Borrowings

12 Months Ended

Dec. 31, 2019

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)
2019
Short-term borrowings:
FHLB borrowings	$	—	—	%	$	190,740	$	23,485	2.57	%
Federal funds purchased	—		—		8,500		15,217		2.63
Customer repurchase agreements	18,680		0.05		22,995		18,180		0.05


Long-term debt:
FHLB advances	$	140,000	2.04	%	$	150,000	$	139,397	2.00	%
Security repurchase agreements	10,098		2.07		20,308		16,969		2.61

Subordinated notes	$	94,818	5.32	%	$	94,818	$	94,695	5.33	%

2018
Short-term borrowings:
FHLB borrowings	$	108,300	2.62	%	$	261,240	$	85,601	2.01	%
Federal funds purchased	60,000		2.60		65,003		36,591		1.88
Customer repurchase agreements	21,468		0.05		28,323		22,120		0.05


Long-term debt:
FHLB advances	$	125,000	1.92	%	$	125,031	$	120,983	1.80	%
Security repurchase agreements	20,330		2.71		30,751		29,049		2.08

Subordinated notes	$	94,574	5.33	%	$	94,574	$	94,451	5.34	%

The Corporation, through the Bank, has a credit facility with the FHLB with a maximum borrowing capacity of approximately $1.8 billion. All borrowings and letters of credit from the FHLB are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets. At December 31, 2019 and 2018, the Bank had outstanding short-term letters of credit with the FHLB totaling $535.6 million and $347.5 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 uncommitted federal fund credit lines with several correspondent banks that totaled $504.0 million and $367.0 million at December 31, 2019 and 2018, respectively. Future availability under these lines is subject to the prerogatives of the granting banks and may be withdrawn at will.

The Corporation, through the Bank, holds collateral at the Federal Reserve Bank of Philadelphia in order to access the Discount Window Lending program. The collateral consisting of investment securities was valued at $94.8 million and $69.5 million at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, the Corporation had no outstanding borrowings under this program.

The Corporation has a $10.0 million committed line of credit with a correspondent bank. At December 31, 2019 and 2018, the Corporation had no outstanding borrowings under this line.

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


(Dollars in thousands)	As of December 31, 2019		Weighted Average Rate
2020	$	40,000	1.70	%
2021	80,000		2.07
2022	10,000		2.09
2023	10,000		3.02
2024	—		—
Thereafter	—		—
Total	$	140,000	2.04	%

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


(Dollars in thousands)	As of December 31, 2019		Weighted Average Rate
2020	$	10,098	2.07	%
2021	—		—
2022	—		—
2023	—		—
2024	—		—
Thereafter	—		—
Total	$	10,098	2.07	%

Long-term debt under security repurchase agreements totaling $10.1 million hold variable interest rates and are based on the one-month LIBOR rate plus a spread.

Subordinated Debt

On July 1, 2016, the Corporation issued $45.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2026 (2016 Notes) 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 issued $50.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2025 (2015 Notes) in a private placement transaction to institutional accredited investors. The net proceeds of the offering $49.3 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 for the first five years of the notes' terms. The Tier 2 capital benefit is phased out at 20% per year after the fifth year (from years six to ten) and have no benefit in the tenth year.