Borrowings

12 Months Ended

Dec. 31, 2022

Borrowings:

The Company has access to various sources of funds that allow for management of interest rate exposure and liquidity. The following table summarizes the Company's outstanding borrowings and weighted average interest rates as of December 31, 2022 and 2021:


	Outstanding Balance				Weighted Average Interest Rate
	December 31,				December 31,
	2022		2021		2022		2021
Securities sold under agreements to repurchase and federal funds purchased	$	86,945	$	40,716	3.78	%	0.21	%
FHLB advances	175,000		—		4.44	%	—	%
Subordinated debt, net	126,101		129,544		5.31	%	4.24	%
Other borrowings	27,631		1,518		0.09	%	1.76	%
Total	$	415,677	$	171,778

Securities sold under agreements to repurchase and federal funds purchased

Securities sold under agreements to repurchase are financing arrangements that mature daily. Securities sold under agreements to repurchase totaled $21,945 and $40,716 as of December 31, 2022 and 2021, respectively. The weighted average interest rate of the Company's securities sold under agreements to repurchase was 0.18% and 0.21% as of December 31, 2022 and 2021, respectively. The fair value of securities pledged to secure repurchase agreements may decline. The Company manages this risk by having a policy to pledge securities valued at 100% of the outstanding balance of repurchase agreements.

The Bank maintains lines with certain correspondent banks that provide borrowing capacity in the form of federal funds purchased. Federal funds purchased are short-term borrowings that typically mature within one to ninety days. As of December 31, 2022 and 2021, the aggregate total borrowing capacity under these lines amounted to $350,000 and $325,000, respectively. As of December 31, 2022, borrowings against these lines (i.e. federal funds purchased) totaled $65,000 with a weighted average rate of 5.00%. There were no such borrowings as of December 31, 2021.

Information concerning securities sold under agreement to repurchase and federal funds purchased is summarized as follows:


	December 31, 2022			December 31, 2021
Balance at year end	$	86,945		$	40,716
Average daily balance during the year	28,497			36,453
Average interest rate during the year	0.23		%	0.27		%
Maximum month-end balance during the year	$	86,945		$	41,730
Weighted average interest rate at year-end	3.78		%	0.21		%

Federal Home Loan Bank Advances

As a member of the FHLB Cincinnati, the Bank may utilize advances from the FHLB in order to provide additional liquidity and funding. Under these short-term agreements, the Company maintains a line of credit that as of December 31, 2022 and 2021 had total borrowing capacity of $1,270,240 and $1,233,254, respectively. As of December 31, 2022 and 2021, the Company had qualifying loans pledged as collateral securing these lines amounting to $2,673,464 and $2,717,967, respectively. Overnight cash advances against this line totaled $175,000 as of December 31, 2022. There were no FHLB advances outstanding as of December 31, 2021.

Information concerning FHLB advances as of or for the year ended December 31, 2022 is summarized within the table below. There were no FHLB advances outstanding during the year ended December 31, 2021.


	December 31, 2022
Balance at year end	$	175,000
Average daily balance during the year	171,142
Average interest rate during the year	3.26		%
Maximum month-end balance during the year	$	540,000
Weighted average interest rate at year-end	4.44		%

Subordinated Debt

During the year-ended December 31, 2003, two separate trusts were formed by the Company, which issued $9,000 (“Trust I”) and $21,000 ("Trust II") of floating rate trust preferred securities as part of a pooled offering of such securities. The Company issued junior subordinated debentures of $9,280, which included proceeds of common securities purchased by the Company of $280, and junior subordinated debentures of $21,650, which included proceeds of common securities of $650. The Trusts were created for the sole purpose of issuing 30-year capital trust preferred securities to fund the purchase of junior subordinated debentures issued by the Company. Both issuances were to the trusts in exchange for the proceeds of the securities offerings, which represent the sole asset of the trusts.

Additionally, during the year ended December 31, 2020, the Company placed $100,000 of ten year fixed-to-floating rate subordinated notes, maturing September 1, 2030. During the year ended December 31, 2022, the Company began mitigating interest rate exposure associated with these notes through the use of fair value hedging instruments. See Note 17, "Derivatives" for additional details related to these instruments.

Further information related to the Company's subordinated debt as of December 31, 2022 is detailed below:

Name

Year Established

Maturity

Call Date

Total Debt Outstanding

Interest Rate

Coupon Structure

Subordinated Debt issued by Trust Preferred Securities

FBK Trust I (1)

2003

06/09/2033

6/09/2008(2)

9,280

8.00%

3-month LIBOR plus 3.25%

FBK Trust II (1)

2003

06/26/2033

6/26/2008(3)

21,650

7.87%

3-month LIBOR plus 3.15%

Additional Subordinated Debt

FBK Subordinated Debt I(4)

2020

09/01/2030

9/1/2025 (5)

100,000

4.50%

Semi-annual Fixed (6)

Unamortized debt issuance costs

(999)

Fair Value Hedge (See Note 17, "Derivatives" )

(3,830)

Total Subordinated Debt, net

126,101

(1)The Company classifies $30,000 of the Trusts' subordinated debt as Tier 1 capital.

(2)The Company may also redeem the first junior subordinated debenture listed, in whole or in part, on any distribution payment date within 120 days of

the occurrence of a special event, at the redemption price and must be redeemed no later than 2033.

(3)The Company may also redeem the second junior subordinated debentures listed, in whole or in part on any distribution payment date, at the

redemption price and must be redeemed no later than 2033.

(4)The Company classified the issuance, net of unamortized issuance costs and the associated fair value hedge as Tier 2 capital, which will be phased

out 20% per year in the final five years before maturity.

(5)The Company may redeem the notes in whole or in part on any interest payment date on or after September 1, 2025.

(6)Beginning on September 1, 2025 the coupon structure migrates to the 3-month Secured Overnight Financing Rate plus a spread of 439 basis points

through the end of the term of the debenture.

Other Borrowings

As of December 31, 2022 and 2021, other borrowings included a finance lease liability amounting to $1,420 and $1,518, respectively. Additionally, as of December 31, 2022, the Company had $26,211 of government guaranteed GNMA loans that were greater than 90 days delinquent under their contractual terms that were eligible for optional repurchase and recorded in both loans HFS and other borrowings.

See Note 9, "Leases" and Note 18, "Fair Value of financial instruments" for additional information regarding the Company's finance lease and guaranteed GNMA loans eligible for repurchase, respectively.