, was approximately $1.27 billion, net of FHLB stock purchases required. Southside Bank currently has no outstanding letters of credit from FHLB held as collateral for its public fund deposits.

Southside Bank enters into sales of securities under repurchase agreements. These repurchase agreements totaled $9.6 million and $8.8 million at September 30, 2019 and December 31, 2018, respectively, and had maturities of less than ten months. These repurchase agreements are secured by investment and MBS securities and are stated at the amount of cash received in connection with the transaction.

FHLB borrowings represent borrowings with fixed and floating interest rates ranging from 1.37% to 4.799% and with remaining maturities of 1 day to 8.8 years at September 30, 2019. FHLB borrowings may be collateralized by FHLB stock, nonspecified loans and/or securities.

Southside Bank has entered into various variable rate advance agreements with the FHLB. These advance agreements totaled $310.0 million at both September 30, 2019 and December 31, 2018. Three of the variable rate advance agreements have interest rates tied to three-month LIBOR and the remaining agreements have interest rates tied to one-month LIBOR. In connection with $270.0 million of these variable rate advance agreements, Southside Bank also entered into various interest rate swap contracts that are treated as cash flow hedges under ASC Topic 815, “Derivatives and Hedging” that effectively convert the variable rate advance agreements to fixed interest rates. The interest rate swap contracts had an average interest rate of 1.58% with an average weighted maturity of 4.1 years at September 30, 2019. Refer to “Note 10 - Derivative Financial Instruments and Hedging Activities” in our consolidated financial statements included in this report for a detailed description of our hedging policy and methodology related to derivative instruments.