Short-Term Borrowings

6 Months Ended

Jun. 30, 2015

Short Term Debt Other Disclosures [Abstract]

Borrowings

NOTE 10 – Borrowings

Our short-term financing is generally obtained through short-term bank line financing on an uncommitted, secured basis, committed bank line financing on an unsecured basis, and securities lending arrangements. We borrow from various banks on a demand basis with company-owned and customer securities pledged as collateral. The value of customer-owned securities used as collateral is not reflected in the consolidated statements of financial condition. Our uncommitted secured lines of credit at June 30, 2015, totaled $780.0 million with four banks and are dependent on having appropriate collateral, as determined by the bank agreements, to secure an advance under the line. The availability of our uncommitted lines is subject to approval by the individual banks each time an advance is requested and may be denied. Our peak daily borrowing was $543.3 million during the six months ended June 30, 2015. There are no compensating balance requirements under these arrangements.

Our committed bank line financing at June 30, 2015, consisted of a $100.0 million revolving credit facility. The credit facility expires in December 2017. The applicable interest rate under the revolving credit facility is calculated as a per annum rate equal to the London Interbank Offered Rate (“LIBOR”) plus 2.00%, as defined in the revolving credit facility. At June 30, 2015, we had no advances on our revolving credit facility and were in compliance with all covenants.

At June 30, 2015, short-term borrowings from banks were $543.3 million at an average rate of 1.00%, which were collateralized by company-owned securities valued at $748.1 million. At December 31, 2014, we had no short-term borrowings. The average bank borrowing was $31.1] million and $252.3 million for the three months ended June 30, 2015 and 2014, respectively, at average daily interest rates of 1.02% and 1.12%, respectively. The average bank borrowing was $48.5 million and $175.4 million for the six months ended June 30, 2015 and 2014, respectively, at average daily interest rates of 1.00% and 1.13%, respectively.

The average outstanding securities lending arrangements utilized in financing activities were $43.0 million and $68.1 million during the three months ended June 30, 2015 and 2014, respectively, at average daily interest rates of 0.29% and 0.19%, respectively. The average outstanding securities lending arrangements utilized in financing activities were $39.1 million and $70.5 million during the six months ended June 30, 2015 and 2014, respectively, at average daily interest rates of 0.27% and 0.18%, respectively. Customer-owned securities were utilized in these arrangements.