10. Short-term borrowings

Short-term borrowings consisted of FHLB advances representing overnight borrowings at September 30, 2018 and December 31, 2017:

At and for the nine months ended September 30, 2018

Weighted

Maximum

Average

Ending

Average

Month-End

Rate for

Rate at

Balance

the nine months ended September 30, 2018

30-Sep-18

FHLB advances

99,450

153,669

189,275

2.02

2.38

At and for the year ended December 31, 2017

Weighted

Maximum

Average

Ending

Average

Month-End

Rate for

Rate at End

Balance

the Year

of the Year

FHLB advances

123,675

76,846

123,675

1.17

1.54

The Bank has an agreement with the FHLB which allows for borrowings up to its maximum borrowing capacity based on a percentage of qualifying collateral assets. At September 30, 2018, the Bank’s maximum borrowing capacity was $694,115 of which $147,811 was outstanding in borrowings. At December 31, 2017, the Bank’s maximum borrowing capacity was $631,782 of which $173,409 was outstanding in borrowings. Short-term borrowings were used to fund our loan growth during the first half of 2018 resulting in higher average balances as deposit balances remained relatively flat, however, during the three months ended September 30, 2018 deposit balances increased allowing the Bank to decrease the amount of its short-term borrowings. Short-term borrowings are lower by $24,225 since year end 2017. Advances with the FHLB are secured under terms of a blanket collateral agreement by a pledge of FHLB stock and certain other qualifying collateral, such as investments and mortgage-backed securities and mortgage loans. Interest accrues daily on the FHLB advances based on rates of the FHLB discount notes. This rate resets each day.