Note 10: Borrowings

The following table is a summary of borrowings as of December 31, 2017, and December 31, 2016. Junior subordinated debentures are discussed in detail in Note 11:


	2017		2016
Securities sold under repurchase agreements	$	29,918	$	25,715
FHLBC advances1		115,000		70,000
Junior subordinated debentures		57,639		57,591
Senior notes		44,058		43,998
Total borrowings	$	246,615	$	197,304

1 Included in other short-term borrowing on the balance sheet.

The Company enters into deposit sweep transactions where the transaction amounts are secured by pledged securities. These transactions consistently mature within 1 to 90 days from the transaction date and are governed by sweep repurchase agreements. All sweep repurchase agreements are treated as financings secured by U.S. government agencies and collateralized mortgage-backed securities and had a carrying amount of $29.9 million at December 31, 2017, and $25.7 million at December 31, 2016. The fair value of the pledged collateral was $40.0 million and $43.0 million at December 31, 2017 and December 31, 2016, respectively. At December 31, 2017, there were no customers with secured balances exceeding 10% of stockholders’ equity.

Total FHLBC advances are generally limited to the lower of 35% of total assets and the amount of acceptable collateral adjusted for applicable funding percentages as determined by the FHLBC. As of December 31, 2017, the Bank had outstanding advances in the amount of $115.0 million with $110.0 million at an interest rate of 1.42% and $5.0 million at an interest rate at 1.44%. As of December 31, 2016, the Bank had outstanding advances in the amount of $70.0 million at an interest rate of 0.70%. As of December 31, 2017, FHLBC stock owned by the Bank was valued at $5.4 million, the fair value of securities pledged to the FHLBC was $80.9 million, and the principal balance of loans pledged was $277.4 million. Based on the total amount of securities and loans pledged, the Bank had total borrowing capacity of $286.3 million. Adjusting for the outstanding advances and letters of credit, the Bank had a remaining funding availability of $132.0 million on December 31, 2017.

The Company completed a debt retirement and simultaneous senior debt offering in the fourth quarter of 2016. Subordinated debt of $45.0 million and $500,000 of senior debt outstanding, scheduled to mature in March 2018, were paid off with the proceeds of a $45.0 million senior notes issuance and cash on hand. The senior notes mature in ten years, and terms include interest payable semiannually at 5.75% for five years. Beginning December 2021, the senior debt will pay interest at a floating rate, with interest payable quarterly at three month LIBOR plus 385 basis points. The notes are redeemable, in whole or in part, at the option of the Company, beginning with the interest payment date on December 31, 2021, and on any floating rate interest payment date thereafter, at a redemption price equal to 100% of the principal amount of the notes plus accrued and unpaid interest. As of December 31, 2017 and 2016, unamortized debt issuance costs related to the senior notes were $942,000 and $1.0 million, respectively, and are included as a reduction of the balance of the senior notes on the Consolidated Balance Sheet. These deferred issuance costs will be amortized to interest expense over the ten year term of the notes and included in the Consolidated Statements of Income.

Scheduled maturities and weighted average rates of borrowings for the years ended December 31 were as follows:


	2017				2016
			Weighted				Weighted
			Average				Average
	Balance		Rate		Balance		Rate
2017		N/A	N/A		$	95,715	0.51	%
2018	$	144,918	0.86	%		-	-
2019		-	-			-	-
2020		-	-			-	-
2021		-	-			-	-
2022		-	-			-	-
Thereafter		101,697	6.01			101,589	6.65
Total borrowings	$	246,615	2.98	%	$	197,304	3.67	%