Short and Long-Term Borrowings

6 Months Ended

Jun. 30, 2020

Short-Term Borrowings:

Short-term borrowings include any borrowing with an original maturity of one year or less. At both June 30, 2020 and December 31, 2019, the Company did not have any outstanding short-term borrowings.

Long-Term Borrowings:

The components of long-term borrowings (borrowing with an original maturity greater than one year) were as follows.


(in thousands)	June 30, 2020		December 31, 2019
PPP Liquidity Facility (“PPPLF”)	$	335,981	$	—
FHLB advances	39,030		25,061
Junior subordinated debentures	30,815		30,575
Subordinated notes	12,000		11,993
Total long-term borrowings	$	417,826	$	67,629

PPPLF: To support the effectiveness of the PPP loans, the Federal Reserve introduced the PPPLF to extend credit to financial institutions that made PPP loans, with the related PPP loans used as collateral on the borrowings. The PPPLF borrowings have a fixed interest rate of 0.35% and a maturity date equal to the maturity date of the related PPP loans, with the PPP loans maturing either two or five years from the origination date of the PPP loan. At June 30, 2020, the Company's PPP loans and related PPPLF funding had a weighted average life of approximately two years.

FHLB Advances: The FHLB advances bear fixed rates, require interest-only monthly payments, and have maturity dates through 2027. The weighted average rate of the FHLB advances was 0.93% at June 30, 2020 and 1.57% at December 31, 2019.

Junior Subordinated Debentures: The following table shows the breakdown of junior subordinated debentures. Interest on all debentures is current. Any applicable discounts (initially recorded to carry an acquired debenture at its then estimated fair value) are being accreted to interest expense over the remaining life of the debentures. All the debentures below are currently callable and may be redeemed in part or in full at par plus any accrued but unpaid interest. At June 30, 2020 and December 31, 2019, $29.7 million and $29.4 million, respectively, qualify as Tier 1 capital.


		Junior Subordinated Debentures
		June 30, 2020								December 31, 2019
(in thousands)	Maturity Date	Par		Unamortized Discount		Carrying Value		Carrying Value
2004 Nicolet Bankshares Statutory Trust ⁽¹⁾	7/15/2034	$	6,186	$	—	$	6,186	$	6,186
2005 Mid-Wisconsin Financial Services, Inc. ⁽²⁾	12/15/2035	10,310		(3,072)		7,238		7,138
2006 Baylake Corp. ⁽³⁾	9/30/2036	16,598		(3,765)		12,833		12,715
2004 First Menasha Bancshares, Inc. ⁽⁴⁾	3/17/2034	5,155		(597)		4,558		4,536
Total		$	38,249	$	(7,434)	$	30,815	$	30,575

(1)The interest rate is 8.00% fixed.

(2)The debentures, assumed in April 2013 as the result of an acquisition, have a floating rate of the three-month LIBOR plus 1.43%, adjusted quarterly. The interest rates were 1.74% and 3.32% as of June 30, 2020 and December 31, 2019, respectively.

(3)The debentures, assumed in April 2016 as a result of an acquisition, have a floating rate of the three-month LIBOR plus 1.35%, adjusted quarterly. The interest rates were 1.66% and 3.31% as of June 30, 2020 and December 31, 2019, respectively.

(4)The debentures, assumed in April 2017 as the result of an acquisition, have a floating rate of the three-month LIBOR plus 2.79%, adjusted quarterly. The interest rates were 3.09% and 4.69% as of June 30, 2020 and December 31, 2019, respectively.

Subordinated Notes: In first half 2015, the Company placed an aggregate of $12 million in subordinated Notes in private placements with certain accredited investors. All Notes were issued with 10-year maturities, have a fixed annual interest rate of 5% payable quarterly, and are callable on or after the fifth anniversary of their respective issuances dates. The subordinated Notes qualify for Tier 2 capital for regulatory purposes, and are discounted in accordance with regulations when the debt has five years or less remaining to maturity.