TCF Bank 2015 Annual Report Download - page 94

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79
Note 11. Long-term Borrowings
Long-term borrowings consisted of the following.
At December 31,
2015 2014
(Dollars in thousands) Stated
Maturity Amount Stated Rate Amount Stated Rate
Federal Home Loan Bank advances 2015 $ — —% $ 125,000 0.37% - 0.38%
2016 447,000 0.54% - 1.17 547,000 0.25 -1.17
2017 125,000 0.49 -0.51 275,000 0.25
Subtotal 572,000 947,000
Subordinated bank notes 2016 74,994 5.50 74,930 5.50
2022 109,282 6.25 109,194 6.25
2025 149,126 4.60 ——
Hedge-related basis adjustment(1) (209) —
Subtotal 333,193 184,124
Discounted lease rentals 2015 — — 32,904 2.39 -7.95
2016 48,120 2.39 -7.95 27,539 2.39 -7.95
2017 41,969 2.45 -7.88 20,580 2.45 -7.95
2018 24,496 2.55 -7.95 9,032 2.63 -7.95
2019 9,329 2.53 -6.00 2,589 2.63 -5.05
2020 2,035 2.95 -5.15 160 4.57
2021 83 4.57 83 4.57
Subtotal 126,032 92,887
Other long-term borrowings 2015 — —2,670 1.36
2016 2,685 1.36 2,642 1.36
2017 2,742 1.36 2,742 1.36
Subtotal 5,427 8,054
Total long-term borrowings $ 1,036,652 $1,232,065
(1) Related to subordinated bank notes with a stated maturity of 2025 at December 31, 2015.
At December 31, 2015, TCF Bank had pledged loans secured by residential and commercial real estate and FHLB
stock with an aggregate carrying value of $4.6 billion as collateral for FHLB advances. At December 31, 2015,
$125.0 million of FHLB advances outstanding were prepayable monthly at TCF's option.
On February 27, 2015, TCF Bank issued $150.0 million of subordinated notes due February 27, 2025 with a fixed-
rate coupon of 4.60% per annum (the "2025 Notes"), at a price to investors of 99.375% of the principal amount. In
addition, TCF Bank incurred issuance costs of $1.4 million. Both the discount to the principal amount and issuance
costs are amortized as interest expense over the full term of the notes using the effective interest method. Interest is
payable semi-annually, in arrears, on February 27 and August 27, and commenced on August 27, 2015. Simultaneously,
TCF Bank entered into an interest rate swap agreement with a total notional amount of $150.0 million designated as
a fair value hedge of the 2025 Notes. The effect of the interest rate swap is to effectively convert the fixed-rate on the
2025 Notes to a floating interest rate based on the three-month London InterBank Offered Rate ("LIBOR") plus a fixed
number of basis points on the notional amount. See Note 18, Derivative Instruments, for additional information regarding
the interest rate swap.