Borrowings

The following is a summary of borrowings by type. Short-term borrowings consist of overnight borrowings and term borrowings with an original maturity of one year or less. The long-term debt balances and weighted average interest rates include purchase accounting fair value adjustments, net of related amortization from the Fox Chase acquisition.



	Balance at End of Year		Weighted Average Interest Rate		Maximum Amount Outstanding at Month End During the Year		Average Amount Outstanding During the Year		Weighted Average Interest Rate During the Year
(Dollars in thousands)
2016
Short-term borrowings:
FHLB borrowings	$	91,300	0.74	%	$	206,000	$	50,757	0.58	%
Federal funds purchased	80,000		0.81		125,000		24,783		0.61
Customer repurchase agreements	24,871		0.05		30,011		26,173		0.05
Other short-term borrowings*	—		—		79,960		1,525		18.83

Long-term debt:
FHLB advances	$	96,248	0.94	%	$	96,471	$	45,179	0.89	%
Security repurchase agreements	31,274		0.91		31,475		15,786		0.93

Subordinated notes	$	94,087	5.27	%	$	94,087	$	71,851	5.39	%

2015
Short-term borrowings:
FHLB borrowings	$	—	—	%	$	9,100	$	1,335	0.34	%
Federal funds purchased	—		—		39,150		3,877		0.38
Customer repurchase agreements	24,211		0.05		43,161		30,720		0.05

Subordinated notes	$	49,377	5.36	%	$	49,377	$	37,431	5.40	%

*Other short-term borrowings during 2016 consisted of a short-term bridge loan with a correspondent bank and associated fees.

The Corporation, through the Bank, has short-term and long-term credit facilities with the FHLB with a maximum borrowing capacity of approximately $1.2 billion. Advances from the FHLB are collateralized by a blanket floating lien on all first mortgage loans of the Bank, FHLB capital stock owned by the Bank and any funds on deposit with the FHLB. At December 31, 2016 and 2015, the Bank had outstanding short-term letters of credit with the FHLB totaling $148.5 million and $170.2 million, respectively, which were utilized to collateralize public funds deposits. The maximum borrowing capacity with the FHLB changes as a function of the Bank’s qualifying collateral assets as well as the FHLB’s internal credit rating of the Bank.

The Corporation, through the Bank, maintains federal fund credit lines with several correspondent banks totaling $302.0 million and $122.0 at December 31, 2016 and 2015, respectively. Future availability under these lines is subject to the prerogatives of the granting banks and may be withdrawn at will.

The Corporation has a $10.0 million line of credit with a correspondent bank. At December 31, 2016, the Corporation had no outstanding borrowings under this line.

The Corporation, through the Bank, has an available line of credit at the Federal Reserve Bank of Philadelphia, the amount of which is dependent upon the balance of loans and securities pledged as collateral. At December 31, 2016 and 2015, the Corporation had no outstanding borrowings from this line.

Long-term advances with the FHLB of Pittsburgh mature as follows:



(Dollars in thousands)	As of December 31, 2016		Weighted Average Rate
2017	$	66,149	0.83	%
2018	10,099		0.69
2019	10,000		1.35
2020	10,000		1.47
2021	—		—
Thereafter	—		—
Total	$	96,248	0.94	%

FHLB borrowings totaling $51.1 million have a "Call Date"; if the borrowing is called, the Corporation has the option to either pay off the borrowing without penalty or the fixed rate borrowing resets to a variable three-month LIBOR based rate. Subsequent to the call date, the borrowings are callable by the FHLB quarterly. Accordingly, the contractual maturities may differ from actual maturities.

Long-term debt under security repurchase agreements with large commercial banks mature as follows:



(Dollars in thousands)	As of December 31, 2016		Weighted Average Rate
2017	$	—	—	%
2018	10,404		0.76
2019	10,418		0.98
2020	10,452		0.99
2021	—		—
Thereafter	—		—
Total	$	31,274	0.91	%

Long-term debt under security repurchase agreements totaling $26.0 million are variable based on the one-month LIBOR rate plus a spread; one borrowing for $5.2 million has a fixed interest rate and may be called by the lender based on the underlying agreement.

Subordinated Debt

On July 1, 2016, the Corporation completed the issuance of $45.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "2016 Notes") due 2026 in a private placement transaction to institutional accredited investors. The net proceeds of the offering approximated $44.5 million. The 2016 Notes bear interest at an annual fixed rate of 5.00% from the date of issuance until June 30, 2021, or any early redemption date. From June 30, 2021 to the maturity date of June 30, 2026 (or any early redemption date), the 2016 Notes will bear interest at an annual rate equal to three-month LIBOR rate plus 3.90%. Beginning with the interest payment date of June 30, 2021, the Corporation has the option on each interest payment date, subject to approval of the Federal Reserve Board, to redeem the 2016 Notes in whole or in part at a redemption price equal to 100% of the principal amount of the redeemed 2016 Notes, plus accrued and unpaid interest to the date of the redemption. The Corporation may also redeem the 2016 Notes, in whole but not in part, at any time upon the occurrence of certain tax, regulatory capital and Investment Company Act of 1940 Act events, subject in each case to the approval of the Federal Reserve.

On March 30, 2015, the Corporation completed the issuance of $50.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "2015 Notes") due 2025 in a private placement transaction to institutional accredited investors. The net proceeds of the offering approximated $49 million, The 2015 Notes bear interest at an annual fixed rate of 5.10% from the date of issuance until March 30, 2020, or any early redemption date. From March 30, 2020 to the maturity date of March 30, 2025 (or any early redemption date), the 2015 Notes will bear interest at an annual rate equal to the three-month LIBOR rate plus 3.544%. Beginning with the interest payment date of March 30, 2020, the Corporation has the option on each interest payment date, subject to approval of the Federal Reserve Board, to redeem the 2015 Notes in whole or in part at a redemption price equal to 100% of the principal amount of the redeemed 2015 Notes, plus accrued and unpaid interest to the date of the redemption. The Corporation may also redeem the 2015 Notes, in whole, at any time, or in part from time to time upon the occurrence of certain tax, regulatory capital and Investment Company Act of 1940 Act events, subject in each case to the approval of the Federal Reserve.

The subordinated notes qualify as Tier 2 capital for regulatory capital purposes, subject to applicable limitations. The debt issuance costs are included as a direct deduction from the debt liability and the costs are amortized to interest expense using the effective interest method.

On April 25, 2016, Kroll Bond Rating Agency ("KBRA") affirmed its credit rating for the Corporation and the Bank with a stable outlook. Specifically, KBRA affirmed the Corporation's senior unsecured debt rating of BBB+, subordinated debt rating of BBB and short-term rating of K2. With regard to the Bank, KBRA affirmed the Bank's deposit rating of A-, short-term debt rating of K2 and short-term deposit rating of K2 while also assigning the Bank a senior unsecured debt rating of A-.