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FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable

FHLB Advances, Other Borrowings and Junior Subordinated Notes

The composition of borrowed funds is shown below. Average balances represent year to date averages.

						September 30, 2020																														December 31, 2019
						Balance						Weighted Average Balance						Weighted Average Rate						Balance						Weighted Average Balance						Weighted Average Rate
						(Dollars in Thousands)
Federal funds purchased						$	—					$	95					0.69		%				$	—					$	59					2.45		%
Federal Reserve PPPLF						29,605						16,855						0.35						—						—						—
FHLB advances						429,500						371,738						1.51						295,000						286,464						2.17
Other borrowings						675						675						8.12						675						675						8.11
Subordinated notes payable(1)						23,737						23,720						5.95						23,707						24,502						7.45
Junior subordinated notes						10,058						10,052						11.08						10,047						10,040						11.08
						$	493,575					$	423,135					1.95						$	329,429					$	321,740					2.87
Short-term borrowings						$	231,000																	$	118,500
Long-term borrowings						262,575																		210,929
						$	493,575																	$	329,429

(1)Weighted average rate of subordinated notes payable reflects the accelerated amortization of subordinated debt issuance costs as a result of the early redemption of a subordinated note during the third quarter of 2019.

During the nine months ended September 30, 2020, the Corporation prepaid $59.5 million of short-term FHLB advances that had a weighted average interest rate of 2.34%. The transaction was accounted for as an early debt extinguishment resulting in a pre-tax loss of $744,000 during the nine months ended September 30, 2020.

During the second quarter of 2020, the Corporation tested its ability to borrow from the Federal Reserve Paycheck Protection Program Liquidity Facility (“PPPLF”) in the event funding was required to support the Banks PPP lending efforts. On April 28, 2020, the Corporation borrowed $29.6 million from the PPPLF at a rate of 0.35%. The borrowing is fully collateralized by a tranche of PPP loans originated by the Bank on April 15, 2020 and matures on April 15, 2022, or when the tranche of PPP loans utilized to collateralize the PPPLF borrowing are forgiven, whichever comes first.

As of September 30, 2020 and December 31, 2019, the Corporation was in compliance with its debt covenants under its third-party secured senior line of credit. Per the promissory note dated February 19, 2020, the Corporation pays a fee on this line of credit. During both the nine months ended September 30, 2020 and 2019, the Corporation incurred interest expense of $10,000 due to this fee.

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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

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