Borrowings

12 Months Ended

Dec. 31, 2023

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, 2023 and 2022:


	Outstanding Balance				Weighted Average Interest Rate
	December 31,				December 31,
	2023		2022		2023		2022
Securities sold under agreements to repurchase and federal funds purchased	$	108,764	$	86,945	5.05	%	3.78	%
FHLB advances	—		175,000		—	%	4.44	%
Bank Term Funding Program	130,000		—		4.85	%	—	%
Subordinated debt, net	129,645		126,101		5.52	%	5.31	%
Other borrowings	22,555		27,631		0.10	%	0.09	%
Total	$	390,964	$	415,677

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 $19,328 and $21,945 as of December 31, 2023 and 2022, respectively. The weighted average interest rate of the Company's securities sold under agreements to repurchase was 1.60% and 0.18% as of December 31, 2023 and 2022, 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, 2023 and 2022, the aggregate total borrowing capacity under these lines amounted to $370,000 and $350,000, respectively. As of December 31, 2023 and 2022, borrowings against these lines (i.e., federal funds purchased) totaled $89,436 and $65,000 with a weighted average rate of 5.79% and 5.00%, respectively.

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


	December 31, 2023			December 31, 2022
Balance at year end	$	108,764		$	86,945
Average daily balance during the year	29,860			28,497
Average interest rate during the year	2.24		%	0.23		%
Maximum month-end balance during the year	$	116,220		$	86,945
Weighted average interest rate at year-end	5.05		%	3.78		%

Federal Home Loan Bank Advances

As a member of the FHLB, the Company 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, 2023 and 2022 had total borrowing capacity of $1,757,702 and $1,270,240, respectively. As of December 31, 2023 and 2022, the Company had qualifying loans pledged as collateral securing these lines amounting to $3,014,023 and $2,673,464, 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, 2023.

Information concerning FHLB advances as of or for the years ended December 31, 2023 and 2022 is summarized within the table below.


	December 31, 2023			December 31, 2022
Balance at year end	$	—		$	175,000
Average daily balance during the year	28,973			171,142
Average interest rate during the year	5.13		%	3.26		%
Maximum month-end balance during the year	$	125,000		$	540,000
Weighted average interest rate at year-end	—		%	4.44		%

Bank Term Funding Program

In March 2023, the Federal Reserve established the Bank Term Funding Program to make available funding to eligible depository institutions in order to help ensure they have the ability to meet the needs of their depositors following the March 2023 high-profile bank failures. The program allows for advances for up to one year secured by eligible high-quality securities at par value extended at the one-year overnight index swap rate, plus 10 basis points, as of the day the advance is made. The interest rate is fixed for the term of the advance and there are no prepayment penalties. At December 31, 2023, the Company had outstanding borrowings of $130,000 under the BTFP at a borrowing rate of 4.85% and a maturity date of December 26, 2024.

Information concerning the Bank Term Funding Program as of or for the year ended December 31, 2023 is summarized within the table below.


	December 31, 2023
Balance at year end	$	130,000
Average daily balance during the year	1,781
Average interest rate during the year	4.85		%
Maximum month-end balance during the year	$	130,000
Weighted average interest rate at year-end	4.85		%

Subordinated Debt

During the year ended December 31, 2003, two separate trusts were formed by the Company, which issued $9,000 and $21,000 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 15, "Derivatives" for additional details related to these instruments.

Further information related to the Company's subordinated debt as of December 31, 2023 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

9,280

8.84%

3-month SOFR plus 3.51%

FBK Trust II (1)

2003

06/26/2033

6/26/2008

21,650

8.77%

3-month SOFR plus 3.41%

Additional Subordinated Debt:

FBK Subordinated Debt I(2)

2020

09/01/2030

9/1/2025

100,000

4.50%

Semi-annual Fixed (3)

Unamortized debt issuance costs

(612)

Fair Value Hedge (See Note 15, “Derivatives”)

(673)

Total Subordinated Debt, net

129,645

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

(2)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.

(3)Beginning on September 1, 2025 the coupon structure migrates to the 3-month SOFR plus a spread of 439 basis points through the end of the term

of the debenture.

Other Borrowings

As of December 31, 2023 and 2022, other borrowings included a finance lease liability amounting to $1,326 and $1,420, respectively. Additionally, as of December 31, 2023 and 2022, the Company had $21,229 and $26,211, respectively, 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 7, “Leases” and Note 16, “Fair Value of financial instruments” for additional information regarding the Company's finance lease and guaranteed GNMA loans eligible for repurchase, respectively.