Short-term borrowings may consist of federal funds purchased, securities sold under repurchase agreements, and short-term FHLB advances with original maturities of one year or less.

The Company may use FHLB advances with original maturities of more than one year as an alternative to funding sources with similar maturities, such as certificates of deposit or other deposit programs. These advances generally offer more attractive rates than other mid-term financing options. They are also flexible, allowing the Company to quickly obtain the necessary maturities and rates that best suit its overall asset/liability strategy. FHLB advances with an original maturity of more than one year are classified as long-term. As of both December 31, 2023 and 2022, the Company did not have any long-term FHLB advances outstanding.

On October 1, 2021, the Company completed a private placement of $11.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes that will mature on October 1, 2031 (the “Notes”). The Notes bear interest at a rate of 3.50% per annum for the first five years; then the interest rate will be reset quarterly to a benchmark interest rate per annum which,

subject to certain conditions provided in the Notes, will be equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 275 basis points. The Company has used and expects to continue to use, the net proceeds for general corporate purposes, which may include the repurchase of the Company’s common stock, and to support organic growth plans, including the maintenance of capital ratios. Following receipt of the net proceeds of the Notes, the Company invested $5.0 million into capital surplus of the Bank. Net of unamortized debt issuance costs, the Notes were recorded as long-term borrowings totaling $10.8 million and $10.7 million, as of December 31, 2023 and 2022, respectively.


	2023			2022
	(Dollars in Thousands)
Balance at year-end	$	10,799		$	10,726
Average balance during the year	$	10,766		$	10,689
Maximum month-end balance during the year	$	10,799		$	10,726
Average rate paid during the year, including amortization of debt issuance costs		4.20	%		4.20	%
Weighted average remaining maturity (in years)		7.75			8.75

As an additional funding source, the Company has available unused lines of credit with correspondent banks, the Federal Reserve and the FHLB. Certain of these funding sources are subject to underlying collateral availability. As of December 31, 2023 and 2022, the Company’s available unused lines of credit consisted of the following:


Available Unused Lines of Credit	Collateral Requirements	December 31, 2023	December 31, 2022
Correspondent banks	None	$48.0 million	$45.0 million
FHLB advances (1)	Subject to collateral	$279.4 million	$246.8 million
FRB (2)	Subject to collateral	$161.7 million	$1.2 million

(1)

These amounts represent the total remaining credit the Company has from the FHLB, but this credit can only be utilized to the extent that underlying collateral exists. The total lendable collateral value of assets pledged (including loans and investment securities) associated with FHLB advances and letters of credit totaled $61.7 million and $68.2 million as of December 31, 2023 and 2022, respectively. The Company’s collateral exposure with the FHLB in the form of advances and letters of credit was $40.0 million and $50.0 million as of December 31, 2023 and 2022, respectively, leaving an excess of collateral of $21.7 million and $18.2 million available to utilize for additional credit as of the respective dates. The Company also has the ability to pledge additional assets to increase the availability of borrowings.

(2)

As of December 31, 2023, the Company had access to both the FRB's discount window and its Bank Term Funding Program (BTFP), the latter of which was established during the first quarter of 2023 in response to the liquidity events that occurred in the banking industry. Both the discount window and the BTFP allowed borrowing on pledged collateral that includes eligible investment securities and, in certain circumstances, eligible loans; however, advances under the BTFP could only be requested until March 11, 2024. In response to the heightened liquidity concerns in the banking industry, in 2023, the Company completed the establishment of additional borrowing capacity through the discount window, primarily via the pledging of the majority of the Company’s indirect loan portfolio as collateral. The discount window allows borrowing under 90-day terms The amounts shown in the table represent the Company's unused borrowing capacity as of the applicable date based on collateral pledged to the FRB's discount window. No collateral was pledged by the Company under the BTFP as of December 31, 2023.