Borrowed Funds and Subordinated Debt

The Company's borrowed funds amounted to $84.2 million and $96.2 million at March 31, 2020 and December 31, 2019, respectively, in FHLB advances.

The contractual maturity distribution as of March 31, 2020 and December 31, 2019, of borrowed funds with the weighted average cost for each category is set forth below:



	March 31, 2020				December 31, 2019
(Dollars in thousands)	Balance		Rate		Balance		Rate
Overnight	$	5,000	0.37	%	$	92,000	1.85	%
Within 12 months	78,698		1.84	%	3,697		2.22	%
Over 5 years	471		—	%	476		—	%

The Company's borrowings at March 31, 2020 maturing within 12 months, consisted primarily of $75.0 million in three-month FHLB borrowings used in conjunction with 3 to 5 year pay fixed interest rate swaps. The remainder of FHLB advances maturing within 12 months, along with advances maturing in over five years, are related to specific lending projects under the FHLB's community development program. At December 31, 2019, borrowed funds, excluding overnight advances, related to the specific lending projects noted above.

The Company also had outstanding subordinated debt (net of deferred issuance costs) of $14.9 million at both March 31, 2020 and December 31, 2019, which consisted of $15.0 million in aggregate principal amount of Fixed-to-Floating Rate Subordinated Notes (the "Notes") issued in January 2015, with a 15-year term and currently callable by the Company at a premium. Original debt issuance costs were $190 thousand and have been netted against the subordinated debt on the consolidated balance sheet in accordance with accounting guidance. These costs are being amortized to interest expense over the life of the Notes.

The Notes are intended to qualify as Tier 2 capital for regulatory purposes and pay interest at a fixed rate of 6.00% per annum through January 30, 2025, after which floating rates apply. Refer to Note 8, "Borrowed Funds and Subordinated Debt," to the Company's audited consolidated financial statements contained in the Company's 2019 Annual Report on Form 10-K for additional information about the Company's subordinated debt.

See Note 2, "Investment Securities," and Note 3, "Loans," to the Company's unaudited consolidated interim financial statements of this Form 10-Q, contained above, for further information regarding securities and loans pledged for borrowed funds. Refer to the "Liquidity" and "Borrowed Funds" sections in the "Financial Condition" section in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operation," of this Form 10-Q for additional information about other sources of funding available to the Company and the Company's borrowing capacity.