Borrowings

Short-term borrowings on the Consolidated Balance Sheets include repurchase agreements utilized for corporate sweep accounts with cash management account agreements in place, overnight advances from the FHLB and a short-term line of credit. All repurchase agreements are subject to terms and conditions of repurchase/security agreements between the Bank and the client. The Bank is authorized to sell or repurchase U.S. Treasury, government agency and mortgage-backed securities to secure its liability to the client.

First Financial has a $15.0 million short-term credit facility with an unaffiliated bank that matures on May 29, 2017. This facility can have a variable or fixed interest rate and provides First Financial additional liquidity, if needed, for various corporate activities, including the repurchase of First Financial shares and the payment of dividends to shareholders. As of December 31, 2016 and December 31, 2015, there was no outstanding balance. The credit agreement requires First Financial to comply with certain covenants including those related to asset quality and capital levels, and First Financial was in compliance with all covenants associated with this line of credit as of December 31, 2016 and December 31, 2015.

The following is a summary of short-term borrowings for the last three years:



	2016				2015				2014
(Dollars in thousands)	Amount		Rate		Amount		Rate		Amount		Rate
At December 31,
Federal funds purchased and securities sold under agreements to repurchase	$	120,212	0.12	%	$	89,325	0.11	%	$	103,192	0.05	%
FHLB borrowings	687,700		0.66	%	849,100		0.47	%	558,200		0.18	%
Total	$	807,912	0.58	%	$	938,425	0.44	%	$	661,392	0.16	%

Average for the year
Federal funds purchased and securities sold under agreements to repurchase	$	89,157	0.05	%	$	73,191	0.07	%	$	119,795	0.05	%
FHLB borrowings	791,259		0.55	%	552,360		0.24	%	627,181		0.19	%
Other short-term borrowings	41		3.56	%	123		3.30	%	0		0.00	%
Total	$	880,457	0.50	%	$	625,674	0.22	%	$	746,976	0.17	%

Maximum month-end balances
Federal funds purchased and securities sold under agreements to repurchase	$	122,242			$	123,374			$	132,332
FHLB borrowings	1,035,000				849,100				820,500
Other short-term borrowings	0				15,000				0

In 2015, First Financial issued $120.0 million of subordinated notes, which have a fixed interest rate of 5.125% payable semiannually and mature on August 25, 2025. These notes are not redeemable by the Company or callable by the holders of the notes prior to maturity. The subordinated notes are treated as Tier 2 capital for regulatory capital purposes and are included in Long-term debt on the Consolidated Balance Sheets.

Long-term debt also includes FHLB long-term advances as of December 31, 2016 and 2015. These instruments are primarily utilized to reduce overnight liquidity risk and to mitigate interest rate sensitivity on the Consolidated Balance Sheets.

FHLB advances, both short-term and long-term, must be collateralized with qualifying assets, typically certain commercial and residential real estate loans, as well as certain government and agency securities. For ease of borrowing execution, First Financial utilizes a blanket collateral agreement with the FHLB, and at December 31, 2016, had collateral pledged with a book value of $3.5 billion.

The following is a summary of First Financial's long-term debt:



	2016					2015
(Dollars in thousands)	Amount			Average Rate		Amount			Average Rate
Subordinated debt	$	120,000		5.13	%	$	120,000		5.13	%
Unamortized debt issuance costs	(1,537		)	n/a		(1,688		)	n/a
FHLB	351			1.43	%	453			2.37	%
Capital loan with municipality	775			0.00	%	775			0.00	%
Total long-term debt	$	119,589		5.15	%	$	119,540		5.15	%

As of December 31, 2016, First Financial's long-term debt matures as follows:



(Dollars in thousands)	Long-term debt
2017	$	15
2018	15
2019	321
2020	0
2021	0
Thereafter	119,238
Total	$	119,589