CHFC 2018 Annual Report

Short-term Borrowings Short-term borrowings were $2.04 billion and $2.00 billion at December 31, 2018 and 2017, respectively, and were comprised of FHLB borrowings at each period end. Short-termborrowings increased $35.0million, or 1.8%, during 2018, primarily due to the addition of short-termFHLB advances used to fund short-term liquidity needs resulting from loan growth and an increase in investment securities. FHLB advances are borrowings from the FHLB generally used to fund loans and are secured by both a blanket security agreement of residential mortgage first lien and other real estate loans with an aggregate book value equal to at least 140% of the advances and FHLB capital stock owned by Chemical Bank. The carrying value of loans eligible as collateral under the blanket security agreement was $7.81 billion at December 31, 2018. We rely on short-term FHLB advances to cover short-term liquidity needs. December 31, (Dollars in thousands) 2018 2017 2016 Short-term borrowings: Short-term FHLB advances Maximum outstanding at any month-end during the year $ 2,400,000 $ 2,000,000 $ 825,000 Balance outstanding at end of year $ 2,035,000 $ 2,000,000 $ 825,000 Weighted average interest rate at end of year 2.47% 1.39% 0.65% Average balance outstanding during the year $ 1,962,288 $ 1,612,123 $ 277,391 Weighted average interest rate during the year 1.90% 1.18% 0.49% Federal Funds Purchased and Other Short-Term Borrowings Maximum outstanding at any month-end during the year $ — $ — $ — Balance outstanding at end of year $ — $ — $ — Weighted average interest rate at end of year —% —% —% Average balance outstanding during the year $ 7,721 $ — $ — Weighted average interest rate during the year 3.96% —% —% Long-term Borrowings Long-term borrowings were $426.0 million and $372.9 million at December 31, 2018 and 2017, respectively. Long-term borrowings increased $53.1 million, or 14.2%, during 2018, primarily due to an increase in funding to support our asset growth. Our line-of-credit relationship was repaid in the second quarter of 2018 and the contract ended in the third quarter of 2018. A summary of the composition of long-term borrowings follows: December 31, (Dollars in thousands) 2018 2017 Long-term borrowings: Long-term FHLB advances $ 410,102 $ 337,204 Non-revolving line-of-credit — 19,963 Subordinated debt obligations 15,900 15,715 Total long-term borrowings $ 426,002 $ 372,882 67 Contractual Obligations and Credit-Related Commitments We have various financial obligations, including contractual obligations and commitments, which may require future cash payments. Refer to Note 1, Note 13, Note 14 and Note 15 to our Consolidated Financial Statements for a further discussion of these contractual obligations.