SEC Filing | United Community Banks, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___________ to ___________

Commission file number 001-35095

UNITED COMMUNITY BANKS, INC.

(Exact name of registrant as specified in its charter)

Georgia		58-1807304
(State of Incorporation)		(I.R.S. Employer Identification No.)

125 Highway 515 East
Blairsville, Georgia		30512
Address of Principal Executive Offices		(Zip Code)

(706) 781-2265

(Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES x NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x

Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

YES o NO x

Common stock, par value $1 per share 45,230,240 shares voting and 14,189,006 shares non-voting outstanding as of October 31, 2013.

INDEX


PART I - Financial Information

	Item 1.	Financial Statements.

		Consolidated Statement of Income (unaudited) for the Three and Nine Months Ended September 30, 2013 and 2012	3

		Consolidated Statement of Comprehensive Income (unaudited) for the Three and Nine Months Ended September 30, 2013 and 2012	4

		Consolidated Balance Sheet (unaudited) at September 30, 2013, December 31, 2012 and September 30, 2012	5

		Consolidated Statement of Changes in Shareholders’ Equity (unaudited) for the Nine Months Ended September 30, 2013 and 2012	6

		Consolidated Statement of Cash Flows (unaudited) for the Nine Months Ended September 30, 2013 and 2012	7

		Notes to Consolidated Financial Statements	8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	38

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	61

	Item 4.	Controls and Procedures.	61

PART II - Other Information

	Item 1.	Legal Proceedings.	62
	Item 1A.	Risk Factors.	62
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	62
	Item 3.	Defaults Upon Senior Securities.	62
	Item 4.	Mine Safety Disclosures.	62
	Item 5.	Other Information.	62
	Item 6.	Exhibits.	63

Part I – Financial Information

Item 1 – Financial Statements

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in thousands, except per share data)	2013		2012			2013			2012

Interest revenue:
Loans, including fees	$	50,114	$	53,868		$	151,776		$	163,805
Investment securities, including tax exempt of $202, $225, $624 and $737		9,872		10,706			29,518			34,772
Deposits in banks and short-term investments		1,007		985			2,793			3,093
Total interest revenue		60,993		65,559			184,087			201,670

Interest expense:
Deposits:
NOW		413		447			1,286			1,587
Money market		545		599			1,641			1,901
Savings		37		37			109			112
Time		2,486		4,612			8,636			15,844
Total deposit interest expense		3,481		5,695			11,672			19,444
Short-term borrowings		525		514			1,563			2,463
Federal Home Loan Bank advances		16		26			65			882
Long-term debt		3,003		2,372			8,331			7,119
Total interest expense		7,025		8,607			21,631			29,908
Net interest revenue		53,968		56,952			162,456			171,762
Provision for loan losses		3,000		15,500			62,500			48,500
Net interest revenue after provision for loan losses		50,968		41,452			99,956			123,262

Fee revenue:
Service charges and fees		8,456		7,696			23,831			23,295
Mortgage loan and other related fees		2,554		2,800			8,212			7,221
Brokerage fees		1,274		709			3,104			2,331
Securities gains, net		-		-			116			7,047
Loss from prepayment of debt		-		-			-			(6,681	)
Other		1,860		2,559			8,019			8,797
Total fee revenue		14,144		13,764			43,282			42,010
Total revenue		65,112		55,216			143,238			165,272

Operating expenses:
Salaries and employee benefits		23,090		22,918			71,416			72,440
Communications and equipment		3,305		3,254			9,819			9,620
Occupancy		3,379		3,539			10,195			10,849
Advertising and public relations		962		934			2,937			2,868
Postage, printing and supplies		644		954			2,401			2,849
Professional fees		2,650		2,180			7,515			6,107
Foreclosed property		194		3,706			7,678			9,382
FDIC assessments and other regulatory charges		2,405		2,537			7,415			7,592
Amortization of intangibles		427		728			1,623			2,190
Other		3,041		4,033			11,691			12,151
Total operating expenses		40,097		44,783			132,690			136,048
Net income before income taxes		25,015		10,433			10,548			29,224
Income tax expense (benefit)		9,515		(135	)		(246,681	)		629
Net income		15,500		10,568			257,229			28,595
Preferred stock dividends and discount accretion		3,059		3,041			9,166			9,103
Net income available to common shareholders	$	12,441	$	7,527		$	248,063		$	19,492

