Borrowed Funds and Subordinated Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Borrowed Funds and Subordinated Debt Borrowed Funds and Subordinated Debt
Borrowed funds and subordinated debt outstanding at December 31, for the years indicated are summarized as follows:
 202120202019
(Dollars in thousands)AmountAverage
Rate		AmountAverage
Rate		AmountAverage
Rate
Borrowed funds$5,479 1.07 %$4,774 0.30 %$96,173 1.86 %
Subordinated debt58,979 5.54 %73,744 5.69 %14,872 6.22 %
Total borrowed funds and subordinated debt$64,458 5.16 %$78,518 5.36 %$111,045 2.44 %

At December 31, 2021, 2020 and 2019, borrowed funds were comprised solely of FHLB borrowings.
The contractual maturity distribution as of December 31, 2021, of borrowed funds with the weighted average cost for each category is set forth below:
202120202019
(Dollars in thousands)BalanceRateBalanceRateBalanceRate
Overnight$— — %$— — %$92,000 1.85 %
Within 12 months2,485 0.29 %4,316 0.33 %3,697 2.22 %
Over 5 years2,994 1.70 %458 — %476 — %

At December 31, 2021, 2020, and 2019, outstanding FHLB borrowings, excluding overnight advances, included specific lending projects under the FHLB's community development program.

Maximum FHLB and other borrowings outstanding at any month end during 2021 was $8.6 million and $96.2 million for both 2020 and 2019.

The following table summarizes the average balance and average cost of borrowed funds for the years indicated:
 Year ended December 31,
 202120202019
(Dollars in thousands)Average
Balance		Average
Cost		Average
Balance		Average
Cost		Average
Balance		Average
Cost
FHLB advances$7,632 0.79 %$35,762 1.65 %$15,885 2.42 %
FRB PPPLF advances— — %4,703 0.35 %— — %
Other borrowings— — %14 1.07 %55 2.64 %
Total borrowed funds$7,632 0.79 %$40,479 1.50 %$15,940 2.42 %
 
The Company's primary borrowing source is the FHLB, however the Company may choose to borrow from other established business partners. "Other borrowings" represents overnight advances from the FRB discount window or federal funds purchased from correspondent banks, advanced as part of our annual test of these external funding facilities.

As a member of the FHLB, the Bank has the potential capacity to borrow an amount up to the value of its discounted qualified collateral. Borrowings from the FHLB are secured by certain securities from the Company's investment portfolio not otherwise pledged and certain residential and commercial real estate loans. At December 31, 2021, based on qualifying collateral less outstanding advances, the Bank had the capacity to borrow additional funds from the FHLB of up to approximately $790.0 million. In addition, based on qualifying collateral, the Bank had the capacity to borrow funds from the FRB discount window up to approximately $350.0 million at December 31, 2021. The Bank also has pre-approved borrowing arrangements with large correspondent banks to provide overnight and short-term borrowing capacity. In April 2020, the Company established access to the FRB's PPPLF, which provided funding secured by the pledge of PPP loans. Advances issued under the PPPLF were non-recourse. The amount and term of an advance matched the amount and remaining term of the PPP loans pledged. The FRB's PPPLF program expired on July 31, 2021.

The Company had outstanding subordinated debt, net of deferred issuance costs, of $59.0 million, and $73.7 million at December 31, 2021, and December 31, 2020, respectively.

On July 7, 2020, the Company issued $60.0 million of fixed-to-floating rate, 10 year subordinated notes due 2030 (the "2020 Notes"), and callable at the Company's option on or after July 15, 2025. In January 2015, the Company issued $15.0 million of fixed-to-floating rate, 15 year subordinated notes due 2030 (the "2015 Notes") which were redeemed by the Company on March 31, 2021, as discussed below. The July 2020 Notes are intended to qualify as Tier 2 capital for regulatory purposes.

The July 2020 Notes pay interest at a fixed rate of 5.25% per annum through October 15, 2025, after which floating quarterly rates apply. Original debt issuance costs were $1.2 million and have been netted against the subordinated debt on the consolidated balance sheet in accordance with accounting guidance. These costs are being amortized to interest expense over the life of the July 2020 Notes.
On March 31, 2021, the Company redeemed the 2015 Notes which were due in January 30, 2030. The redemption of the 2015 Notes was recorded as a loss on the extinguishment of subordinated debt in the amount of $713 thousand, consisting of $600 thousand in prepayment penalties and $113 thousand in unamortized issuance costs.