Borrowings

12 Months Ended

Dec. 31, 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.


	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)
2020
Short-term borrowings:
FHLB borrowings	$	—	—	%	$	—	$	5,048	1.68	%
Federal funds purchased	—		—		40,000		1,388		1.64
Customer repurchase agreements	17,906		0.05	%	39,615		20,747		0.05
Other short-term borrowings	—		—		192,936		59,475		0.35

Long-term debt:
FHLB advances	$	110,000	1.42	%	$	200,000	$	181,722	1.54	%


Subordinated notes	$	183,515	4.96	%	$	193,481	$	134,949	5.01	%

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	%

The Corporation, through the Bank, has a credit facility with the FHLB with a maximum borrowing capacity of approximately $2.2 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, 2020 and 2019, the Bank had outstanding short-term letters of credit with the FHLB totaling $669.7 million and $535.6 million, respectively, which were utilized to collateralize public fund deposits and other secured 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 $1.4 billion at December 31, 2020.

The Corporation, through the Bank, holds collateral at the Federal Reserve Bank of Philadelphia to provide access to the Discount Window Lending program. The collateral, consisting of investment securities, was valued at $40.7 million and $94.8 million at December 31, 2020 and 2019, respectively. At December 31, 2020 and 2019, the Corporation had no outstanding borrowings under the Discount Window Lending program.

The Corporation has a $10.0 million committed line of credit with a correspondent bank. At December 31, 2020 and 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 December 31, 2020 and 2019, respectively, of which $1.5 billion and $1.2 billion was available as of December 31, 2020 and 2019, respectively. The Corporation, through the Bank, also maintained uncommitted funding sources from correspondent banks of $460.0 million and $504.0 million at December 31, 2020 and 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 December 31, 2020		Weighted Average Rate
2021	$	15,000	1.93	%
2022	—		—
2023	35,000		1.94
2024	60,000		0.98
2025	—		—
Thereafter	—		—
Total	$	110,000	1.42	%

Subordinated Notes

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 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 (which approximates the level-yield method) into interest expense over five 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.

On July 1, 2016, the Corporation issued $45.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2026 (the "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 (the "2015 Notes") in a private placement transaction to institutional accredited investors. The net proceeds of the offering approximated $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. As of December 31, 2020, the Corporation opted to redeem $10.0 million of principal from the outstanding 2015 Notes.

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.