(1) All of the junior subordinated debt above is adjustable rate based on three-month LIBOR plus a spread ranging from 140 basis points to 285 basis points.

(2) The Notes bear interest at a fixed rate of 6.0% per year, from, and including, May 19, 2016, to, but excluding, June 1, 2021. On June 1, 2021, the Notes convert to a floating rate equal to three-month LIBOR plus 479 basis points. The Notes were redeemed by the Company on June 1, 2021.

(3) The Notes bear interest at a fixed rate of 6.5% per year, to, but excluding, June 30, 2022. On June 30, 2022, the Notes convert to a floating rate equal to three-month LIBOR plus 467 basis points. The Notes may be redeemed by the Company after June 30, 2022.

(4) The $200 million in Notes bear interest at a fixed rate of 5.75% per year, to, but excluding, June 1, 2025. On June 1, 2025, the Notes convert to a floating rate equal to SOFR plus 562 basis points. The Notes may be redeemed by the Company after June 1, 2025. The balance in the table above at December 31, 2021 is net of debt issuance costs of $3.1 million.

(5) These subordinated notes were not classified as Tier 2 Capital for regulatory capital purposes.

Short-Term Borrowings

The Company has from time-to-time entered into borrowing agreements with the FHLB and FRB. Borrowings under these agreements are collateralized by stock in the FHLB, qualifying first and second mortgage residential loans, investment securities, and commercial real estate loans under a blanket-floating lien.

As of December 31, 2021 and 2020, there were no outstanding short-term borrowings. For the years ended December 31, 2021 and 2020, the average balance for short-term borrowings was $2.0 million and $745.9 million,

respectively. The year-to-date weighted average cost for the years ended December 31, 2021 and 2020 was 2.22% and 0.63%, respectively. Net eligible loans of the Company pledged via a blanket lien to the FHLB for advances and letters of credit at December 31, 2021, were approximately $3.7 billion and investment securities and cash pledged were approximately $227.6 million. This allows the Company a total borrowing capacity at the FHLB of approximately $2.8 billion. After accounting for letters of credit totaling $12.0 million, the Company had unused net credit available with the FHLB in the amount of approximately $2.8 billion at December 31, 2021. The Company also has a total borrowing capacity at the FRB of $981.1 million at December 31, 2021 secured by a blanket lien on $1.6 billion in net eligible loans of the Company. The Company had no outstanding borrowings with the FRB at December 31, 2021 and 2020.

During the fourth quarter of 2020, we paid-off early our FHLB advances of $700.0 million and terminated the interest rate swaps related to these advances at a cost of $38.8 million reflected in Noninterest Expense in the Consolidated Statements of Income.

Junior Subordinated Debt

The obligations of the Company with respect to the issuance of the capital securities constitute a full and unconditional guarantee by the Company of the trusts’ obligations with respect to the capital securities. Subject to certain exceptions and limitations, the Company may elect from time to time to defer interest payments on the junior subordinated debt securities, which would result in a deferral of distribution payments on the related capital securities.

All of the Company’s junior subordinated debt is callable after five years from issuance. Therefore, all of the junior subordinated debt is callable at December 31, 2021.

As of December 31, 2021, the sole assets of the trusts were an aggregate of $117.2 million, net of unamortized discount, of the Company’s junior subordinated debt securities with like maturities and like interest rates to the trust preferred securities.

As of December 31, 2021, the Company recorded a $117.2 million liability for the junior subordinated debt securities, net of a $1.4 million discount recorded on Citizens South Banking Corporation Statutory Trust I, Community Capital Statutory Trust I, FCRV Statutory Trust I and Provident Community Bancshares Capital Trust I and II. The Company, as issuer, can call any of these subordinated debt securities without penalty. If the Company were to call the securities, the amount paid to the holders would be $118.6 million and the Company would fully amortize any remaining discount into interest expense. The remaining discount is being amortized over a four-year period.

