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BORROWED FUNDS | 9 Months Ended
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Sep. 30, 2024
Debt Disclosure [Abstract] |
BORROWED FUNDS | BORROWED FUNDS Borrowed funds at September 30, 2024 and December 31, 2023 are summarized as follows:
|  | September 30, 2024 |  | December 31, 2023
|  |  |  | Weighted |  |  |  | Weighted
|  |  |  | Average |  |  |  | Average
(Dollars in thousands) |  | Principal |  | Rate |  | Principal |  | Rate
Short-term debt: |  |  |  |  |  |  |  |
Advances from the FHLB |  | $ | 353,500 |  |  | 5.73 | % |  | $ | 260,000 |  |  | 5.54 | %
Total short-term borrowings: |  | 353,500 |  |  | 5.73 |  |  | 260,000 |  |  | 5.54 |
Long-term debt: |  |  |  |  |  |  |  |
Advances from the FHLB and other borrowings |  | 232,042 |  |  | 4.09 |  |  | 125,223 |  |  | 4.80 |
Subordinated borrowings |  | 98,482 |  |  | 5.50 |  |  | 98,335 |  |  | 5.50 |
Junior subordinated borrowing - Trust I |  | 15,464 |  |  | 7.21 |  |  | 15,464 |  |  | 7.49 |
Junior subordinated borrowing - Trust II |  | 7,603 |  |  | 6.91 |  |  | 7,564 |  |  | 7.35 |
Total long-term borrowings: |  | 353,591 |  |  | 4.68 |  |  | 246,586 |  |  | 5.33 |
Total |  | $ | 707,091 |  |  | 5.20 | % |  | $ | 506,586 |  |  | 5.44 | %
Short-term debt includes Federal Home Loan Bank (“FHLB”) advances with an original maturity of less than one year. The Bank also maintains a $3.0 million secured line of credit with the FHLB that bears a daily adjustable rate calculated by the FHLB. There was no outstanding balance on the FHLB line of credit for the periods ended September 30, 2024 and December 31, 2023. The Bank's available borrowing capacity with the FHLB was $2.2 billion and $2.5 billion for the periods ended September 30, 2024 and December 31, 2023. The Bank is approved to borrow on a short-term basis from the Federal Reserve Bank of Boston as a non-member bank. The Bank has pledged certain loans and securities to the Federal Reserve Bank to support this arrangement. The Bank had no borrowings with the Federal Reserve Bank under this arrangement during the periods ended September 30, 2024 and December 31, 2023, respectively. The Bank's available borrowing capacity with the Federal Reserve Bank was $1.5 billion and $1.5 billion for the periods ended September 30, 2024 and December 31, 2023, respectively. Long-term FHLB advances consist of advances with an original maturity of more than one year and are subject to prepayment penalties. There were no callable advances outstanding at September 30, 2024. The advances outstanding at September 30, 2024 included amortizing advances totaling $6.1 million. There were no callable advances outstanding at December 31, 2023. The advances outstanding at December 31, 2023 included amortizing advances totaling $4.2 million. All FHLB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities. A summary of maturities of FHLB advances as of September 30, 2024 is as follows:
|  | September 30, 2024 |  |
|  |  |  | Weighted Average |  |  |  |
(In thousands, except rates) |  | Principal |  | Rate |  |  |  |
Fixed rate advances maturing: |  |  |  |  |  |  |  |
2024 |  | $ | 270,000 |  |  | 5.44 | % |  |  |  |
2025 |  | 258,500 |  |  | 5.08 |  |  |  |  |
2026 |  | 25,493 |  |  | 3.75 |  |  |  |  |
2027 |  | 25,150 |  |  | 3.65 |  |  |  |  |
2028 and beyond |  | 6,399 |  |  | 0.71 |  |  |  |  |
Total FHLB advances |  | $ | 585,542 |  |  | 5.08 | % |  |  |  |
The Company did not have variable-rate FHLB advances for the periods ended September 30, 2024 and December 31, 2023, respectively. In June 2022, the Company issued ten year subordinated notes in the amount of $100.0 million. The interest rate is fixed at 5.50% for the first five years. After five years, the notes become callable and will bear interest at a floating rate per annum equal to a benchmark rate (which is expected to be Three-Month Term SOFR), plus 249 basis points. The subordinated note includes reduction to the note principal balance of $1.5 million for unamortized debt issuance costs as of September 30, 2024. The Company holds 100% of the common stock of Berkshire Hills Capital Trust I (“Trust I”) which is included in other assets at a cost of $0.5 million. The sole asset of Trust I is $15.5 million of the Company’s junior subordinated debentures due in 2035. These debentures bear interest at a variable rate equal to 3-month CME Term SOFR plus 1.85% and had a rate of 7.21% and 7.49% at September 30, 2024 and December 31, 2023, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust I is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust I is not consolidated into the Company’s financial statements. The Company holds 100% of the common stock of SI Capital Trust II (“Trust II”) which is included in other assets at a cost of $0.2 million. The sole asset of Trust II is $8.2 million of the Company’s junior subordinated debentures due in 2036. These debentures bear interest at a variable rate equal to 3-month CME Term SOFR plus 1.70% and had a rate of 6.91% and 7.35% at September 30, 2024 and December 31, 2023, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust II is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust II is not consolidated into the Company’s financial statements.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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