Borrowed Funds

12 Months Ended

Dec. 31, 2022

Borrowed Funds [Abstract]

Borrowed Funds

11. Borrowed Funds

The following is a summary of short-term borrowings at December 31, 2022 and 2021 with original maturities of less than one year:

(Dollars in thousands)	2022		2021
Securities sold under agreements to repurchase:
Outstanding at end of year	$	64,565	$	57,699
Weighted average interest rate at year end		0.12%		0.15%
Maximum amount outstanding as of any month end	$	75,912	$	72,396
Average amount outstanding	$	63,182	$	57,697
Approximate weighted average rate during the year		0.12%		0.15%

Repurchase agreements were secured by $74.6 million in investment securities at December 31, 2022 and $69.3 million at December 31, 2021.

In March 2004, Trust I and Trust II issued preferred securities with an aggregate liquidation amount of $30.0 million to third-party investors and issued common equity with an aggregate liquidation amount of $0.9 million to First United Corporation. These Trusts used the proceeds of these offerings to purchase an equal amount of TPS Debentures, as follows:

$20.6 million—floating rate payable quarterly based on three-month LIBOR plus 275 basis points (7.49% at December 31, 2022), maturing in 2034, became redeemable five years after issuance at First United Corporation’s option.

$10.3 million--floating rate payable quarterly based on three-month LIBOR plus 275 basis points (7.49% at December 31, 2022) maturing in 2034, became redeemable five years after issuance at First United Corporation’s option.

The TPS Debentures issued to each of the Trusts represent the sole assets of that Trust, and payments of the TPS Debentures by First United Corporation are the only sources of cash flow for the Trust. First United Corporation has the right, without triggering a default, to defer interest on all of the TPS Debentures for up to 20 quarterly periods, in which case distributions on the preferred securities will also be deferred. Should this occur, the Corporation may not pay dividends or distributions on, or repurchase, redeem or acquire any shares of its capital stock.

The following is a summary of long-term borrowings at December 31, 2022 and 2021 with original maturities exceeding one year:

(In thousands)	2022		2021
Junior subordinated debt	$	30,929	$	30,929
Total long-term debt	$	30,929	$	30,929

The contractual maturities of the long-term borrowings outstanding at December 31, 2022 is 2034.

The Bank has a borrowing capacity agreement with the FHLB in an amount equal to 30% of the Bank’s assets. The available line of credit equaled $544.1  million at December 31, 2022 and $520.1 million at December 31, 2021. This line of credit, which can be used for both short and long-term funding, can only be utilized to the extent of available collateral. The line is secured by certain qualified mortgage, commercial and home equity loans as follows (in thousands):

1-4 family mortgage loans	$	119,360
Commercial loans		47,415
Multi-family loans		19,564
Home equity loans		12,458
	$	198,797

At December 31, 2022, $195.3 million was available for additional borrowings.

The Bank also has various unsecured lines of credit totaling $140.0 million with various financial institutions and a $9.6 million secured line with the Federal Reserve to meet daily liquidity requirements. At December 31, 2022 and 2021, there were no borrowings under these credit facilities.

Repurchase Agreements - The Bank has retail repurchase agreements with customers within its local market areas. Repurchase agreements generally have maturities of one to four days from the transaction date. These borrowings are collateralized with securities that we own and are held in safekeeping at independent correspondent banks.

FHLB Advances - During 2021, the Company prepaid the $70.0 million of FHLB advances for a prepayment penalty of $2.4 million