CHFC 2018 Annual Report

Note 15: Borrowings and Other Short-Term Liabilities A summary of the Corporation's short- and long-term borrowings, and other short-term liabilities follows: December 31, 2018 2017 (Dollars in thousands) Amount Weighted Average Rate (1) Amount Weighted Average Rate (1) Short-term borrowings: FHLB advances: 2.46% - 2.59% fixed-rate notes $ 2,035,000 2.47% $ 2,000,000 1.39% Long-term borrowings: FHLB advances: 1.00% - 2.72% fixed-rate notes due 2019 to 2025 (2) 410,102 2.00% 337,204 1.26% Line-of-credit: floating-rate based on one-month LIBOR plus 1.75% — — 19,963 3.10% Subordinated debt obligations: floating-rate based on three-month LIBOR plus 1.45% - 2.85% due 2034 to 2035 (3) 11,572 4.85% 11,425 3.69% Subordinated debt obligations: floating-rate based on three-month LIBOR plus 3.25% due in 2032 (4) 4,328 5.65% 4,290 4.59% Total long-term borrowings 426,002 2.11% 372,882 1.47% Total borrowings $ 2,461,002 2.41% $ 2,372,882 1.40% Other short-term liabilities: Collateralized customer deposits $ 382,687 0.75% $ 415,236 0.44% (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) The December 31, 2018 balance includes advances payable of $410.0 million and purchase accounting premiums of $0.1 million. The December 31, 2017 balance includes advances payable of $337.0 million and purchase accounting premiums of $0.2 million. (3) The December 31, 2018 balance includes advances payable of $15.0 million and purchase accounting discounts of $3.4 million. The December 31, 2017 balance includes advance payable of $15.0 million and purchase accounting discounts of $3.6 million. (4) The December 31, 2018 balance includes advances payable of $5.0 million and purchase accounting discounts of $0.7 million. The December 31, 2017 balance includes advance payable of $5.0 million and purchase accounting discounts of $0.7 million. Chemical Bank is a member of the FHLB, which provides short- and long-term funding collateralized by mortgage related assets to its members. Each advance is payable at its maturity date, with a prepayment penalty for fixed-rate advances. The Corporation's FHLB advances, including both short-term and long-term, require monthly interest payments and are collateralized by commercial and residential mortgage loans totaling $7.81 billion as of December 31, 2018. The Corporation's additional borrowing availability through the FHLB, subject to the FHLB's credit requirements and policies and based on the amount of FHLB stock owned by the Corporation, was $230.1 million at December 31, 2018. Effective January 1, 2018, the Corporation adopted ASU 2016-01. As a result, the Corporation will continue to report FHLB and FRB stock at cost. At December 31, 2018, the contractual principal payments due and the amortization/accretion of purchase accounting adjustments for the remaining maturities of long-term debt over the next five years and thereafter are as follows: (Dollars in thousands) Long-term Debt by Maturity Years Ending December 31, 2019 $ 100,058 2020 110,044 2021 — 2022 — 2023 — Thereafter 215,900 Total $ 426,002 Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 144