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Borrowed Funds
 6 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
Borrowed Funds
Note 7 – Borrowed Funds

The Bank is a member of the FHLB of Pittsburgh, Pennsylvania. As of June 30, 2021, the Bank's maximum borrowing capacity with the FHLB was $480.1 million and the remaining borrowing capacity was $468.8 million, with the difference being deposit letters of credit.

The Bank also maintains borrowing capacity with the Federal Reserve Bank under the discount window program, with the Federal Reserve Board under the Federal Reserve's Paycheck Protection Program Liquidity Facility (“PPPLF”) program in the amount of the outstanding pledged PPP loans, and with commercial banks for their excess reserves borrowed on an overnight basis as Federal Funds (“Fed Funds”) purchased. All borrowings under the PPPLF program have been repaid in full as of June 30, 2021.

Short-term borrowings

As of June 30, 2021, the Bank had borrowed $0.1 million under Fed Funds purchased. As of December 31, 2020, no amounts were outstanding.

The following table presents information related to short-term borrowings as of and for the periods indicated:
(Dollars in thousands)Six Months Ended June 30, 2021Year Ended December 31, 2020
Balance at end of period$100 $— 
Average balance during the period50,901 68,407 
Maximum month-end balance130,047 154,248 
Weighted-average rate during the period0.35 %0.58 %
Weighted-average rate at end of period0.33 %— %
Long-term borrowings

As of June 30, 2021 and December 31, 2020, the Bank had no long-term borrowings with the FHLB or the Federal Reserve.
Repurchase agreements

Along with traditional deposits, the Bank has access to securities sold under agreements to repurchase (“repurchase agreements”) with clients representing funds deposited by clients, on an overnight basis, that are collateralized by investment securities owned by the Company. Repurchase agreements with clients are included in the borrowings section on the consolidated balance sheets. All repurchase agreements are subject to terms and conditions of repurchase/security agreements between the Company and the client and are accounted for as secured borrowings. The Company’s repurchase agreements reflected in liabilities consist of client accounts and securities which are pledged on an individual security basis.

The Company monitors the fair value of the underlying securities on a monthly basis. Repurchase agreements are reflected in the amount of cash received in connection with the transaction. The primary risk with the Company’s repurchase agreements is the market risk associated with the investments securing the transactions, as we may be required to provide additional collateral based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.

All of the Company’s repurchase agreements were overnight agreements at June 30, 2021 and December 31, 2020. These borrowings were collateralized with investment securities with a carrying value of $11.8 million and $10.7 million at June 30, 2021 and December 31, 2020, respectively, and were comprised of United States government agency securities and United States sponsored mortgage-backed securities. Declines in the value of the collateral would require the Company to increase the amounts of securities pledged.

The following table presents information related to repurchase agreements as of and for the periods shown:
(Dollars in thousands)Six Months Ended June 30, 2021Year Ended December 31, 2020
Balance at end of period$11,361 $10,266 
Average balance during the period10,542 9,856 
Maximum month-end balance11,361 10,505 
Weighted-average rate during the period0.15 %0.23 %
Weighted-average rate at end of period0.12 %0.14 %

Subordinated debt

The following table presents information related to subordinated debt as of and for the periods shown:
(Dollars in thousands)Six Months Ended June 30, 2021Year Ended December 31, 2020
Balance at end of period$43,480 $43,407 
Average balance during the period43,444 7,568 
Maximum month-end balance43,480 43,524 
Weighted-average rate during the period4.44 %3.45 %
Weighted-average rate at end of period4.01 %4.02 %

In November 2020, the Company completed the private placement of $40 million fixed-to-floating rate subordinated notes to certain qualified institutional investors. These notes are unsecured and have a ten-year term, maturing December 1, 2030 and will bear interest at a fixed rate of 4.25%, payable semi-annually in arrears, for the first five years of the term. Thereafter, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be Three-Month Term SOFR, plus 401 basis points, payable quarterly in arrears. These notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The weighted-average rate during the period shown in the table above for the six months ended June 30, 2021 exceeds the coupon rate of the subordinated debt due to the impact of the amortization of the issuance costs to interest expense.

In March 2007, the Company completed the private placement of $4 million Floating Rate, Trust Preferred Securities through its MVB Financial Statutory Trust I subsidiary (the “Trust”). The Company established the Trust for the sole purpose of issuing the Trust Preferred Securities pursuant to an Amended and Restated Declaration of Trust. The proceeds from the sale of the Trust Preferred Securities will be loaned to the Company under subordinated Debentures (the “Debentures”) issued to the Trust pursuant to an Indenture. The Debentures are the only asset of the Trust. The Trust Preferred Securities have been issued to a pooling vehicle that will use the distributions on the Trust Preferred Securities to securitize note obligations. The securities issued by the Trust are includable for regulatory purposes as a component of the Company’s Tier 1 capital. The Trust Preferred
Securities and the Debentures mature in 2037 and have been redeemable by the Company since 2012. Interest payments are due in March, June, September and December and are adjusted at the interest due dates at a rate of 1.6% over the three-month LIBOR Rate. The obligations of the Company with respect to the issuance of the trust preferred securities constitute a full and unconditional guarantee by the Company of the Trust’s obligations with respect to the trust preferred securities to the extent set forth in the related guarantees.All subordinated debt matures in 2030.