(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 bore interest at a fixed rate of 6.5% per year, to, but excluding, June 30, 2022. On June 30, 2022, the Notes were set to convert to a floating rate equal to three-month LIBOR plus 467 basis points. The Notes were redeemed by the Company on June 30, 2022.

(3) 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 is net of debt issuance costs.

(4) The Notes bear interest at a fixed rate of 5.50% per year, from, and including, August 20, 2020, to, but excluding, September 1, 2025. On September 1, 2025, the Notes convert to a floating rate equal to three-month LIBOR plus 536 basis points. The Notes may be redeemed by the Company on or after September 1, 2025. These notes were acquired in the ACBI acquisition on March 1, 2022 and are net of the fair value discount noted in the table above.

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, 2022 and 2021, there were no outstanding short-term borrowings. For the years ended December 31, 2022 and 2021, the average balance for short-term borrowings was $11.0 million and $2.0 million, respectively. The year-to-date weighted average cost for the years ended December 31, 2022 and 2021 was 5.22% and 2.22%, respectively. Net eligible loans of the Company pledged via a blanket lien to the FHLB for advances and letters of credit at December 31, 2022, were approximately $5.5 billion and investment securities and cash pledged were approximately $597.6 million. This allows the Company a total borrowing capacity at the FHLB of approximately $4.2 billion. After accounting for letters of credit totaling $2.1 million, the Company had unused net credit available with the FHLB in the amount of approximately $4.2 billion at December 31, 2022. The Company also has a total borrowing capacity at the FRB of $782.0 million at December 31, 2022 secured by a blanket lien on $1.3 billion in net eligible loans of the Company. The Company had no outstanding borrowings with the FRB at December 31, 2022.

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, 2022.

As of December 31, 2022, the sole assets of the trusts were an aggregate of $117.4 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, 2022, the Company had a $117.4 million liability for the junior subordinated debt securities, net of a $1.2 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, 2022, and 2021, there was $117.4 million (net of discount of $1.2 million) and $117.2 million (net of discount of $1.4 million), respectively, in junior subordinated debt. The weighted average cost of the junior subordinated debt at period end December 31, 2022 was 6.39% and the weighted average cost year-to-date for the year ended December 31, 2022 was 3.49%. 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 for the period ending December 31, 2022 would be 3.73%. 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 was 1.97%. If the discount were taken into account, the weighted average cost year-to-date would be 2.85% for the period ending December 31, 2021. During the second quarter of 2021, the Company redeemed $38.5 million in trust preferred securities that were assumed in the merger with CenterState. 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.

The Company’s trust preferred securities are included in Tier 2 capital for regulatory capital purposes.

Subordinated Debt and Notes

As of December 31, 2022, the Company had a $274.9 million liability for subordinated debt. The Company assumed $78.4 million of subordinated debentures from Atlantic Capital on March 1, 2022, which was partially offset by the redemption of $13.0 million in subordinated debentures in late June 2022.

The weighted average cost of the subordinated debt at period end December 31, 2022 was 5.68% and the weighted average cost year to date for the year ended December 31, 2022 was 5.70%. 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 was 5.81%. This does not take into account unamortized debt issuance costs and the unaccreted premium and the amortization of the debt issuance costs and the premium accretion recorded during the year. If the debt issuance costs and premium accretion were taken into account, the weighted average cost year to date for the year ended December 31, 2022 and 2021 would be 5.55% and 6.06%, respectively.

Qualifying subordinated debt can be included in Tier 2 capital for regulatory capital purposes. At December 31, 2022, all of the Company’s subordinated debentures totaling $275.0 million qualified for Tier 2 capital treatment. During the first quarter of 2022, the Company assumed $75.0 million in subordinated debentures with the ACBI acquisition and subsequently redeemed $13.0 million in subordinated debentures in June 2022. During the second quarter of 2021, the Company redeemed $25.0 million in subordinated debentures and repaid $11.0 million of matured subordinated notes. The $11.0 million of subordinated notes that matured in 2021 did not qualify for Tier 2 capital treatment.

Line of Credit

On November 14, 2022, 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 13, 2023, 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, 2022 and 2021, there was no outstanding balance associated with the line of credit. There were no amounts outstanding during 2022 for the U.S. Bank 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%.

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


	Junior
	Subordinated		Subordinated
(Dollars in thousands)	Debt		Debt		Total
Year Ended December 31,
2023	$	—	$	—	$	—
2024		—		—		—
2025		—		—		—
2026		—		—		—
2027		—		—		—
Thereafter		117,401		274,874		392,275
	$	117,401	$	274,874	$	392,275