BORROWINGS

9 Months Ended

Sep. 30, 2020

Following is a summary of short-term borrowings:

TABLE 10.1


(in millions)	September 30, 2020		December 31, 2019
Securities sold under repurchase agreements	$	405	$	278
Federal Home Loan Bank advances	1,380		2,255
Federal funds purchased	—		575
Subordinated notes	114		108
Total short-term borrowings	$	1,899	$	3,216

Borrowings with original maturities of one year or less are classified as short-term. Securities sold under repurchase agreements are comprised of customer repurchase agreements, which are sweep accounts with next-day maturities utilized by larger commercial customers to earn interest on their funds. Securities are pledged to these customers in an amount at least equal to the outstanding balance. We did not have any short-term FHLB advances with overnight maturities as of September 30, 2020 or December 31, 2019. At September 30, 2020, $1.4 billion, or 100.0%, of the short-term FHLB advances were swapped to a fixed rate with maturities ranging from 2020 through 2024. This compares to $1.5 billion, or 64.5%, as of December 31, 2019.

Following is a summary of long-term borrowings:

TABLE 10.2


(in millions)	September 30, 2020		December 31, 2019
Federal Home Loan Bank advances	$	700	$	935
Senior notes	298		—
Subordinated notes	84		90
Junior subordinated debt	66		66
Other subordinated debt	249		249
Total long-term borrowings	$	1,397	$	1,340

Our banking affiliate has available credit with the FHLB of $8.4 billion, of which $2.1 billion was utilized as of September 30, 2020. These advances are secured by loans collateralized by residential mortgages, home equity lines of credit, commercial real estate and FHLB stock and are scheduled to mature in various amounts periodically through the year 2022. Effective interest rates paid on the long-term advances ranged from 0.30% to 2.45% for the nine months ended September 30, 2020 and 1.62% to 2.71% for the year ended December 31, 2019.

During the third quarter of 2020, we reduced higher rate outstanding FHLB borrowings by $415.0 million, which resulted in a loss on debt extinguishment and related hedge termination costs of $13.3 million reported in other non-interest income on the Consolidated Statements of Income.

During the first quarter of 2020, we completed a debt offering in which we issued $300 million aggregate principal amount of senior notes due in 2023. The net proceeds of the debt offering after deducting underwriting discounts and commissions and offering costs were $297.9 million. These proceeds were used for general corporate purposes, which included investments at the holding company level, capital to support the growth of FNBPA, repurchase of our common shares and refinancing of outstanding indebtedness.

The following table provides information relating to our senior debt and other subordinated debt as of September 30, 2020. These debt issuances are fixed-rate, with the exception of the debt offering in 2019, which is fixed-to-floating rate after February 14, 2024. The subordinated notes are eligible for treatment as tier 2 capital for regulatory capital purposes.

TABLE 10.3


(dollars in millions)	Aggregate Principal Amount Issued		Net Proceeds (2)		Carrying Value		Stated Maturity Date	Interest Rate
2.20% Senior Notes due February 24, 2023	$	300	$	298	$	298	2/24/2023	2.20	%
4.95% Fixed-To-Floating Rate Subordinated Notes due 2029	120		118		119		2/14/2029	4.95	%
4.875% Subordinated Notes due 2025	100		98		99		10/2/2025	4.875	%
7.625% Subordinated Notes due August 12, 2023 (1)	38		46		31		8/12/2023	7.625	%
Total	$	558	$	560	$	547

(1) Assumed from a prior acquisition and adjusted to fair value at the time of acquisition.

(2) After deducting underwriting discounts and commissions and offering costs. For the debt assumed from a prior acquisition, this is the fair value of the debt at the time of the acquisition.

The junior subordinated debt is comprised of the debt securities issued by FNB in relation to our unconsolidated subsidiary trusts (collectively, the Trusts), which are unconsolidated VIEs, and are included on the Consolidated Balance Sheets in long-term borrowings. Since third-party investors are the primary beneficiaries, the Trusts are not consolidated in our Financial Statements. We record the distributions on the junior subordinated debt issued to the Trusts as interest expense.

The following table provides information relating to the Trusts as of September 30, 2020:

TABLE 10.4


(dollars in millions)	Trust Preferred Securities		Common Securities		Junior Subordinated Debt		Stated Maturity Date	Interest Rate		Rate Reset Factor
F.N.B. Statutory Trust II	$	22	$	1	$	22	6/15/2036	1.90	%	LIBOR + 165 basis points (bps)

Yadkin Valley Statutory Trust I	25		1		22		12/15/2037	1.57	%	LIBOR + 132 bps
FNB Financial Services Capital Trust I	25		1		22		9/30/2035	1.68	%	LIBOR + 146 bps


Total	$	72	$	3	$	66