Short-Term Borrowings and Long-Term Debt

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Text Block]

NOTE 11. Short-Term Borrowings and Long-Term Debt

First Federal has unsecured federal funds lines with various unaffiliated banks. These lines totaled $70.0 million as of December 31, 2012, $40.0 million as of December 30, 2011 and $35.0 million as of September 30, 2011. Borrowings from the federal funds lines and the Federal Reserve, which is secured by a portion of the manufactured housing loan portfolio, would be included in other short-term borrowings on the Consolidated Balance Sheets, if drawn, and are used to supplement other liquidity sources as needed. As of December 31, 2012, First Financial had borrowing availability of $257.7 million from these sources, as compared with $252.9 million as of December 31, 2011 and $249.7 million as of September 30, 2011. There were currently no funds drawn from these lines at the respective period end dates.

On March 19, 2004, First Financial issued $46.4 million of 30-year trust preferred securities through Capital Trust I, an unconsolidated special purpose trust, to unrelated institutional investors. The trust preferred securities qualify as Tier 1 capital under risk-based capital guidelines. Gross proceeds from the issuance were used by Capital Trust I to purchase junior subordinated deferred interest debt issued by First Financial. The subordinated debt is the only asset of Capital Trust I. The debt matures in thirty years and is an unsecured obligation of First Financial that ranks junior to First Financial’s other outstanding debt. Distributions on the trust preferred securities, which represent undivided beneficial interests in the assets of Capital Trust I, are payable quarterly in arrears at an annual rate of 7.00%, beginning July 7, 2004. The securities are callable and mature on April 6, 2034. Debt issuance costs, net of amortization, totaled $974 thousand at December 31, 2012 and $1.2 million at December 31, 2011 and September 30, 2011, and are included in other assets on the Consolidated Balance Sheets.

Other long-term debt consists of notes payable to several South Carolina non-profit organizations. These loans are part of a strategy to leverage low-income housing tax credits.

The following table presents long term debt and their related weighted average interest rates.

	As of
	December 31,								September 30,
(dollars in thousands)	2012				2011				2011
Junior subordinated debt to unconsolidated trust	$	46,392	7.00	%	$	46,392	7.00	%	$	46,392	7.00	%
Other long-term debt		812	4.59			812	4.59			812	4.59
	$	47,204	6.96	%	$	47,204	6.96	%	$	47,204	6.96	%

First Financial’s federal funds lines of credit are generally only utilized once a year, unless there is a liquidity need, and the balances as of period ends noted below are unutilized. As of or for the year ended December 31, 2012, quarter ended December 31, 2011, and year ended September 30, 2011 the outstanding balance, maximum amount outstanding at any month end, daily average and the weighted average rate were all nominal. The following table presents information related to the various forms of borrowings utilized.

	As of or for the Year Ended December 31,			As of or for the Quarter Ended December 31,			As of or for the Year Ended September 30,
(dollars in thousands)	2012			2011			2011
Junior subordinated debt to unconsolidated trust
Balance	$	46,392		$	46,392		$	46,392
Weighted average rate		7.00	%		7.00	%		7.00	%
During the year
Maximum amount outstanding at any month end		46,392			46,392			46,392
Daily average		46,392			46,392			46,392
Weighted average rate		7.00	%		7.00	%		7.00	%
Other long-term debt
Balance	$	812		$	812		$	812
Weighted average rate		4.59	%		4.59	%		4.59	%
During the year
Maximum amount outstanding at any month end	$	812		$	812		$	812
Daily average		812			812			812
Weighted average rate		4.59	%		4.59	%		4.59	%