Earnings per common share
Basic	$	.21	$	.13		$	4.24		$	.34
Diluted		.21		.13			4.24			.34
Weighted average common shares outstanding
Basic		59,100		57,880			58,443			57,826
Diluted		59,202		57,880			58,444			57,826

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Comprehensive Income (Unaudited)
(in thousands)	Three Months Ended September 30,									Nine Months Ended September 30,
2013	Before- tax Amount			Tax (Expense) Benefit			Net of Tax Amount			Before- tax Amount			Tax (Expense) Benefit			Net of Tax Amount

Net (loss) income	$	25,015		$	(9,515	)	$	15,500		$	10,548		$	246,681		$	257,229
Other comprehensive income (loss):
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding gains (losses) arising during period		(13,215	)		4,971			(8,244	)		(26,932	)		10,148			(16,784	)
Reclassification adjustment for gains included in net income		-			-			-			(116	)		45			(71	)
Adjustment of valuation allowance for the change in deferred taxes arising from unrealized gains and losses on available-for-sale securities and release of valuation allowance		-			-			-			-			(2,950	)		(2,950	)
Net unrealized gains (losses)		(13,215	)		4,971			(8,244	)		(27,048	)		7,243			(19,805	)
Amortization of gains included in net income on available-for-sale securities transferred to held-to-maturity		(214	)		82			(132	)		(804	)		309			(495	)
Adjustment of valuation allowance for the change in deferred taxes arising from the amortization of gains included in net income (loss) on available-for-sale securities transferred to held-to-maturity and release of valuation allowance		-			-			-			-			1,293			1,293
Net unrealized losses		(214	)		82			(132	)		(804	)		1,602			798
Amounts reclassified into net income on cash flow hedges		(58	)		23			(35	)		(902	)		351			(551	)
Unrealized losses on derivative financial instruments accounted for as cash flow hedges		(3,369	)		1,321			(2,048	)		8,733			(3,386	)		5,347
Adjustment of valuation allowance for the change in deferred taxes arising from unrealized gains and losses and amortization of gains included in net income on cash flow hedges and release of valuation allowance		-			-			-						13,698			13,698
Net unrealized losses		(3,427	)		1,344			(2,083	)		7,831			10,663			18,494
Net actuarial loss on defined benefit pension plan		-			-			-			(415	)		161			(254	)
Amortization of prior service cost and actuarial losses included in net periodic pension cost for defined benefit pension plan		133			(52	)		81			398			(155	)		243
Net defined benefit pension plan activity		133			(52	)		81			(17	)		6			(11	)

Total other comprehensive income (loss)		(16,723	)		6,345			(10,378	)		(20,038	)		19,514			(524	)

Comprehensive income	$	8,292		$	(3,170	)	$	5,122		$	(9,490	)	$	266,195		$	256,705

2012

Net income	$	10,433		$	135		$	10,568		$	29,224		$	(629	)	$	28,595
Other comprehensive income (loss):
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding gains (losses) arising during period		5,813			(2,139	)		3,674			6,737			(2,415	)		4,322
Reclassification adjustment for gains included in net income		-			-			-			(7,047	)		2,631			(4,416	)
Valuation allowance for the change in deferred taxes arising from unrealized gains and losses on available-for-sale securities		-			2,139			2,139			-			(216	)		(216	)
Net unrealized gains (losses)		5,813			-			5,813			(310	)		-			(310	)
Amortization of gains included in net income on available-for-sale securities transferred to held-to-maturity		(499	)		189			(310	)		(1,312	)		497			(815	)
Valuation allowance for the change in deferred taxes arising from the amortization of gains included in net income (loss) on available-for-sale securities transferred to held-to-maturity		-			(189	)		(189	)		-			(497	)		(497	)
Net unrealized losses		(499	)		-			(499	)		(1,312	)		-			(1,312	)
Amortization of gains included in net income on terminated derivative financial instruments that were previously accounted for as cash flow hedges		(763	)		297			(466	)		(3,077	)		1,197			(1,880	)
Unrealized losses on derivative financial instruments accounted for as cash flow hedges		(3,943	)		1,534			(2,409	)		(8,798	)		3,422			(5,376	)
Valuation allowance for the change in deferred taxes arising from unrealized gains and losses and amortization of gains included in net income on cash flow hedges		-			(1,831	)		(1,831	)		-			(4,619	)		(4,619	)
Net unrealized losses		(4,706	)		-			(4,706	)		(11,875	)		-			(11,875	)
Net actuarial loss on defined benefit pension plan		-			-			-			-			-			-
Amortization of prior service cost and actuarial losses included in net periodic pension cost for defined benefit pension plan		154			(60	)		94			462			(180	)		282
Valuation allowance for the change in deferred taxes arising from reclassification of unamortized prior service cost and actuarial losses and amortization of prior service cost and actuarial losses		-			60			60			-			180			180
Net defined benefit pension plan activity		154			-			154			462			-			462

