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Debt | 9 Months Ended
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Sep. 30, 2020
Debt Disclosure [Abstract] |
Debt |
(9) | Debt
Short-term FHLB and Correspondent Bank Borrowings Short-term borrowings generally consist of federal funds purchased and advances from the FHLB with an original maturity of less than a year. Federal funds purchased from correspondent banks mature in one business day and reprice daily based on the Federal Funds rate. Advances from the FHLB are collateralized by our investment in the common stock of the FHLB and by a blanket lien on selected loan receivables comprised principally of real estate secured loans within the Bank’s portfolio totaling $1,220,316,000 at September 30, 2020. The Bank had short-term borrowing capacity from the FHLB up to the Bank’s unused borrowing capacity of $471,029,000 (equal to $851,213,000 of maximum borrowing capacity less letter of credit and other FHLB advances outstanding) at September 30, 2020 upon satisfaction of any stock purchase requirements of the FHLB. No draws were outstanding on short-term FHLB or correspondent bank borrowings as of September 30, 2020 and December 31, 2019. The Bank also has unused overnight lines of credit with other correspondent banks amounting to $35,000,000 at September 30, 2020. No draws have been made on these lines of credit and on September 30, 2020 and December 31, 2019, the balance was zero. Short-term PPPLF Borrowings The entire balance of short-term borrowings of $203,842,000 at September 30, 2020 consisted of funding obtained from the Federal Reserve through the Paycheck Protection Program Liquidity Facility (“PPPLF”). The PPPLF allows banks to pledge PPP loans as collateral to borrow funds for up to a term of five years (to match the term of the respective PPP loans) at an interest rate of 0.35%. Draws of PPPLF funds must be repaid to the Federal Reserve immediately after the specific PPP loans collateralizing the related draws are repaid to the Bank. Mid Penn had no short-term PPPLF borrowings as of December 31, 2019. Long-term Debt As a member of the FHLB, the Bank can access a number of credit products which are utilized to provide liquidity. As of September 30, 2020, and December 31, 2019, the Bank had long-term debt outstanding in the amount of $75,199,000 and $32,903,000, respectively, consisting of FHLB fixed rate instruments, and a finance lease obligation executed during the first quarter of 2019. The FHLB fixed rate instruments are secured under the terms of a blanket collateral agreement with the FHLB consisting of FHLB stock and qualifying Mid Penn loan receivables, principally real estate secured loans. Mid Penn also obtains letters of credit from the FHLB to secure certain public fund deposits of municipality and school district customers who agree to use of the FHLB letters of credit. These FHLB letter of credit commitments totaled $306,551,000 as of September 30, 2020 and $169,051,000 as of December 31, 2019. The following table presents a summary of long-term debt as of September 30, 2020 and December 31, 2019.
(Dollars in thousands) |  | September 30, 2020 |  |  | December 31, 2019 |
FHLB fixed rate instruments: |  |  |  |  |  |  |  |
Due June 2020, 1.72% |  | $ | — |  |  | $ | 2,000 |
Due July 2020, 2.45% |  |  | — |  |  |  | 5,000 |
Due August 2020, 3.05% |  |  | — |  |  |  | 5,000 |
Due September 2020, 2.38% |  |  | — |  |  |  | 2,500 |
Due October 2020, 3.06% |  |  | — |  |  |  | 5,000 |
Due November 2020, 2.32% |  |  | — |  |  |  | 3,000 |
Due December 2020, 1.78% |  |  | — |  |  |  | 2,000 |
Due December 2020, 2.31% |  |  | — |  |  |  | 3,000 |
Due April 2022, 0.86% |  |  | 70,000 |  |  |  | — |
Due August 2026, 4.80% |  |  | 1,667 |  |  |  | 1,846 |
Due February 2027, 6.71% |  |  | 44 |  |  |  | 47 |
Less: fair value adjustments on debt assumed in acquisitions |  |  | — |  |  |  | (41 | )
Total FHLB fixed rate instruments |  |  | 71,711 |  |  |  | 29,352 |
Lease obligations included in long-term debt |  |  | 3,488 |  |  |  | 3,551 |
Total long-term debt |  | $ | 75,199 |  |  | $ | 32,903 |
As part of asset/liability and interest rate risk management strategies, Mid Penn prepaid $22,500,000 of FHLB fixed rate instruments originally due at various times in 2020, and recognized prepayment penalties of $26,000 for the three months ended September 30, 2020, and $165,000 for the nine months ended September 30, 2020. Prepayment penalties are included in other expenses on the Consolidated Statement of Income. No prepayment penalties were recognized during the three and nine months ended September 30, 2019. The amount of these prepayment penalties was more than offset by asset/liability management gains realized on sales of investment securities for the respective three-month and nine-month periods ended September 30, 2020.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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