CFS Bancorp Inc. of Munster, Ind., said it has paid $42 million of prepayment penalties to restructure its Federal Home Loan Bank borrowings.
The $1.4 billion-asset company said it had yet to determine the impact the penalties would have on fourth-quarter earnings. CFS prepaid $400 million of fixed-rate advances with an average cost of 5.92%.
It has replaced the advances with $271 million of fixed-rate advances at 3.64%, and $54 million of short-term, variable-rate borrowings with a current cost of 2.29%, it said in a press release issued late Wednesday.
The company said it would have a $12.6 million pretax reduction in its interest expense over the next 12 months from the restructuring.
It also sold $459.6 million of securities, at a loss of $134,000, to help cover the prepayment penalties from the borrowings and to retire $75 million of debt.