As of December 31, 2021, and 2020, there was $117.2 million (net of discount of $1.4 million) and $144.3 million (net of discount of $14.1 million), respectively, in junior subordinated debt. The weighted average cost of the junior subordinated debt at period end December 31, 2021 was 1.89% and the weighted average cost year to date for the year ended December 31, 2021 of 1.97%. This does not take into account the unamortized discount at period end or the discount amortization recorded during the year. If the discount were taken into account, the weighted average cost year to date would be 2.85%. This compares to a weighted average cost of the junior subordinated debt at period end December 31, 2020 of 2.05% and the weighted average cost year to date for the year ended December 31, 2020 of 2.51%. If the discount were taken into account, the weighted average cost year to date would be 3.56% in 2020. During the second quarter of 2021, the Company redeemed $38.5 million in trust preferred securities that were acquired in the merger with CSFL. With the redemption of the trust preferred securities, the remaining fair value mark on these borrowings of $11.7 million was written off as an extinguishment of debt cost.

Pursuant to the Basel III rules adopted by the bank regulatory agencies in July 2013, financial institutions with less than $15 billion in total assets may continue to include their trust preferred securities issued prior to May 19, 2010 in Tier 1 capital, but cannot include in Tier 1 capital any trust preferred securities issued after such date. A financial institution may continue to include its trust preferred securities in Tier 1 capital if it exceeds $15 billion in total assets through organic growth, but if it exceeds $15 billion in total assets through an acquisition or enters into an acquisition after exceeding $15 billion in total assets through organic growth, then the trust preferred securities would no longer be included in Tier 1 capital. Therefore, upon closing on the merger with CSFL in 2020, all of the Company’s trust preferred securities are no longer included in Tier 1 capital. Following the merger, these trust preferred securities are now included in Tier 2 capital for regulatory capital purposes.

Subordinated Debt and Notes

As of December 31, 2021, the Company recorded a $209.9 million liability for the subordinated debt, which was net of $3.1 million in debt issuance costs recorded on the CenterState subordinated debt issuance of $200.0 million. The remaining balance of the debt issuance costs are being amortized over a seven and one-half year period.

The weighted average cost of the subordinated debt at period end December 31, 2021 was 5.80% and the weighted average cost year to date for the year ended December 31, 2021 of 5.81%. The weighted average cost of the subordinated debt at period end December 31, 2020 was 5.78% and the weighted average cost year to date for the year ended December 31, 2020 of 5.69%. This does not take into account the amortization of the debt issuance costs. If the debt issuance costs were taken into account, the weighted average cost year to date for the year ended December 31, 2021 and 2020 would be 6.06% and 5.93%, respectively.

Qualifying subordinated debt can be included in Tier 2 capital for regulatory capital purposes. Of our subordinated debt, the amounts for the Landmark Bancshares and CenterState Bank Corporation totaling $213.0 million qualify for Tier 2 capital at December 31,2021. During the second quarter of 2021, the Company redeemed $25.0 million in subordinated debentures and repaid $11.0 million of subordinated notes that matured. The subordinated notes for Residential Warranty Corp. and Messiah College totaling $11.0 million that matured in 2021 did not qualify for Tier 2 capital purposes.

Line of Credit

On November 15, 2021, the Company entered into an amendment and restatement to its Credit Agreement (the “Agreement”) with U.S. Bank National Association (the “Lender”). The Agreement provides for a $100 million unsecured line of credit by the Lender to the Company. The maturity date of the Agreement is November 14, 2022, provided that the Agreement may be extended subject to the approval of the Lender. Borrowings by the Company under the Agreement will bear interest at a rate per annum equal to 1.40% plus monthly reset term SOFR Rate. As of December 31, 2021 and 2020, there was no outstanding balance associated with the line of credit. For the year ended December 31, 2021, the average balance for U.S. Bank line of credit was $2.0 million and year-to-date weighted average cost for the years ended December 31, 2021 was 2.22%. There was no outstanding balance on the U.S. Bank line of credit during 2020.

Principal maturities of other borrowings, net of unamortized discount or debt issuance costs, are summarized below:


	Junior
	Subordinated		FHLB		Subordinated
(Dollars in thousands)	Debt		Advances		Debt		Total
Year Ended December 31,
2022	$	—	$	—	$	—	$	—
2023		—		—		—		—
2024		—		—		—		—
2025		—		—		—		—
2026		—		—		—		—
Thereafter		117,165		—		209,901		327,066
	$	117,165	$	—	$	209,901	$	327,066