Customer repurchase agreements are overnight customer sweep arrangements. Information concerning customer repurchase agreements is summarized as follows for the nine months ended September 30, 2020 and the year ended December 31, 2019:


(Dollars in thousands)	September 30, 2020			December 31, 2019
Amount outstanding at end of period	$	14,192		$	2,033
Weighted average interest rate at end of period	0.03		%	0.03		%
Average daily balance during the period	$	6,520		$	7,823
Weighted average interest rate during the period	0.03		%	0.02		%
Maximum month-end balance during the period	$	14,192		$	14,463

Customer repurchase agreements were secured by pledged securities with carrying amounts of $14,544,000 and $2,997,000 at September 30, 2020 and December 31, 2019, respectively.

FHLB advances are collateralized by assets, including a blanket pledge of certain loans. FHLB advances and weighted average interest rates at end of period by contractual maturity are summarized as follows:


	Fixed Rate						Variable Rate
(Dollars in thousands)	Balance Outstanding		Weighted Average Interest Rate		Balance Outstanding		Weighted Average Interest Rate
2020	$	405,000	0.13	%	$	—	—
2027	—		—		30,000		0.33	%
	$	405,000	0.13	%	30,000		0.33	%


(Dollars in thousands)	September 30, 2020			December 31, 2019
Amount outstanding at end of period	$	435,000		$	430,000
Weighted average interest rate at end of period	0.15		%	1.58		%
Average amount outstanding during the period	430,250			369,548
Weighted average interest rate during the period	0.61		%	2.32		%
Highest month end balance during the period	850,000			530,000


(Dollars in thousands)	September 30, 2020		December 31, 2019
Borrowing capacity	$	1,323,927	$	1,300,985
Borrowings outstanding	435,000		430,000
Unused borrowing capacity	$	888,927	$	870,985

The PPPLF is a lending facility offered by the Federal Reserve Banks to facilitate lending to small businesses under the Paycheck Protection Program. Borrowings under the PPPLF are secured by Paycheck Protection Program Loans (“PPP loans”) guaranteed by the Small Business Administration (“SBA”) and mature at the same time as the PPP Loan pledged to secure the extension of credit. The maturity dates of the borrowings will be accelerated if the underlying PPP Loan goes into default and Company sells the PPP Loan to the SBA to realize on the SBA guarantee or if the Company receives any loan forgiveness reimbursement from the SBA for the underlying PPP Loan.


(Dollars in thousands)	September 30, 2020
Amount outstanding at end of period	$	223,713
Weighted average interest rate at end of period	0.35		%
Average amount outstanding during the period	119,236
Weighted average interest rate during the period	0.35		%
Highest month end balance during the period	223,809

At September 30, 2020, the PPPLF borrowings are secured by PPP Loans totaling $223,713,000 and bear interest at a fixed rate of 0.35% annually. There were no borrowings under the PPPLF during the year ended December 31, 2019.

The Company had no federal funds purchased at September 30, 2020 or December 31, 2019. However, as of September 30, 2020, the Company had unsecured federal funds lines of credit with seven unaffiliated banks totaling $227,500,000.

During the nine months ended September 30, 2020, the Company entered into agreements with the Federal Reserve Bank of Dallas to borrow from its discount window. The Company had no Federal Reserve Bank discount window borrowings outstanding at September 30, 2020. At September 30, 2020, the Company had $467,256,000 of unused borrowing capacity from the Federal Reserve Bank discount window, to which the Company pledged loans with an outstanding balance of $636,992,000. The Company did not participate in the Federal Reserve Bank discount window program during the year ended December 31, 2019.

On September 30, 2016, the Company issued $50,000,000 of Fixed-to-Floating Rate Subordinated Notes due 2026 (the “2016 Notes”). The 2016 Notes initially bear interest at 6.50% per annum, payable semi-annually in arrears, to, but excluding, September 30, 2021, and, thereafter and to, but excluding, the maturity date or earlier redemption, interest shall be payable quarterly in arrears, at an annual floating rate equal to three-month LIBOR as determined for the applicable quarterly period, plus 5.345%. The Company may, at its option, beginning on September 30, 2021 and on any scheduled interest payment date thereafter, redeem the 2016 Notes, in whole or in part, at a redemption price equal to the outstanding principal amount of the 2016 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption.