Total other comprehensive income (loss)		762			-			762			(13,035	)		-			(13,035	)

Comprehensive income	$	11,195		$	135		$	11,330		$	16,189		$	(629	)	$	15,560

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
	September 30,			December 31,			September 30,
(in thousands, except share and per share data)	2013			2012			2012

ASSETS
Cash and due from banks	$	70,986		$	66,536		$	57,270
Interest-bearing deposits in banks		131,147			124,613			119,355
Short-term investments		62,000			60,000			45,000
Cash and cash equivalents		264,133			251,149			221,625
Securities available for sale		1,963,424			1,834,593			1,761,994
Securities held to maturity (fair value $214,651, $261,131 and $281,336)		205,613			244,184			262,648
Mortgage loans held for sale		11,987			28,821			30,571
Loans, net of unearned income		4,267,067			4,175,008			4,137,845
Less allowance for loan losses		(80,372	)		(107,137	)		(107,642	)
Loans, net		4,186,695			4,067,871			4,030,203
Assets covered by loss sharing agreements with the FDIC		31,207			47,467			53,070
Premises and equipment, net		165,993			168,920			170,532
Bank owned life insurance		80,537			81,867			81,574
Accrued interest receivable		18,199			18,659			19,133
Other intangible assets		3,888			5,510			6,237
Foreclosed property		4,467			18,264			26,958
Net deferred tax asset		269,784			-			-
Other assets		37,366			34,954			34,690
Total assets	$	7,243,293		$	6,802,259		$	6,699,235
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand	$	1,418,782		$	1,252,605		$	1,210,703
NOW		1,279,134			1,316,453			1,184,341
Money market		1,197,495			1,149,912			1,126,312
Savings		249,044			227,308			222,431
Time:
Less than $100,000		925,089			1,055,271			1,123,672
Greater than $100,000		624,019			705,558			731,766
Brokered		419,344			245,033			223,474
Total deposits		6,112,907			5,952,140			5,822,699
Short-term borrowings		53,769			52,574			53,243
Federal Home Loan Bank advances		125			40,125			50,125
Long-term debt		129,865			124,805			120,285
Unsettled securities purchases		11,610			-			24,319
Accrued expenses and other liabilities		82,800			51,210			43,309
Total liabilities		6,391,076			6,220,854			6,113,980
Shareholders' equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series A; $10 stated value; 21,700 shares issued and outstanding		217			217			217
Series B; $1,000 stated value; 180,000 shares issued and outstanding		179,714			178,557			178,183
Series D; $1,000 stated value; 16,613 shares issued and outstanding		16,613			16,613			16,613
Common stock, $1 par value; 100,000,000 shares authorized;
45,222,839, 42,423,870 and 42,393,319 shares issued and outstanding		45,223			42,424			42,393
Common stock, non-voting, $1 par value; 30,000,000 shares authorized;
14,189,006, 15,316,794 and 15,316,794 shares issued and outstanding		14,189			15,317			15,317
Common stock issuable; 242,262, 133,238 and 129,270 shares		3,979			3,119			3,247
Capital surplus		1,077,536			1,057,951			1,056,998
Accumulated deficit		(461,090	)		(709,153	)		(711,369	)
Accumulated other comprehensive loss		(24,164	)		(23,640	)		(16,344	)
Total shareholders' equity		852,217			581,405			585,255
Total liabilities and shareholders' equity	$	7,243,293		$	6,802,259		$	6,699,235

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Changes in Shareholders' Equity (Unaudited)

