Borrowings

6 Months Ended

Jun. 30, 2014

Notes to Financial Statements [Abstract]

Note 18 – Borrowings

The following table presents the composition of federal funds purchased and assets sold under agreements to repurchase at June 30, 2014 and December 31, 2013.


(In thousands)	June 30, 2014		December 31, 2013
Federal funds purchased	$	250,000	$	-
Assets sold under agreements to repurchase		1,824,676		1,659,292
Total federal funds purchased and assets sold under agreements to repurchase	$	2,074,676	$	1,659,292

The repurchase agreements outstanding at June 30, 2014 were collateralized by $ 1.5 billion (December 31, 2013 - $ 1.3 billion) in investment securities available-for-sale, $ 256 million (December 31, 2013 - $ 309 million) in trading securities and $ 76 million (December 31, 2013 - $ 70 million) in securities sold not yet delivered in other assets. It is the Corporation's policy to maintain effective control over assets sold under agreements to repurchase; accordingly, such securities continue to be carried on the consolidated statements of financial condition.

In addition, there were repurchase agreements outstanding collateralized by $ 203 million in securities purchased under agreements to resell to which the Corporation has the right to repledge the securities (December 31, 2013 - $ 189 million). It is the Corporation's policy to take possession of securities purchased under agreements to resell. However, the counterparties to such agreements maintain effective control over such securities; accordingly, these securities are not reflected in the Corporation's consolidated statements of financial condition.

The following table presents the composition of other short-term borrowings at June 30, 2014 and December 31, 2013.

(In thousands)	June 30, 2014		December 31, 2013
Advances with the FHLB paying interest at maturity, at a fixed rate of 0.42%	$	30,000	$	400,000
Others		1,200		1,200
Total other short-term borrowings	$	31,200	$	401,200
Note: Refer to the Corporation's 2013 Annual Report for rates information at December 31, 2013.

The following table presents the composition of notes payable at June 30, 2014 and December 31, 2013.

(In thousands)		June 30, 2014		December 31, 2013

Advances with the FHLB with maturities ranging from 2014 through 2021 paying interest at
	monthly fixed rates ranging from 0.27% to 4.19 %	$	510,514	$	589,229

Unsecured senior debt securities maturing on 2019 paying interest semiannually at a
	fixed rate of 7.00%		450,000		-

Term notes maturing on 2014 paying interest semiannually at a fixed rate of 7.47%			675		675

Term notes maturing on 2014 paying interest monthly at a floating rate
	of 3.00% over the 10-year U.S. Treasury note rate^[1]		7		14

Junior subordinated deferrable interest debentures (related to trust preferred
	securities) with maturities ranging from 2027 to 2034 with fixed interest
	rates ranging from 6.125% to 8.327% (Refer to Note20)		439,800		439,800

Junior subordinated deferrable interest debentures (related to trust preferred securities)
	($936,000 less discount of $404,460 at December 31, 2013), with no stated maturity
	and a fixed interest rate of 5.00% until, but excluding December 5, 2013 and
	9.00% thereafter (Refer to Note 20)^[2]		936,000		531,540

Others			23,093		23,496
Total notes payable		$	2,360,089	$	1,584,754

Note: Refer to the Corporation's 2013 Annual Report for rates information at December 31, 2013.

[1] The 10-year U.S. Treasury note key index rate at June 30, 2014 and December 31, 2013 was 2.53% and 3.03%, respectively.

[2] The debentures are perpetual and may be redeemed by the Corporation at any time, subject to the consent of the Board of Governors of the Federal Reserve System. The discount on the debentures was being amortized over an estimated 30-year term that started in August 2009. During the quarter ended June 30, 2014, in connection with the repayment of these Notes completed on July 2, 2014, the Corporation accelerated the related amortization of the discount and deferred costs amounting to $414.1 million, which is reflected as interest expense in the consolidated statement of operations. The effective interest rate, including the discount accretion, was approximately 16% at December 31, 2013.

During the quarter ended June 30, 2014, the Corporation received approval from the Federal Reserve System to repay the $935 million in TARP Capital Purchase Program funds. On July 2, 2014, the Corporation completed the repayment of these funds, which were partially funded with $400 million from the proceeds of the issuance of its $450 million aggregate principal amount of 7% Senior Notes due on 2019, which settled on July 1, 2014. Accordingly, during the quarter ended June 30, 2014, the Corporation accelerated the related amortization of $414.1 million of discount and deferred costs, which is reflected as interest expense in the consolidated statement of operations. Refer to additional information on Note 20, Trust Preferred Securities and Note 37, Subsequent Events.

A breakdown of borrowings by contractual maturities at June 30, 2014 is included in the table below.

	Fed funds purchased
	and assets sold under			Short-term
(In thousands)	agreements to repurchase			borrowings	Notes payable		Total
Year
2014	$	1,332,479	$	31,200	$	16,905	$	1,380,584
2015		174,135		-		29,040		203,175
2016		453,062		-		247,105		700,167
2017		115,000		-		79,033		194,033
2018		-		-		107,296		107,296
Later years		-		-		944,710		944,710
No stated maturity		-		-		936,000		936,000
Total borrowings	$	2,074,676	$	31,200	$	2,360,089	$	4,465,965

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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