On November 27, 2019, the Company issued $39,500,000 of Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2019 Notes”). The 2019 Notes initially bear interest at 4.875% per annum, payable semi-annually in arrears, to, but excluding, November 27, 2024, and, thereafter and to, but excluding, the maturity date or earlier redemption, interest shall be payable quarterly in arrears, at an annual floating rate equal to a benchmark rate, initially three-month LIBOR, as determined for the applicable quarterly period, plus 3.330%. The Company may, at its option, beginning on November 27, 2024 and on any scheduled interest payment date thereafter, redeem the 2019 Notes, in whole or in part, at a redemption price equal to the outstanding principal amount of the 2019 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption.

The 2016 Notes and the 2019 Notes are included on our consolidated balance sheet as liabilities; however, for regulatory purposes, the carrying value of these obligations is eligible for inclusion in Tier 2 regulatory capital.

Issuance costs related to the 2016 Notes and the 2019 Notes totaled $1,324,000 and $1,218,000, respectively, and have been netted against the subordinated notes liability on the consolidated balance sheets. The debt issuance costs are being amortized using the effective interest method over the life of the 2016 Notes and the 2019 Notes as a component of interest expense. The carrying value of the 2016 Notes and the 2019 Notes totaled $87,455,000 and $87,327,000 at September 30, 2020 and December 31, 2019, respectively.

The 2016 Notes and the 2019 Notes are subordinated in right of payment to the Company’s existing and future senior indebtedness and are structurally subordinated to the Company’s subsidiaries’ existing and future indebtedness and other obligations.


(Dollars in thousands)	Face Value		Carrying Value		Maturity Date	Interest Rate
National Bancshares Capital Trust II	$	15,464	$	13,187	September 2033	LIBOR + 3.00%
National Bancshares Capital Trust III	17,526		12,924		July 2036	LIBOR + 1.64%
ColoEast Capital Trust I	5,155		3,594		September 2035	LIBOR + 1.60%
ColoEast Capital Trust II	6,700		4,684		March 2037	LIBOR + 1.79%
Valley Bancorp Statutory Trust I	3,093		2,876		September 2032	LIBOR + 3.40%
Valley Bancorp Statutory Trust II	3,093		2,679		July 2034	LIBOR + 2.75%
	$	51,031	$	39,944

These debentures are unsecured obligations due to trusts that are unconsolidated subsidiaries. The debentures were issued in conjunction with the trusts’ issuances of obligated capital securities. The trusts used the proceeds from the issuances of their capital securities to buy floating rate junior subordinated deferrable interest debentures that bear the same interest rate and terms as the capital securities. These debentures are the trusts’ only assets and the interest payments from the debentures finance the distributions paid on the capital securities. These debentures rank junior and are subordinate in the right of payment to all other debt of the Company.

As part of the purchase accounting adjustments made with the National Bancshares, Inc. acquisition on October 15, 2013, the ColoEast acquisition on August 1, 2016, and the Valley acquisition on December 9, 2017, the Company adjusted the carrying value of the junior subordinated debentures to fair value as of the respective acquisition dates. The discount on the debentures will continue to be amortized through maturity and recognized as a component of interest expense.

The debentures may be called by the Company at par plus any accrued but unpaid interest. Interest on the debentures is calculated quarterly, based on a contractual rate equal to three-month LIBOR plus a weighted average spread of 2.24%. The distribution rate payable on the capital securities is cumulative and payable quarterly in arrears. The Company has the right to defer payments on interest on the debentures at any time by extending the interest payment period for a period not exceeding 20 consecutive quarters with respect to each deferral period, provided that no extension period may extend beyond the redemption or maturity date of the debentures.

The debentures are included on the consolidated balance sheet as liabilities; however, for regulatory purposes, the carrying value of these obligations are eligible for inclusion in Tier I regulatory capital, subject to certain limitations. All of the carrying value of $39,944,000 and $39,566,000 was allowed in the calculation of Tier I regulatory capital as of September 30, 2020 and December 31, 2019, respectively.