Long-Term Borrowings and Subordinated Debt

12 Months Ended

Dec. 31, 2019

LONG-TERM BORROWINGS AND SUBORDINATED DEBT

Long-term borrowings are for original terms greater than one year and are comprised of FHLB advances, capital leases and junior subordinated debt securities. Our long-term borrowings at the Pittsburgh FHLB were $49.3 million as of December 31, 2019 and $69.8 million as of December 31, 2018. Long-term FHLB advances are secured by the same loans as short-term FHLB advances. Total loans pledged as collateral at the FHLB were $4.4 billion at December 31, 2019. We were eligible to borrow up to an additional $2.6 billion based on qualifying collateral, to a maximum borrowing capacity of $3.1 billion at December 31, 2019.

The following table represents the balance of long-term borrowings, the weighted average interest rate as of December 31 and interest expense for the years ended December 31:



(dollars in thousand)	2019			2018			2017
Long-term borrowings	$	50,868		$	70,314		$	47,301
Weighted average interest rate	2.60		%	2.84		%	1.88		%
Interest expense	$	1,831		$	1,129		$	463

Scheduled annual maturities and average interest rates for all of our long-term debt for each of the five years subsequent to December 31, 2019 and thereafter are as follows:



(dollars in thousands)	Balance		Average Rate
2020	$	27,058	2.91	%
2021	1,115		3.57	%
2022	7,592		2.24	%
2023	464		5.71	%
2024	13,381		1.71	%
Thereafter	1,258		5.83	%
Total	$	50,868	2.61	%

Junior Subordinated Debt Securities

The following table represents the composition of junior subordinated debt securities at December 31 and the interest expense for the years ended December 31:



	2019				2018				2017
(dollars in thousands)	Balance		Interest Expense		Balance		Interest Expense		Balance		Interest Expense
Junior subordinated debt	$	34,753	$	1,059	$	25,000	$	951	$	25,000	$	708
Junior subordinated debt—trust preferred securities	29,524		1,251		20,619		1,149		20,619		955
Total	$	64,277	$	2,310	$	45,619	$	2,100	$	45,619	$	1,663

The following table summarizes the key terms of our junior subordinated debt securities:



(dollars in thousands)	2001 Trust Preferred Securities	2005 Trust Preferred Securities	2015 Junior Subordinated Debt	2006 Junior Subordinated Debt	2008 Trust Preferred Securities
Junior Subordinated Debt	$—	$—	$9,750	$25,000	$—
Trust Preferred Securities	5,155	4,124	—	—	20,619
Stated Maturity Date	7/25/2031	5/23/2035	3/6/2025	12/15/2036	3/15/2038
Optional redemption date at par	Any time after 7/25/2011	Any time after 5/23/2010	Quarterly after 4/1/2020	Any time after 9/15/2011	Any time after 3/15/2013
Regulatory Capital	Tier 1	Tier 1	Tier 2	Tier 2	Tier 1
Interest Rate	6 Month LIBOR plus 375 bps	3 Month LIBOR plus 177 bps	fixed at 4.25% until 4/1/2020 then prime plus 100 bps	3 month LIBOR plus 160 bps	3 month LIBOR plus 350 bps
Interest Rate at December 31, 2019	6.00%	3.68%	4.25%	3.49%	5.39%

We have completed three private placements of trust preferred securities to financial institutions. As a result, we own 100 percent of the common equity of STBA Capital Trust I, DNB Capital Trust I and DNB Capital Trust II, or the Trusts. The Trusts were formed to issue mandatorily redeemable capital securities to third-party investors. The proceeds from the sale of the securities and the issuance of the common equity by the Trusts were invested in junior subordinated debt securities issued by us. The third party investors are considered the primary beneficiaries of the Trusts; therefore, the Trusts qualify as variable interest entities, but are not consolidated into our financial statements. The Trusts pays dividends on the securities at the same rate as the interest paid by us on the junior subordinated debt held by the Trusts. DNB Capital Trust I and DNB Capital Trust II were acquired with the DNB merger.