Borrowed Funds and Subordinated Debt

6 Months Ended

Jun. 30, 2020

The Company's borrowed funds amounted to $4.2 million and $96.2 million at June 30, 2020 and December 31, 2019, respectively, in FHLB advances.

Borrowed funds at June 30, 2020 and December 31, 2019 are summarized, as follows:



	June 30, 2020				December 31, 2019
(Dollars in thousands)	Balance		Rate		Balance		Rate
Overnight	$	—	—	%	$	92,000	1.85	%
Within 12 months	3,697		2.22	%	3,697		2.22	%
Over 5 years	468		—	%	476		—	%

The Company's borrowings at June 30, 2020 are related to specific lending projects under the FHLB's community development program. At December 31, 2019, borrowed funds, excluding overnight advances, also 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 June 30, 2020 and December 31, 2019, which consisted of $15.0 million in aggregate principal amount of Fixed-to-Floating Rate Subordinated Notes (the "2015 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 2015 Notes.

The 2015 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 1, "Summary of Significant Accounting Policies," item (d), "Subsequent Events," of this Form 10-Q, contained above, for information regarding additional subordinated debt issued on July 7, 2020.

See Note 2, "Investment Securities," and Note 3, "Loans," 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.