BORROWED FUNDS

9 Months Ended

Sep. 30, 2020

NOTE 8 - BORROWED FUNDS

Short-term borrowed funds

Short-term borrowed funds were $252 million and $274 million as of September 30, 2020 and December 31, 2019, respectively.

Long-term borrowed funds

The following table presents a summary of the Company’s long-term borrowed funds:



(in millions)	September 30, 2020		December 31, 2019
Parent Company:
2.375% fixed-rate senior unsecured debt, due July 2021		$350		$349
4.150% fixed-rate subordinated debt, due September 2022 ⁽¹⁾	181		348
3.750% fixed-rate subordinated debt, due July 2024 ⁽¹⁾	159		250
4.023% fixed-rate subordinated debt, due October 2024 ⁽¹⁾	25		42
4.350% fixed-rate subordinated debt, due August 2025 ⁽¹⁾	193		249
4.300% fixed-rate subordinated debt, due December 2025⁽¹⁾	450		750
2.850% fixed-rate senior unsecured notes, due July 2026	497		496
2.500% fixed-rate senior unsecured notes, due February 2030	297		—
3.250% fixed-rate senior unsecured notes, due April 2030	745		—
2.638% fixed-rate subordinated debt, due September 2032 ⁽¹⁾	542		—
CBNA’s Global Note Program:
2.250% senior unsecured notes, due March 2020	—		700
2.678% floating-rate senior unsecured notes, due March 2020 ⁽²⁾	—		300
2.217% floating-rate senior unsecured notes, due May 2020 ⁽²⁾	—		250
2.200% senior unsecured notes, due May 2020	—		500
2.250% senior unsecured notes, due October 2020	750		750
2.550% senior unsecured notes, due May 2021	1,005		991
3.250% senior unsecured notes, due February 2022	720		711
0.985% floating-rate senior unsecured notes, due February 2022 ⁽²⁾	299		299
1.044% floating-rate senior unsecured notes, due May 2022 ⁽²⁾	250		250
2.650% senior unsecured notes, due May 2022	512		501
3.700% senior unsecured notes, due March 2023	530		515
1.168% floating-rate senior unsecured notes, due March 2023 ⁽²⁾	249		249
2.250% senior unsecured notes, due April 2025	745		—
3.750% senior unsecured notes, due February 2026	555		521
Additional Borrowings by CBNA and Other Subsidiaries:
Federal Home Loan Bank advances, 0.943% weighted average rate, due through 2038	19		5,008
Other	36		18
Total long-term borrowed funds		$9,109		$14,047

⁽¹⁾September 30, 2020 balances reflect the September 2020 completion of (i) $621 million in private exchange offers for five series of outstanding subordinated notes whereby participants received a combination of the Company’s newly issued 2.638% fixed-rate subordinated notes due 2032 and an additional cash payment and (ii) $11 million in related cash tender offers whereby validly tendered and accepted subordinated notes were purchased by Citizens and subsequently cancelled.

⁽²⁾Rate disclosed reflects the floating rate as of September 30, 2020 or final rate, as applicable.

The Parent Company’s long-term borrowed funds as of September 30, 2020 and December 31, 2019 included principal balances of $3.5 billion and $2.5 billion, respectively, and unamortized deferred issuance costs and/or discounts of ($92) million and ($8) million, respectively. CBNA and other subsidiaries’ long-term borrowed funds as of September 30, 2020 and December 31, 2019 included principal balances of $5.6 billion and $11.5 billion, respectively, with unamortized deferred issuance costs and/or discounts of ($13) million and ($13) million, respectively, and hedging basis adjustments of $128 million and $50 million, respectively. See Note 9 for further information about the Company’s hedging of certain long-term borrowed funds.

Advances, lines of credit, and letters of credit from the FHLB are collateralized by pledged mortgages and pledged securities at least sufficient to satisfy the collateral maintenance level established by the FHLB. The utilized borrowing capacity for FHLB advances and letters of credit was $3.7 billion and $9.8 billion at September 30, 2020 and December 31, 2019, respectively. The Company’s available FHLB borrowing capacity was $13.2 billion and $7.2 billion at September 30, 2020 and December 31, 2019, respectively. Citizens can also borrow from the FRB discount window to meet short-term liquidity requirements. Collateral, including certain loans, is pledged to support this borrowing capacity. At September 30, 2020, the Company’s unused secured borrowing capacity was approximately $61.7 billion, which includes unencumbered securities, FHLB borrowing capacity, and FRB discount window capacity.

The following table presents a summary of maturities for the Company’s long-term borrowed funds at September 30, 2020:



(in millions)	Parent Company		CBNA and Other Subsidiaries		Consolidated
Year
2020		$—		$752		$752
2021	350		1,014		1,364
2022	181		1,790		1,971
2023	—		780		780
2024	184		—		184
2025 and thereafter	2,724		1,334		4,058
Total		$3,439		$5,670		$9,109