NOTE 10: Borrowings

The table below presents selected information on short-term borrowings:


	December 31,
(Dollars in thousands)	2019			2018
Balance outstanding at year end1	$	16,360		$	14,917
Maximum balance at any month end during the year	$	17,178		$	22,912
Average balance for the year	$	15,533		$	18,883
Weighted average rate for the year		1.05	%		1.12	%
Weighted average rate on borrowings at year end		0.82	%		0.71	%
Estimated fair value at year end	$	16,360		$	14,917

Consists of repurchase transactions with customers, which generally mature the day following the day sold and are secured by investment securities.

Long-term borrowings at December 31, 2019 consist of advances under a non-recourse revolving bank line of credit secured by loans at C&F Finance and advances from the FHLB, which are secured by a blanket floating lien on all qualifying closed-end and revolving, open-end loans secured by 1-4 family residential properties, including loans held for sale. The interest rate on the revolving bank line of credit, which matures in 2022, floats at the one-month LIBOR rate plus 200 basis points. The outstanding balance on this line was $75.03 million as of December 31, 2019. C&F Finance’s revolving bank line of credit agreement contains covenants regarding C&F Finance’s capital adequacy, collateral performance, adequacy of the allowance for loan losses and interest expense coverage. C&F Finance satisfied all such covenants during 2019. Long-term advances from the FHLB at December 31, 2019 consist of $37.00 million of convertible advances and $7.50 million of fixed rate hybrid advances. The convertible advances have fixed rates of interest unless the FHLB exercises its option to convert the interest on these advances from fixed rate to variable rate. The fixed rate hybrid advances provide fixed-rate funding until the stated maturity date. C&F Bank may add interest rate caps or floors at a future date, at which time the cost of the caps or floors will be added to the advance rate. The table below presents selected information for the FHLB advances at December 31, 2019:


						Next
						Conversion
(Dollars in thousands)			Interest Rate		Maturity Date	Option Date
Fixed Rate Hybrid Advances
	$	7,500	1.78	%	08/21/20

Convertible Advances
	$	7,500	1.48	%	09/19/22	09/20/21
	$	7,500	1.96	%	09/29/23	09/29/22
	$	5,000	2.32	%	10/25/24	10/25/23
	$	5,000	2.53	%	11/28/25	11/29/24
	$	5,000	2.83	%	12/29/26	12/29/25
	$	7,000	2.01	%	12/03/27	12/03/26

The contractual maturities of long-term borrowings at December 31, 2019 are as follows:


(Dollars in thousands)	Fixed Rate		Floating Rate		Total
2020	$	7,500	$	—	$	7,500
2021		—		—		—
2022		7,500		75,029		82,529
2023		7,500		—		7,500
2024		5,000		—		5,000
Thereafter		17,000		—		17,000
	$	44,500	$	75,029	$	119,529

The Corporation’s available sources of credit for future borrowings total approximately $368.07 million at December 31, 2019, which consists of $159.65 million available from the FHLB, $44.97 million on C&F Finance’s revolving bank line of credit, $18.45 million available from the FRB, $95.00 million under unsecured federal funds agreements with third party financial institutions and $50.00 million in repurchase lines of credit with third party financial institutions. Additional loans and securities are available that can be pledged as collateral for future borrowings from the FRB or the FHLB above the current lendable collateral value.

C&F Financial Statutory Trust I (Trust I), C&F Financial Statutory Trust II (Trust II) and Central Virginia Bankshares Statutory Trust I (CVBK Trust I) are wholly-owned non-operating subsidiaries of the Corporation, formed for the purpose of issuing trust preferred capital securities. Collectively, these trusts have issued $25.00 million of trust preferred capital securities to institutional investors through private placements and $775,000 in common equity that is held by the Corporation. Trust preferred capital securities of $5.00 million issued by CVBK Trust I, $10.00 million issued by Trust I, and $10.00 million issued by Trust II mature in 2033, 2035 and 2037, respectively, and are redeemable at the Corporation’s option. Each of the trusts is required to make quarterly distributions to the holders of the securities at a rate based on the three-month LIBOR plus a spread of between 1.57 percent and 3.15 percent. During 2019, 2018 and 2017, the Corporation used interest rate swaps in designated cash flow hedges of interest payments on the trust preferred capital securities to mitigate the effects of changes in interest rates. At December 31, 2019, the effect of the interest rate swaps was a fixed rate of interest on the securities issued by CVBK Trust I, Trust I and Trust II of 4.64 percent, 3.32 percent and 5.10 percent, respectively. The principal assets of CVBK Trust I, Trust I and Trust II are trust preferred capital notes of the Corporation of $5.16 million, $10.31 million and $10.31 million, respectively, which have like maturities and like interest rates to the trust preferred capital securities. The interest payments by the Corporation on the notes will be used by the trusts to pay the quarterly distributions on the trust preferred capital securities.

The trust preferred capital securities issued by CVBK Trust I were recorded at fair value at the Corporation’s acquisition of CVBK in 2013. The resulting fair value adjustment was a discount of $716,000, which is being amortized over 20 years on a straight-line basis, and the balance of which was $494,000 as of December 31, 2019.

Subject to certain exceptions and limitations, the Corporation 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.