Note 8. Credit Facilities

The Company owns capital stock of the Federal Home Loan Bank of Atlanta (FHLB) as a condition for $308.6 million in convertible advance credit facilities from the FHLB. As of December 31, 2019, the Company had remaining credit availability of $211.7 million under these facilities.

FHLB advances included in the balance sheet as of December 31, 2019 and 2018 are as follows:


Long-term advances	December 31, 2019
Dollars in Thousands	Outstanding Balance	Interest Rate		Maturity Date	Interest Payment
Fixed rate hybrid	15,000	2.09	%	June 2020	Fixed, paid monthly
Fixed rate hybrid	5,000	3.04	%	November 2020	Fixed, paid monthly
Fixed rate hybrid	5,000	2.91	%	November 2020	Fixed, paid quarterly
Fixed rate hybrid	6,000	2.44	%	April 2021	Fixed, paid quarterly
Convertible*	10,000	2.68	%	May 2021	Fixed, paid quarterly
Fixed rate hybrid	5,000	3.15	%	October 2022	Fixed, paid quarterly
Principal reducing credit	1,393	1.62	%	March 2023	Fixed, paid quarterly
Principal reducing credit	1,437	1.99	%	March 2026	Fixed, paid quarterly
Total long-term advances	48,830

Short-term advances	December 31, 2019
Dollars in Thousands	Outstanding Balance	Interest Rate		Maturity Date	Interest Payment
Fixed rate	12,000	1.73	%	January 2020	Fixed, at maturity
Fixed rate	4,500	1.76	%	January 2020	Fixed, at maturity
Fixed rate	7,600	1.68	%	January 2020	Fixed, at maturity
Fixed rate	7,700	1.68	%	January 2020	Fixed, at maturity
Fixed rate	6,000	1.70	%	January 2020	Fixed, at maturity
Fixed rate	3,200	1.71	%	January 2020	Fixed, at maturity
Fixed rate	7,000	1.70	%	January 2020	Fixed, at maturity
Total short-term advances	48,000


Long-term advances	December 31, 2018
Dollars in Thousands	Outstanding Balance	Interest Rate		Maturity Date	Interest Payment
Fixed rate hybrid	15,000	1.51	%	June 2019	Fixed, paid monthly
Fixed rate hybrid	5,000	3.04	%	November 2020	Fixed, paid monthly
Fixed rate hybrid	5,000	2.91	%	November 2020	Fixed, paid quarterly
Convertible**	10,000	2.68	%	May 2021	Fixed, paid quarterly
Fixed rate hybrid	5,000	3.15	%	October 2022	Fixed, paid quarterly
Principal reducing credit	1,821	1.62	%	March 2023	Fixed, paid quarterly
Principal reducing credit	1,668	1.99	%	March 2026	Fixed, paid quarterly
Total long-term advances	43,489

Short-term advances	December 31, 2018
Dollars in Thousands	Outstanding Balance	Interest Rate		Maturity Date	Interest Payment
Fixed rate	7,000	2.65	%	January 2019	Fixed, at maturity
Total short-term advances	7,000

* In May 2018 the Company borrowed an additional $10.0 million with interest payable quarterly fixed at $2.68%, maturing in May 2021. The FHLB has the option of converting the rate on this long‑term borrowing to a three month LIBOR‑based floating rate in May 2020.

** In May 2015, the Company borrowed an additional $10.0 million with interest payable quarterly fixed at 1.08%, maturing in May 2020. The FHLB had the option of converting the rate on this long‑term borrowing to a three month LIBOR‑based floating rate at any time. In May of 2018 the FHLB exercised the convertible option and the Bank paid off the advance.

In June 2005, the Company borrowed $5.0 million from the FHLB with interest payable quarterly fixed at 3.78% through June 2010, maturing in June 2015. The FHLB had the option of converting the rate on this borrowing to a three month LIBOR based floating rate in 2010, however it chose not to do so, therefore the rate on this borrowing would have remained at 3.78% until maturity. During 2012, this borrowing was restructured to a three month LIBOR based floating rate for the first two years, then adjusting to 1.83% until maturity in December 2018. Due to a prepayment penalty of $405 thousand, which was amortized to final maturity as an adjustment to interest expense, the effective rate was the three month LIBOR based floating rate plus 1.35% for the first two years, adjusting to 3.18% until maturity. As of December 31, 2018 the premium was fully amortized.