For the Nine Months Ended September 30,

																					Accumulated
	Preferred Stock								Non-Voting			Common									Other
(in thousands, except share and per share data)	Series		Series		Series		Common		Common			Stock			Capital			Accumulated			Comprehensive
(in thousands, except share and per share data)		A		B		D	Stock		Stock			Issuable			Surplus			Deficit			Income (Loss)			Total
Balance, December 31, 2011	$	217	$	177,092	$	16,613	$	41,647	$	15,914		$	3,233		$	1,054,940		$	(730,861	)	$	(3,309	)	$	575,486
Net income																			28,595						28,595
Other comprehensive loss																						(13,035	)		(13,035	)
Common stock issued to dividend reinvestment plan and employee benefit plans (87,086 shares)								86								616									702
Conversion of non-voting common stock to voting common stock (597,415 shares)								597		(597	)														-
Amortization of stock options and restricted stock awards																1,412									1,412
Vesting of restricted stock (59,081 shares issued, 36,673 shares deferred)								60					155			(257	)								(42	)
Deferred compensation plan, net, including dividend equivalents													149												149
Shares issued from deferred compensation plan (2,637 shares)								3					(290	)		287									-
Preferred stock dividends:
Series A																			(9	)					(9	)
Series B				1,091															(7,841	)					(6,750	)
Series D																			(1,253	)					(1,253	)
Balance, September 30, 2012	$	217	$	178,183	$	16,613	$	42,393	$	15,317		$	3,247		$	1,056,998		$	(711,369	)	$	(16,344	)	$	585,255
Balance, December 31, 2012	$	217	$	178,557	$	16,613	$	42,424	$	15,317		$	3,119		$	1,057,951		$	(709,153	)	$	(23,640	)	$	581,405
Net income																			257,229						257,229
Other comprehensive income																						(524	)		(524	)
Common stock issued to dividend reinvestment plan and to employee benefit plans (49,830 shares)								50								532									582
Conversion of non-voting common stock to voting (1,127,788 shares)								1,128		(1,128	)														-
Warrant exercise (1,551,126 shares)								1,551								17,838									19,389
Amortization of stock options and restricted stock awards																2,168									2,168
Vesting of restricted stock, net of shares surrendered to cover payroll taxes (51,995 shares issued, 115,664 shares deferred)								52					1,693			(1,900	)								(155	)
Deferred compensation plan, net, including dividend equivalents													132												132
Shares issued from deferred compensation plan (18,230 shares)								18					(965	)		947									-
Preferred stock dividends:
Series A																			(9	)					(9	)
Series B				1,157															(7,907	)					(6,750	)
Series D																			(1,250	)					(1,250	)
Balance, September 30, 2013	$	217	$	179,714	$	16,613	$	45,223	$	14,189		$	3,979		$	1,077,536		$	(461,090	)	$	(24,164	)	$	852,217

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Cash Flows (Unaudited)


	Nine Months Ended
	September 30,
(in thousands)	2013			2012
Operating activities:
Net income	$	257,229		$	28,595
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion		20,847			24,478
Provision for loan losses		62,500			48,500
Stock based compensation		2,168			1,412
Deferred income tax benefit		(250,054	)		-
Securities gains, net		(116	)		(7,047	)
Losses and write downs on sales of other real estate owned		5,141			5,687
Loss on prepayment of borrowings		-			6,681
Changes in assets and liabilities:
Other assets and accrued interest receivable		16,225			40,708
Accrued expenses and other liabilities		31,562			(3,108	)
Mortgage loans held for sale		16,834			(6,690	)
Net cash provided by operating activities		162,336			139,216

Investing activities:
Investment securities held-to-maturity:
Proceeds from maturities and calls		45,578			65,040
Purchases		(8,481	)		-
Investment securities available-for-sale:
Proceeds from sales		20,751			371,103
Proceeds from maturities and calls		399,304			492,768
Purchases		(574,020	)		(818,048	)
Net increase in loans		(288,514	)		(104,806	)
Proceeds from note sales		91,913			-
Collections from FDIC under loss sharing agreements		5,121			7,301
Proceeds from sales of premises and equipment		3,550			667
Purchases of premises and equipment		(7,533	)		(3,231	)
Proceeds from sale of other real estate		24,049			22,309
Net cash (used in) provided by investing activities		(288,282	)		33,103

Financing activities:
Net change in deposits		160,767			(275,284	)
Net change in short-term borrowings		1,195			(53,814	)
Proceeds from Federal Home Loan Bank advances		650,000			1,629,000
Settlement of Federal Home Loan Bank advances		(690,000	)		(1,621,701	)
Proceeds from issuance of senior debt		40,000			-
Repayment of subordinated debentures		(35,000	)		-
Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans		582			702
Proceeds from warrant exercise		19,389			-
Cash dividends on preferred stock		(8,003	)		(8,013	)
Net cash provided by (used in) financing activities		138,930			(329,110	)
Net change in cash and cash equivalents		12,984			(156,791	)
Cash and cash equivalents at beginning of period		251,149			378,416
Cash and cash equivalents at end of period	$	264,133		$	221,625

Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest	$	26,517		$	32,668
Income taxes		2,361			(27,103	)
Unsettled securities purchases		11,610			24,319
Transfers of loans to foreclosed property		18,460			26,854

See accompanying notes to consolidated financial statements.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 1 – Accounting Policies

The accounting and financial reporting policies of United Community Banks, Inc. (“United”) and its subsidiaries conform to accounting principles generally accepted in the United States of America (“GAAP”) and general banking industry practices. The accompanying interim consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated. A more detailed description of United’s accounting policies is included in its Annual Report on Form 10-K for the year ended December 31, 2012.

In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods.

Note 2 –Accounting Standards Updates and Recently Adopted Standards

In January 2013, the FASB issued Accounting Standards Update No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This ASU limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting agreement. The disclosure requirements were effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. This guidance did not have a material impact on United’s financial position or results of operations, and resulted in additional disclosures.

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The amendments in this update require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component and by the respective line items of net income. The standard was effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. This guidance did not have a material impact on United’s financial position or results of operations, and resulted in additional disclosures.

In July 2013, the FASB issued Accounting Standards Update No. 2013-10, Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes. The amendments in this update permit the Fed Funds Effective Swap Rate (OIS) to be used as a benchmark interest rate for hedge accounting in addition to UST and LIBOR. The amendments also remove the restriction on using different benchmark rates for similar hedges. The standard is effective prospectively for qualifying new or re-designated hedging relationships entered into on or after July 17, 2013. This guidance did not have a material impact on United’s financial position, results of operations or disclosures.

In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward exists. This ASU provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Since United has both unrecognized tax benefits and net operating loss and tax credit carryforwards, this ASU could have an impact on United’s financial position, results of operations or disclosures; however, United does not expect the impact to be material to United’s financial position, results of operations or disclosures.

Note 3 – Offsetting Assets and Liabilities

United enters into reverse repurchase agreements in order to invest short-term funds. In addition, United enters into repurchase agreements and reverse repurchase agreements with the same counterparty in transactions commonly referred to as collateral swaps that are subject to master netting agreements under which the balances are netted in the balance sheet.

United also enters into derivative transactions that are subject to master netting arrangements; however there were no offsetting positions with the same counterparty at September 30, 2013, December 31, 2012 or September 30, 2012.

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents a summary of amounts outstanding under master netting agreements as of September 30, 2013 and December 31, 2012, and September 30, 2012 (in thousands).

				Gross
	Gross			Amounts					Gross Amounts not Offset
	Amounts of			Offset on the					in the Balance Sheet
	Recognized			Balance			Net Asset		Financial		Collateral
September 30, 2013	Assets			Sheet			Balance		Instruments		Received		Net Amount

Repurchase agreements / reverse repurchase agreements	$	405,000		$	(350,000	)	$	55,000	$	-	$	-	$	55,000
Derivatives		8,092			-			8,092		-		-		8,092
Total	$	413,092		$	(350,000	)	$	63,092	$	-	$	-	$	63,092
Weighted average interest rate of reverse repurchase agreements		1.13	%

				Gross
	Gross			Amounts					Gross Amounts not Offset
	Amounts of			Offset on the			Net		in the Balance Sheet
	Recognized			Balance			Liability		Financial		Collateral
	Liabilities			Sheet			Balance		Instruments		Pledged		Net Amount

Repurchase agreements / reverse repurchase agreements	$	350,000		$	(350,000	)	$	-	$	-	$	-	$	-
Derivatives		37,269			-			37,269		-		25,579		11,690
Total	$	387,269		$	(350,000	)	$	37,269	$	-	$	25,579	$	11,690
Weighted average interest rate of repurchase agreements		.28	%

				Gross
	Gross			Amounts					Gross Amounts not Offset
	Amounts of			Offset on the					in the Balance Sheet
	Recognized			Balance			Net Asset		Financial		Collateral
December 31, 2012	Assets			Sheet			Balance		Instruments		Received		Net Amount

Repurchase agreements / reverse repurchase agreements	$	325,000		$	(265,000	)	$	60,000	$	-	$	-	$	60,000
Securities lending transactions		50,000			(50,000	)		-		-		-		-
Derivatives		658			-			658		-		-		658
Total	$	375,658		$	(315,000	)	$	60,658	$	-	$	-	$	60,658