BORROWED FUNDS (Note 10)

Short-Term Borrowings

Short-term borrowings at December 31, 2015 and 2014 consisted of the following:



	2015		2014
	(in thousands)
Securities sold under agreements to repurchase	$	500,991	$	146,781
Federal funds purchased	50,000		—
FHLB advances	526,000		—
Total short-term borrowings	$	1,076,991	$	146,781

The weighted average interest rate for short-term borrowings was 0.69 percent and 0.28 percent at December 31, 2015 and 2014, respectively.

Long-Term Borrowings

Long-term borrowings at December 31, 2015 and 2014 consisted of the following:



	2015		2014
	(in thousands)
FHLB advances	$	1,272,591	$	1,832,166
Securities sold under agreements to repurchase	307,500		462,500
Subordinated debt, net *	230,573		229,944
Other	64		434
Total long-term borrowings	$	1,810,728	$	2,525,044



*	Subordinated debt is presented net of debt issuance costs totaling $2.2 million and $1.4 million at December 31, 2015 and 2014, respectively.

In the fourth quarter of 2015, Valley prepaid $625 million and $220 million of the long-term FHLB advances and securities sold under agreements to repurchase, respectively. These prepaid borrowings had contractual amounts of $795 million and $50 million maturing in 2017 and 2018, respectively, and had a combined weighted average interest rate of 3.72 percent. The debt extinguishment resulted in a loss, consisting of prepayment penalties, totaling approximately $51.1 million for the year ended December 31, 2015.

In December 2014, Valley prepaid $150 million and $125 million of the long-term FHLB advances and securities sold under agreements to repurchase, respectively. These borrowings had a combined weighted average interest rate of 4.52 percent and contractual maturity dates in November 2015. The debt extinguishment resulted in a loss, consisting of prepayment penalties, totaling approximately $10.1 million for the year ended December 31, 2014.

FHLB Advances. The long-term FHLB advances had a weighted average interest rate of 3.96 percent and 3.83 percent at December 31, 2015 and 2014, respectively. These FHLB advances are secured by pledges of certain eligible collateral, including but not limited to U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans. The pledged assets to the FHLB also collateralize a $350 million letter of credit issued by the FHLB on Valley’s behalf to secure certain public deposits held at the Bank. Interest expense recorded on FHLB advances totaled $67.2 million, $78.2 million, and $78.4 million for the years ended December 31, 2015, 2014 and 2013, respectively.

The long-term FHLB advances at December 31, 2015 are scheduled for repayment as follows:



Year	Amount
	(in thousands)
2016	$	184,636
2017	97,960
2018	354,995
Thereafter	635,000
Total long-term FHLB advances	$	1,272,591

Valley has no FHLB advances maturing in the years 2019 and 2020. The FHLB advances with scheduled repayments in years after 2016, reported in the table above, include $225 million in advances which are callable for early redemption by the FHLB during 2016 with interest rates ranging from 2.27 percent to 4.18 percent.

Long-term borrowings for securities sold under agreements to repurchase (long-term repos). The long-term repos had a weighted average interest rate of 3.35 percent and 3.97 percent at December 31, 2015 and 2014, respectively. Interest expense recorded on the long-term repos totaled $17.1 million, $24.2 million, and $24.3 million for the years ended December 31, 2015, 2014, and 2013, respectively.

The long-term repos at December 31, 2015 are scheduled for repayment as follows:



Year	Amount
	(in thousands)
2016	$	92,500
2017	65,000
2018	100,000
Thereafter	50,000
Total long-term securities sold under agreements to repurchase	$	307,500

Valley has no long-term repo maturing in the years 2019 and 2020.

Subordinated Debt. In June 2015, the Bank issued $100.0 million of 4.55 percent subordinated debentures (notes) due July 30, 2025 with no call dates or prepayments allowed unless certain conditions exist. This subordinated note issuance was intended to replace our $100 million of 5 percent subordinated notes which matured and were repaid in July 2015. Interest on the subordinated notes is payable semi-annually in arrears on June 30 and December 30 of each year.

In September 2013, Valley issued $125.0 million of its 5.125 percent subordinated notes due September 27, 2023 with no call dates or prepayments allowed, unless certain conditions exist. Interest on the subordinated debentures is payable semi-annually in arrears on March 27 and September 27 of each year. In conjunction with the issuance, Valley entered into an interest rate swap transaction used to hedge the change in the fair value of the subordinated notes (see Note 15 to the consolidated financial statements for further details on this derivative transaction). The hedged subordinated notes had a net carrying value of $130.6 million and $131.3 million at December 31, 2015 and 2014, respectively. Total interest expense on subordinated notes (including the changes in interest expense related to the interest rate swap) totaled $8.7 million, $8.5 million and $5.9 million at December 31, 2015, 2014 and 2013, respectively.

Pledged Securities. The fair value of securities pledged to secure public deposits, repurchase agreements, lines of credit, FHLB advances and for other purposes required by law approximated $1.4 billion and $1.3 billion at December 31, 2015 and 2014, respectively.