Borrowings

Federal Funds Purchased – The Bank had unsecured lines of credit with correspondent banks for overnight borrowings totaling $92.0 million at December 31, 2018 and $100.4 million at December 31, 2017. In general, interest rates on these lines approximate the federal funds target rate. We had no overnight borrowings under these credit facilities at December 31, 2018 and December 31, 2017.

Federal Home Loan Bank Borrowings – As of December 31, 2018 and 2017, the Bank had lines of credit with the FHLB totaling $629.4 million and $538.9 million, respectively, based on eligible collateral of certain loans. FHLB overnight borrowings were $7.0 million at a rate of 2.56% on December 31, 2018. There were no borrowings at December 31, 2017.

Federal Reserve Line of Credit – The Bank has a line of credit with the FRBSF secured by certain residential loans. At December 31, 2018 and 2017, the Bank had borrowing capacity under this line totaling $69.7 million and $52.1 million, respectively, and had no outstanding borrowings with the FRBSF.

As part of an acquisition, Bancorp assumed two subordinated debentures due to NorCal Community Bancorp Trusts I and II, established for the sole purpose of issuing trust preferred securities on September 22, 2003 and December 29, 2005, respectively. The subordinated debentures were recorded at fair values totaling $4.95 million at acquisition date with contractual values totaling $8.2 million. The difference between the contractual balance and the fair value at acquisition date is accreted into interest expense over the lives of the debentures.

On October 7, 2018, Bancorp redeemed in full the subordinated debentures due to NorCal Community Bancorp Trust I, resulting in $916 thousand accelerated accretion. Accretion on the subordinated debentures totaled $1,025 thousand and $153 thousand in 2018 and 2017, respectively.

Bancorp has the option to defer payment of the interest on the subordinated debentures in Trust II for a period of up to five years, as long as there is no default on the subordinated debentures. In the event of interest deferral, dividends to Bancorp common stockholders are prohibited. The trust preferred securities were sold and issued in private transactions pursuant to an exemption from registration under the Securities Act of 1933, as amended. Bancorp has guaranteed, on a subordinated basis, distributions and other payments due on trust preferred securities totaling $4.0 million issued by Trust II, which have identical maturity, repricing and payment terms as the subordinated debentures.

The following table summarizes the contractual terms of the subordinated debentures due to Trust II as of December 31, 2018:



(in thousands)
Subordinated debentures due to NorCal Community Bancorp Trust II on March 15, 2036 with interest payable quarterly, based on 3-month LIBOR plus 1.40%, repricing quarterly (4.19% as of December 31, 2018), redeemable, in whole or in part, on any interest payment date	$	4,124

Borrowings at December 31, 2018 and 2017 are summarized as follows:



	2018							2017
(dollars in thousands)	Carrying Value		Average Balance		Average Rate			Carrying Value		Average Balance		Average Rate
FHLB overnight borrowings	$	7,000	$	105	2.03	%		$	—	$	1	1.75	%
FHLB fixed-rate advances	$	—	$	—	—	%		$	—	$	—	—	%
Subordinated debentures	$	2,640	$	5,025	26.29	%	¹	$	5,739	$	5,664	7.65	%

¹ Subordinated debentures average rate includes the impact of the $916 thousand accelerated accretion due to early redemption of subordinated debentures due to NorCal Community Bancorp Trust I.