Borrowed Funds

12 Months Ended

Dec. 31, 2020

Borrowed funds included option advance borrowings from the FHLB of $7.2 million and $47.2 million at December 31, 2020 and 2019, respectively. The FHLB option advance borrowings are a mix of straight bullets, balloons and amortizers with contractual maturities through 2023. All of the FHLB borrowings had interest rates ranging from 0.00% to 3.09% at December 31, 2020 and 2019. The weighted average interest rates on the borrowings were 3.07% and 2.01% at December 31, 2020 and 2019, respectively.

The contractual payments due for FHLB option advance borrowings, as of December 31, 2020, were as follows:


	(Dollars in thousands)
2021	$	164
2022	—


2023	7,000
	$	7,164

The Company has established both overnight and longer term lines of credit with the FHLB. These borrowings are secured by a blanket lien on qualified collateral consisting of loans with first mortgages secured by one-to-four family properties and certain commercial real estate loans. At December 31, 2020, pledged loans with a carrying value of $210.0 million provided a borrowing capacity of $134.1 million at the FHLB, less outstanding borrowings and other credit subject to collateralization of $21.9 million, resulting in remaining year-end borrowing capacity of $112.2 million. At December 31, 2019, pledged loans with a carrying value of $207.7 million provided a borrowing capacity of $127.5 million at the FHLB, less outstanding borrowings and other credit subject to collateralization of $61.7 million, resulting in remaining year-end borrowing capacity of $65.8 million.

A separate agreement has been established with the FHLB under which the Company has the authority, up to its available borrowing capacity, to collateralize public unit deposits with letters of credit issued by the FHLB. FHLB letters of credit in the amount of $23.6 million and $24.8 million were utilized as collateral for these deposits at December 31, 2020 and 2019, respectively. Total fees paid by the Company in connection with the issuance of these letters of credit were $30 thousand and $27 thousand for the years ended December 31, 2020 and 2019, respectively.

In addition to its borrowing arrangements with the FHLB, Union maintains a preapproved Federal Funds line of credit with a correspondent bank totaling $15.0 million. Interest on advances under this line is payable daily and charged at the Federal Funds rate at the time of the borrowing. There were no outstanding borrowings on the Federal Funds purchase line at December 31, 2020 or 2019. In addition to the funding sources available to Union, the Company maintains a $5.0 million revolving line of credit with a correspondent bank. There were no outstanding borrowings on the line at December 31, 2020 or 2019.