Short-term borrowings may consist of federal funds purchased, securities sold under repurchase agreements, and short-term FHLB advances with original maturities of one year or less.

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Securities sold under repurchase agreements, which are secured borrowings, generally are reflected at the amount of cash received in connection with the transaction. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. The Bank monitors the fair value of the underlying securities on a daily basis. Securities sold under repurchase agreements as of December 31, 2021 and 2020 totaled $46 thousand and $17 thousand, respectively.

The Company may use FHLB advances with original maturities of more than one year as an alternative to funding sources with similar maturities, such as certificates of deposit or other deposit programs. These advances generally offer more attractive rates than other mid-term financing options. They are also flexible, allowing the Company to quickly obtain the necessary maturities and rates that best suit its overall asset/liability strategy. FHLB advances with an original maturity of more than one year are classified as long-term. As of both December 31, 2021 and 2020, the Company did not have any long-term FHLB advances outstanding.

On October 1, 2021, the Company completed a private placement of $11.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes that will mature on October 1, 2031 (the “Notes”). The Notes will bear interest at a rate of 3.50% per annum for the first five years; then the interest rate will be reset quarterly to a benchmark interest rate per annum which, subject to certain conditions provided in the Notes, will be equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 275 basis points. The Company has used and expects to continue to use the net proceeds for general corporate purposes, which may include the repurchase of the Company’s common stock, and to support organic growth plans, including the maintenance of capital ratios. Following receipt of the net proceeds of the Notes, the Company invested $5.0 million into capital surplus of the Bank. As of December 31, 2021, the Notes were recorded as long-term borrowings totaling $10.7 million, net of unamortized debt issuance costs. As of December 31, 2020, the Company did not have any subordinated notes outstanding.

	2021			2020
	(Dollars in Thousands)
Balance at year-end	$	10,653		$	—
Average balance during the year	$	2,682		$	—
Maximum month-end balance during the year	$	10,653		$	—
Average rate paid during the year, including amortization of debt issuance costs		4.20	%	N/A
Weighted average remaining maturity (in years)		9.75		N/A

As an additional funding source, the Company has available unused lines of credit with correspondent banks, the Federal Reserve and the FHLB. Certain of these funding sources are subject to underlying collateral. As of December 31, 2021 and 2020, the Company’s available unused lines of credit consisted of the following:

Available Unused Lines of Credit	Collateral Requirements	December 31, 2021	December 31, 2020
Correspondent banks	None	$45.0 million	$44.8 million
Federal Reserve (discount window)	Subject to collateral	$1.0 million	$1.6 million
FHLB advances ⁽¹⁾	Subject to collateral	$237.0 million	$225.8 million

(1)

These amounts represent the total remaining credit the Company has from the FHLB, but this credit can only be utilized to the extent that underlying collateral exists. Assets pledged (including loans and investment securities) associated with FHLB advances and letters of credit totaled $66.6 million and $36.1 million as of December 31, 2021 and 2020, respectively. The Company’s collateral exposure with the FHLB in the form of advances and letters of credit was $30.0 million and $20.0 million as of December 31, 2021 and 2020, respectively, leaving an excess of collateral of $26.6 million and $16.1 million available to utilize for additional credit as of the respective dates.