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Borrowings

12 Months Ended

Dec. 31, 2020

Note 9. Borrowings

Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction. The underlying securities are held by the Company’s safekeeping agent. The Company may be required to provide additional collateral based on fluctuations in the fair value of the underlying securities. Securities sold under agreements to repurchase were $175.6 million at December 31, 2020, with a weighted average rate of 0.13%, compared to $205.5 million with a weighted average rate of 1.05% at December 31, 2019.

Federal funds purchased are short-term borrowings that generally mature between one and 90 days. The Company had no federal funds purchased at December 31, 2020 and 2019.

Short-term borrowings include $4.7 million of FHLB advances at December 31, 2020, which mature in less than one year from date of origination. At December 31, 2019, short term borrowings included $2.6 million of FHLB advances and $6.0 million of debt due within 12 months.

On January 29, 2019, the Company entered into an Amended and Restated Credit Agreement providing for a $60.0 million Term Loan with a maturity date of November 30, 2023. The Term Loan has an annual interest rate of one-month LIBOR plus a spread of 1.50%. Proceeds of the Term Loan were used to fund the cash consideration related to the acquisition of Banc Ed. The Company, at its option, repaid the balance of the Term Loan during the first quarter of 2020.

The Amended and Restated Credit Agreement retained the Company’s $20.0 million revolving credit facility with a maturity date of April 30, 2019. On April 19, 2019, the Company entered into an amendment to the Amended and Restated Credit Agreement to extend the maturity of its revolving credit facility to April 30, 2020. On April 24, 2020, the revolving credit facility maturity was again extended by amendment one year, to April 30, 2021, with an annual interest rate of one-month LIBOR plus a spread of 1.75%. The revolving credit facility incurs a non-usage fee based on the undrawn amount. The Company had no outstanding balance under the revolving facility on December 31, 2020 or 2019.

Long-term debt is summarized as follows (dollars in thousands):


		As of December 31,
		2020			2019
Notes payable, FHLB, original maturity of 5 years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock		$	4,757		$	35,600
Term Loan			—			48,000
Total long-term debt		$	4,757		$	83,600

As of December 31, 2020, funds borrowed from the FHLB, listed above, consisted of a variable-rate note maturing May 2023, with an interest rate of 3.04%. As of December 31, 2019, funds borrowed from the FHLB, listed above, consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 1.25% to 3.04%. The weighted average rate on these long-term advances was 1.53% as of December 31, 2019.

On May 25, 2017, the Company issued $40.0 million of 3.75% senior notes that mature on May 25, 2022. The senior notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017. The senior notes are not subject to optional redemption by the Company. Additionally, on May 25, 2017, the Company issued $60.0 million of fixed-to-floating rate subordinated notes that mature on May 25, 2027. The subordinated notes, which qualify as Tier 2 capital for First Busey, bear interest at an annual rate of 4.75% for the first five years after issuance and thereafter bear interest at a floating rate equal to three-month LIBOR plus a spread of 2.919%, as calculated on each applicable determination date. The subordinated notes are payable semi-annually on each May 25 and November 25,

commencing on November 25, 2017, during the five-year fixed term and thereafter on February 25, May 25, August 25, and November 25 of each year, commencing on August 25, 2022. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after May 25, 2022. The senior notes and subordinated notes are unsecured obligations of the Company.

On June 1, 2020, the Company issued $125.0 million of fixed-to-floating rate subordinated notes that mature on June 1, 2030. The subordinated notes, which qualify as Tier 2 capital for First Busey, bear interest at an annual rate of 5.25% for the first five years after issuance and thereafter bear interest at a floating rate equal to a three-month benchmark rate plus a spread of 5.11%, as calculated on each applicable determination date. The subordinated notes are payable semi-annually on each June 1 and December 1, during the five-year fixed-term, and thereafter on March 1, June 1, September 1, and December 1 of each year, commencing on September 1, 2025. The subordinated notes have an optional redemption, in whole or in part, on any interest payment date on or after June 1, 2025. The subordinated notes are unsecured obligations of the Company.

Unamortized debt issuance costs related to senior notes and subordinated notes are presented in the following table (dollars in thousands):


		As of December 31,
		2020			2019
Unamortized debt issuance costs related to:
Senior notes issued in 2017		$	191		$	326
Subordinated notes issued in 2017			651			752
Subordinated notes issued in 2020			2,123			—
Total unamortized debt issuance costs		$	2,965		$	1,078