Borrowings

9 Months Ended

Sep. 30, 2020

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.


	At September 30, 2020				At December 31, 2019
(Dollars in thousands)	Balance at End of Period		Weighted Average Interest Rate at End of Period		Balance at End of Period		Weighted Average Interest Rate at End of Period
Short-term borrowings:


Customer repurchase agreements	$	17,681	0.05	%	$	18,680	0.05	%


Long-term debt:
FHLB advances	$	200,000	1.44	%	$	140,000	2.04	%
Security repurchase agreements	5,010		0.57		10,098		2.07

Subordinated notes	$	193,413	4.90	%	$	94,818	5.32	%

The Corporation, through the Bank, has a credit facility with the Federal Home Loan Bank (the FHLB) with a maximum borrowing capacity of approximately $2.1 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 September 30, 2020 and December 31, 2019, the Bank had outstanding short-term letters of credit with the FHLB totaling $650.8 million and $535.6 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 available borrowing capacity from the FHLB totaled $1.2 billion at September 30, 2020.

The Corporation, through the Bank, holds collateral at the Federal Reserve Bank of Philadelphia (the FRB of Philadelphia) in order to access the Discount Window Lending program. The collateral, consisting of investment securities, was valued at $69.5 million and $94.8 million at September 30, 2020 and December 31, 2019, respectively. At September 30, 2020 and December 31, 2019, the Corporation had no outstanding borrowings under the Discount Window Lending program. As part of the CARES Act, the FRB of Philadelphia offered secured discounted borrowings to banks who originated Paycheck Protection Program (PPP) loans through the Paycheck Protection Program Liquidity Facility (PPPLF) program. At September 30, 2020, the Bank had no outstanding borrowings under the PPPLF program.

The Corporation has a $10.0 million committed line of credit with a correspondent bank. At September 30, 2020 and December 31, 2019, the Corporation had no outstanding borrowings under this line.

The Corporation and the Bank have a total of $2.2 billion and $1.9 billion of committed borrowing capacity at September 30, 2020 and December 31, 2019, respectively, of which $1.3 billion and $1.2 billion was available as of September 30, 2020 and December 31, 2019, respectively. The Corporation, through the Bank, also maintains uncommitted funding sources from correspondent banks of $460.0 million and $504.0 million at September 30, 2020 and December 31, 2019, respectively, which were fully available. Future availability under these lines is subject to the prerogatives of the granting banks and may be withdrawn at will.

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


(Dollars in thousands)	As of September 30, 2020		Weighted Average Rate
Remainder of 2020	$	10,000	1.47	%
2021	45,000		1.93
2022	35,000		1.17
2023	50,000		1.73
2024	60,000		0.98
Thereafter	—		—
Total	$	200,000	1.44	%

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


(Dollars in thousands)	As of September 30, 2020		Weighted Average Rate
Remainder of 2020	$	5,010	0.57	%
2021	—		—
2022	—		—
2023	—		—
2024	—		—
Thereafter	—		—
Total	$	5,010	0.57	%

Long-term debt under security repurchase agreements totaling $5.0 million hold variable interest rates and are based on the one-month LIBOR rate plus a spread.

On August 5, 2020, the Corporation issued $100.0 million aggregate principal amount of 5.00% fixed-to-floating rate subordinated notes (the "2020 Notes") due 2030. The net proceeds, which approximated $98.4 million, will be used for general corporate purposes. The subordinated notes qualify as Tier 2 capital for regulatory capital purposes, subject to applicable limitations.

The 2020 Notes bear interest at an annual rate of 5.00%, payable semi-annually in arrears commencing on February 15, 2021. The last interest payment date for the fixed rate period will be August 15, 2025. From and including August 15, 2025 to, but excluding, August 15, 2030 or the date of earlier redemption, the Notes will bear interest at an annual floating rate of interest equivalent to the expected Benchmark rate, which is expected to be the Three-Month Term SOFR, plus 495.2 basis points, payable quarterly in arrears, commencing on November 15, 2025. Notwithstanding the foregoing, if the Benchmark rate is less than zero, the Benchmark rate shall be deemed to be zero. The related issuance costs of $1.6 million are being amortized on a straight line basis into interest expense over 5 years.

The Corporation may redeem the 2020 Notes (i) in whole or in part beginning with the interest payment date of August 15, 2025, and on any interest payment date thereafter or (ii) in whole, but not in part, at any time within 90 days upon the

occurrence of certain tax, regulatory capital and Investment Company Act of 1940 events. The redemption price for any redemption is 100% of the principal amount of the subordinated notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption. Any redemption of the subordinated notes will be subject to the receipt of the approval of the Board of Governors of the Federal Reserve System to the extent then required under applicable laws or regulations, including capital regulations.