Borrowings

12 Months Ended

Dec. 31, 2021

Borrowings

Borrowings

Note 13: Borrowings

Borrowings were comprised of the following at December 31, 2021 and 2020:

	December 31,
	2021		2020
	(In thousands)
Federal Reserve discount window borrowings	$	160,000	$	50,000
Paycheck Protection Program Liquidity Facility		—		62,225
Short-term subordinated debt		17,000		14,960
FHLB advances		556,954		1,221,071
American Financial Exchange borrowing		300,000		—
Total borrowings	$	1,033,954	$	1,348,256

The Company began borrowing from the Federal Reserve discount window during the year ended December 31, 2020. This arrangement has a maximum borrowing limit of collateral pledged multiplied by an advance rate. Borrowing maturities can range from 24 hours to up to a term of 90 days. As of December 31, 2021 and 2020, the outstanding balance was $160.0 million and $50.0 million, respectively. This 24-hour advance was based on a fixed interest rate of 0.25% set by the Federal Reserve for Primary Credit institutions. These borrowings are secured by commercial, agricultural and construction loans totaling $3.0 billion.

During the year ended December 31, 2020, the Company began borrowing from the Paycheck Protection Program Liquidity Facility (“PPPLF”) established as a result of the CARES Act. This arrangement has a maximum borrowing limit of collateral pledged in the form of PPP loans and will be reduced as PPP loans are forgiven, per SBA guidelines. Borrowing terms require repayments that coincide with maturity dates or early payment of PPP loans as payments are made or loans are forgiven by the SBA. The Company did not have an outstanding PPPLF balance at December 31, 2021.

The Company entered into a warehouse financing arrangement in April 24, 2018, whereby a customer agreed to invest up to $30 million in the Company’s subordinated debt. The subordinated debt balance as of December 31, 2021 and 2020 was $17.0 million and $15.0 million, respectively. Interest on the debt is paid quarterly by the Company at a rate equal to one-month LIBOR, plus 300 basis points, plus additional interest equal to 50% of the earnings generated. The agreement is automatically renewed annually on April 30^th, unless either party notifies the other party at least 180 days prior to its renewable date, of its desire not to continue the relationship. As of December 31, 2021, neither party had made a notification of its intent to cancel this arrangement.

FHLB advances are secured by mortgage loans totaling $1.5 billion at both December 31, 2021 and 2020. In addition, available for sale securities and securities purchased under agreements to resell with a carrying value of $305.8 million and $261.4 million were pledged as of December 31, 2021 and 2020, respectively. At December 31, 2021 and 2020, the FHLB advances had interest rates ranging from 0.00% to 4.74%, and were subject to restrictions or penalties in the event of prepayment. FHLB advances include an advance in the amount of $400.0 million at December 31, 2021 that is subject to a put option. The put option can be exercised by the FHLB on a quarterly basis until November 2029. The next opportunity FHLB has to exercise the put option will be May 25, 2022. There was also an FHLB advance in the amount of $150.0 million at December 31, 2021 with an interest rate of 0.01% that was subject to a put option. The put option was able to be exercised by the FHLB on a quarterly basis beginning on October 28, 2021 and it was ultimately called in January of 2022 and replaced with a $150.0 million putable advance that has an interest rate of 0.12%. This put option can be exercised by the FHLB in July 2022 and then on a quarterly basis from July 2022 until October 2031.

The Company joined the American Financial Exchange (“AFX”) in January of 2021. During the year ended December 31, 2021, the Company utilized unsecured overnight lending arrangements to borrow from other AFX members through extensions of credit. At December 31, 2021, members of the AFX offered a combined borrowing limit of $350.0 million, but availability fluctuates daily. As of December 31, 2021, the outstanding balance was $300.0 million with rates between 0.11% to 0.20%. Rates are set daily by participating members and may vary by lending member.

Maturities of borrowings were as follows at December 31, 2021:

	Year Ended December 31, 2021
	Federal Reserve		Short-Term		FHLB		American Financial		Borrowings
	Discount Window		Subordinated Debt		Advances		Exchange Borrowing		Total
	(In thousands)
Due within one year	$	160,000	$	—	$	5,059	$	300,000	$	465,059
Due in one year to two years		—		17,000		342		—		17,342
Due in two years to three years		—		—		62		—		62
Due in three years to four years		—		—		59		—		59
Due in four years to five years		—		—		260		—		260
Thereafter		—		—		551,172		—		551,172
	$	160,000	$	17,000	$	556,954	$	300,000	$	1,033,954

At December 31, 2021, the Company had excess borrowing capacity of approximately $2.4 billion with the FHLB and the Federal Reserve discount window, based on available collateral.