Long-Term Borrowings and Subordinated Debt

12 Months Ended

Dec. 31, 2022

LONG-TERM BORROWINGS AND SUBORDINATED DEBT

Long-term borrowings are for original terms greater than one year and are comprised of FHLB advances, finance leases and junior subordinated debt securities. Our long-term borrowings were $14.7 million as of December 31, 2022 and $22.4 million as of December 31, 2021. Long-term FHLB advances are secured by the same loans as short-term FHLB advances. Total loans pledged as collateral at the FHLB were $4.2 billion at December 31, 2022. We were eligible to borrow up to an additional $2.4 billion based on qualifying collateral and up to a maximum borrowing capacity of $2.9 billion at December 31, 2022.

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)	2022			2021			2020
Long-term borrowings	$	14,741		$	22,430		$	23,681
Weighted average interest rate	2.61		%	1.94		%	2.03		%
Interest expense	$	411		$	458		$	1,201

Scheduled annual maturities and average interest rates for all of our long-term debt for each of the five years subsequent to December 31, 2022 and thereafter are as follows:


(dollars in thousands)	Balance		Average Rate
2023	$	464	5.74	%
2024	13,380		2.27	%
2025	81		5.98	%
2026	87		6.00	%
2027	93		6.02	%
Thereafter	636		5.91	%
Total	$	14,741	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:


	2022				2021				2020
(dollars in thousands)	Balance		Interest Expense		Balance		Interest Expense		Balance		Interest Expense
Junior subordinated debt	$	25,000	$	850	$	25,000	$	756	$	34,750	$	1,007
Junior subordinated debt—trust preferred securities	29,453		1,545		29,393		1,087		29,333		1,279
Total	$	54,453	$	2,395	$	54,393	$	1,843	$	64,083	$	2,286

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

(dollars in thousands)

2001 Trust
Preferred Securities

2005 Trust
Preferred Securities

2006 Junior
Subordinated Debt

2008 Trust
Preferred Securities

Junior Subordinated Debt

$—

$25,000

$—

Trust Preferred Securities

5,155

4,124

—

20,619

Stated Maturity Date

7/25/2031

5/23/2035

12/15/2036

3/15/2038

Optional redemption date at par

Any time after 7/25/2011

Any time after 5/23/2010

Any time after 9/15/2011

Any time after 3/15/2013

Regulatory Capital

Tier 1

Tier 2

Tier 1

Interest Rate

6 Month LIBOR plus 375 bps

3 Month LIBOR plus 177 bps

3 month LIBOR plus 160 bps

3 month LIBOR plus 350 bps

Interest Rate at December 31, 2022

7.09%

6.46%

6.37%

8.27%

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 pay 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.