In September 2005, the Company borrowed an additional $5 million with interest payable quarterly fixed at 4.06% through September 2009, maturing in September 2015. The FHLB had the option of converting the rate on this borrowing to a three month LIBOR based floating rate in 2009, however it chose not to do so, therefore the rate on this borrowing would have remained at 4.06% until maturity. During 2012, this borrowing was restructured to a three month LIBOR based floating rate for the first two years, then adjusting to 1.83% until maturity in December 2018. Due to a prepayment penalty of $500 thousand, which was amortized to final maturity as an adjustment to interest expense, the effective rate was the three month LIBOR based floating rate plus 1.67% for the first two years, adjusting to 3.50% until maturity. As of December 31, 2018 the premium was fully amortized.

In September 2006, the Company borrowed an additional $5 million with interest payable quarterly fixed at 4.57% through September 2011, maturing in September 2016. The FHLB has the option of converting the rate on this long‑term borrowing to a three month LIBOR‑based floating rate in 2011, however it chose not to do so, therefore the rate on this borrowing would have remained at 4.57% until maturity. During 2012, this borrowing was restructured to a three month LIBOR based floating rate for the first two years, then adjusting to 1.83% until maturity in December 2018. Due to a prepayment penalty of $740 thousand, which was amortized to final maturity as an adjustment to interest expense, the effective rate was the three month LIBOR based floating rate plus 2.47% for the first two years, adjusting to 4.30% until maturity. As of December 31, 2018 the premium was fully amortized.

Average short‑term borrowing under FHLB approximated $9.3 million and $1.4 million for the years ended December 31, 2019 and 2018, respectively.

The Company has pledged a portion of its residential and commercial mortgage loan portfolio as collateral for these credit facilities. Principal balances outstanding on these pledged loans totaled approximately $223.5 million and $135.8 million at December 31, 2019 and 2018, respectively.

In addition to the FHLB credit facility, in October 2015, the Company entered into a subordinated loan agreement for an aggregate principal amount of $2.0 million. Interest‑only payments are due quarterly at 6.71% per annum, and the outstanding principal balance matures in October 2025. In January 2018, the Company entered into a subordinated loan agreement for an aggregate principal amount of $4.5 million to fund the acquisition of Liberty Bell Bank, net of loan costs. Interest‑only payments are due quarterly at 6.875% per annum, and the outstanding principal balance matures in April 2028.

The proceeds of these long‑term borrowings were generally used to purchase higher yielding investment securities, fund additional loans, redeem preferred stock, or fund acquisitions. Additionally, the Company has secured credit availability of $5 million and unsecured credit availability of $59 million with various correspondent banks for short‑term liquidity needs, if necessary. The secured facility must be collateralized by specific securities at the time of any usage. At December 31, 2019, there were no borrowings outstanding, and securities pledged under this secured credit facility had an amortized cost and fair value of $7 thousand and $8 thousands, respectively. At December, 2018 there were no borrowings outstanding, and securities pledged under this credit facility had an amortized cost and fair value of $8 thousand and $9 thousand, respectively.

The Company has pledged investment securities available for sale with a combined amortized cost and fair value of $2.3 million with the FRB to secure Discount Window borrowings at December 31, 2019. There were no pledged securities at December 31, 2018. At December 31, 2019 and 2018 there were no outstanding borrowings under these facilities.

The Company provides Johnson Mortgage Company (JMC) a line of credit. In addition, JMC has a line of credit with another financial institution in the amount of $3.0 million. The interest rate is the weekly average of the one month LIBOR plus 2.250%, rounded to the nearest 0.125% (4.0% at December 31, 2019). The rate is subject to change the first of every month. Amounts borrowed are collateralized by a security interest in the mortgage loans financed under the line and are payable upon demand. The line of credit is set to renew or mature on May 31, 2020. The balance outstanding at December 31, 2019 was $576 thousand. Interest expense on the line of credit was $14 thousand during the year ended December 31, 2019

Maturities on long‑term debt over the next five years and thereafter are as follows:


2020	$	73,659
2021		16,659
2022		5,659
2023		337
2024 and thereafter		516