BORROWINGS

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

BORROWINGS

BORROWINGS

Subordinated Debt

On November 5, 2019, the Company completed an offering of $175.0 million aggregate principal amount Fixed to Floating Rate Subordinated Notes due in 2029. The notes bear a fixed interest rate of 4.25% per year through November 14, 2024. Beginning November 15, 2024, the interest rate will become a floating rate equal to three-month LIBOR, or an alternative benchmark rate as determined pursuant to the terms of the indenture for the notes in the event LIBOR has been discontinued by November 15, 2024, plus 262 basis points through the remaining maturity or early redemption date of the notes. The interest will be paid in arrears semi-annually during the fixed rate period and quarterly during the floating rate period. The Company incurred $2.9 million of debt issuance costs which are being amortized through the contractual life of the debt. The entire amount of subordinated debt is considered Tier 2 capital under current regulatory guidelines.

In conjunction with the acquisition of WashingtonFirst Bankshares, Inc. ("WashingtonFirst"), the Company assumed $25.0 million in subordinated debt with an associated purchase premium at acquisition of $2.2 million. The premium was amortized over the contractual life of the obligation. The subordinated debt had a maturity of 10 years, maturing on October 15, 2025, and was non-callable through October 15, 2020. The subordinated debt held a fixed interest rate of 6.00% per annum through October 5, 2020 at which point the rate became variable at the three-month LIBOR plus 457 basis points payable quarterly. On July 15, 2021, the Company redeemed the entire outstanding principal balance of the WashingtonFirst subordinated debt.

In conjunction with the acquisition of Revere, the Company assumed $31.0 million in subordinated debt with an associated purchase premium at acquisition of $0.2 million, which was amortized through the call date. The subordinated debt had a 10-year term, maturing on September 30, 2026, and was non-callable until September 30, 2021. The subordinated debt had a fixed interest rate of 5.625% per annum, payable semi-annually, through September 30, 2021 at which point the interest rate reset quarterly to an amount equal to three month LIBOR plus 441 basis points. On September 30, 2021, the Company redeemed the entire outstanding principal balance of the Revere subordinated debt.

The Company assumed $10.3 million in callable junior subordinated debt securities with an associated purchase premium at acquisition of $0.1 million in conjunction with the acquisition of WashingtonFirst. During the first quarter of 2020, the Company redeemed all $10.3 million of the outstanding principal balance of the callable junior subordinated debt securities.

The following table provides information on subordinated debentures for the period indicated:

(In thousands)	2021		2020
Fixed to floating rate sub debt, 4.25%	$	175,000	$	175,000
WashingtonFirst sub debt	—		25,000
Revere fixed to floating rate sub debt	—		31,000
Total subordinated debt	175,000		231,000
Less: Subordinated debt held as investments by Sandy Spring	—		(3,000)
Add: Purchase accounting premium	—		1,669
Less: Debt issuance costs	(2,288)		(2,581)
Net subordinated debt	172,712		227,088
Long-term borrowings	$	172,712	$	227,088

Other Borrowings

Information relating to retail repurchase agreements and federal funds purchased is presented in the following table at and for the years ending December 31:

	2021				2020
(Dollars in thousands)	Amount		Rate		Amount		Rate
End of period:
Retail repurchase agreements	$	141,086	0.12	%	$	153,157	0.11	%
Federal funds purchased	—		—		390,000		0.10
Average for the year:
Retail repurchase agreements	$	143,734	0.12	%	$	142,283	0.32	%
Federal funds purchased	15,154		0.08		367,240		0.41
Maximum month-end balance:
Retail repurchase agreements	$	154,413			$	153,157
Federal funds purchased	60,000				921,289

The Company pledges U.S. Agencies securities, based upon their market values, as collateral for greater than 102.5% of the principal of its retail repurchase agreements.

At December 31, 2021, the Company had an available line of credit with the FHLB under which its borrowings are limited to $3.9 billion based on pledged collateral at prevailing market interest rates, with no outstanding borrowings against it. At December 31, 2020, lines of credit totaled $3.0 billion based on pledged collateral with $379.1 million borrowed against the line. During the year ended December 31, 2021, the Company early repaid $279.0 million of FHLB advances, resulting in a prepayment penalty of $9.1 million, which was recorded in other non-interest expense in the Consolidated Statements of Income.

Under a blanket lien, the Company has pledged qualifying residential mortgage loans amounting to $829.1 million, commercial real estate loans amounting to $3.1 billion, home equity lines of credit (“HELOC”) amounting to $224.4 million and multifamily loans amounting to $333.4 million at December 31, 2021 as collateral under the borrowing agreement with the FHLB. At December 31, 2020, the Company had pledged collateral of qualifying mortgage loans of $1.0 billion, commercial real estate loans of $2.8 billion, HELOC loans of $226.2 million and multifamily loans of $237.6 million under the FHLB borrowing agreement.

The Company also had secured lines of credit available from the Federal Reserve and correspondent banks of $509.4 million and $276.2 million at December 31, 2021 and 2020, respectively, collateralized by loans, with no borrowings outstanding at the end of either period. In addition, the Company had unsecured lines of credit with correspondent banks of $1.3 billion and $1.1 billion at

December 31, 2021 and 2020. Of the unsecured lines of credit available there were no outstanding borrowings at December 31, 2021 and $390.0 million outstanding borrowings at December 31, 2020.

At December 31, 2021, the Company did not have any borrowings outstanding under the Paycheck Protection Program Liquidity Facility ("PPPLF").

Advances from the FHLB and the respective maturity schedule at December 31 for the years indicated consisted of the following:

	2021				2020
(Dollars in thousands)	Amounts		Weighted Average Rate		Amounts		Weighted Average Rate
Maturity:
One year	$	—	—	%	$	230,243	2.39	%
Two years	—		—		76,332		2.37
Three years	—		—		72,500		3.12
Four years	—		—		—		—
Five years	—		—		—		—
After five years	—		—		—		—
Total advances from FHLB	$	—	—		$	379,075	2.52