(7) FUNDS BORROWED

The outstanding balances of funds borrowed were as follows:


	Payments Due for the Fiscal Year Ending December 31,												Bank Holding Company Accounting December 31, 2018		Investment Company Accounting December 31, 2017		Interest Rate⁽¹⁾
(Dollars in thousands)	2019		2020		2021		2022		2023		Thereafter		Bank Holding Company Accounting December 31, 2018		Investment Company Accounting December 31, 2017		Interest Rate⁽¹⁾
Deposits	$	325,890	$	191,054	$	158,846	$	136,508	$	35,742	$	—	$	848,040	$	—		2.14	%
DZ loan		—		—		—		—		—		—		—		99,984		—
SBA debentures and borrowings		3,226		25,873		8,500		—		5,000		37,500		80,099		79,564		3.40	%
Notes payable to banks		51,452		458		7,145		280		280		—		59,615		81,450		4.55	%
Retail notes ⁽²⁾		—		—		33,625		—		—		—		33,625		33,625		9.00	%
Preferred securities ⁽²⁾		—		—		—		—		—		33,000		33,000		33,000		4.86	%
Other borrowings		500		7,149		—		—		—		—		7,649		—		2.00	%

Total	$	381,068	$	224,534	$	208,116	$	136,788	$	41,022	$	70,500	$	1,062,028	$	327,623		2.67	%

(1)	Weighted average contractual rate as of December 31, 2018.

(2)	Relates to loans held at the Company, Parent Company only.

(A) DEPOSITS

Deposits are raised through the use of investment brokerage firms who package deposits qualifying for FDIC insurance into pools that are sold to the Bank. The rates paid on the deposits are highly competitive with market rates paid by other financial institutions. Additionally, a brokerage fee is paid, depending on the maturity of the deposits, which averages less than 0.15%. Interest on the deposits is accrued daily and paid monthly, quarterly, semiannually, or at maturity. All time deposits are in denominations of less than $250,000 and have been originated through certificates of deposit broker relationships. The table presents time deposits of $100,000 or more by their maturity:


(Dollars in thousands)	December 31, 2018
Three months or less	$	72,280
Over three months through six months		110,012
Over six months through one year		143,598
Over one year		522,150

Total deposits	$	848,040

(B) DZ LOAN

In December 2008, Trust III entered into the DZ loan agreement with DZ Bank, to provide up to $200,000,000 of financing through a commercial paper conduit to acquire medallion loans from MFC (DZ loan), which was extended in December 2013 until December 2016 through an amended and restated credit agreement, which has been further extended several times and currently terminates in September 2019. The line was reduced to $150,000,000, and was further reduced in stages to $125,000,000 on July 1, 2016, remained as an amortizing facility and was restructured during the fourth quarter of 2018.

Borrowings under Trust III’s DZ loan are collateralized by Trust III’s assets. MFC is the servicer of the loans owned by Trust III. In addition, if certain financial tests are not met, MFC can be replaced as the servicer. See Note 23 for more information about Trust III and the DZ loan.

(C) SBA DEBENTURES AND BORROWINGS

Over the years, the SBA has approved commitments for MCI and FSVC, typically for a four and half year term and a 1% fee, which was paid. During 2017, the SBA restructured FSVC’s debentures with SBA totaling $33,485,000 in principal into a new loan by the SBA to FSVC in the principal amount of $34,024,756 (the SBA Loan). In connection with the SBA Loan, FSVC executed a Note (the SBA Note), with an effective date of March 1, 2017, in favor of SBA, in the principal amount of $34,024,756. The SBA Loan bears interest at a rate of 3.25% per annum, required a minimum of $5,000,000 of principal and interest to be paid on or before February 1, 2018 (which was paid) and a minimum of $10,000,000 of principal and interest to be paid on or before March 15, 2019, and all remaining unpaid principal and interest on or before February 1, 2020, the final maturity date. The SBA Loan agreement contains covenants and events of defaults, including, without limitation, payment defaults, breaches of representations and warranties and covenants defaults. As of December 31, 2018, $172,485,000 of commitments had been fully utilized, there were $3,000,000 of commitments available, and $80,099,000 was outstanding, including $29,099,000 under the SBA Note.

(D) NOTES PAYABLE TO BANKS

The Company and its subsidiaries have entered into note agreements with a variety of local and regional banking institutions over the years. The notes are typically secured by various assets of the underlying borrower.

The table below summarizes the key attributes of the Company’s various borrowing arrangements with these lenders as of December 31, 2018.

(Dollars in thousands)

Borrower

# of Lenders/
Notes

Note
Dates

Maturity
Dates

Type

Note
Amounts

Balance
Outstanding at
December 31,
2018

Monthly Payment

Average Interest
Rate at
December 31,
2018

Interest Rate
Index⁽¹⁾

The Company

6/6

4/11 -

8/14

3/19 -

7/19

Term loans and demand notes secured by pledged loans ⁽²⁾

38,870

⁽²⁾

38,870

Interest only

⁽³⁾

5.09

Various

⁽³⁾

Medallion
Chicago

3/28

11/11 -

12/11

6/19 -

9/21

Term loans secured by owned Chicago medallions⁽⁴⁾

25,708

19,345

$171 of
principal &
interest

3.50

N/A

Medallion
Funding

1/1

11/18

12/23

1,400

$70
principal &
interest paid
quarterly

4.00

N/A

65,978

59,615

(1)	At December 31, 2018, 30 day LIBOR was 2.50%, 360 day LIBOR was 3.01%, and the prime rate was 5.50%.

(2)	One note has an interest rate of Prime, one note has an interest rate of Prime plus 0.50%, one note has a fixed interest rate of 3.75%, one note has an interest rate of LIBOR plus 3.75%, and the other interest rates on these borrowings are LIBOR plus 2%.

(3)	Various agreements call for remittance of all principal received on pledged loans subject to minimum monthly payments ranging up to or from $12 to $75.

(4)	Guaranteed by the Company.

In November 2018, MFC entered into a note to the benefit of DZ Bank for $1,400,000 at a 4.00% interest rate due December 2023, as part of the restructuring of the DZ loan. See Note 23 for more information.

(E) RETAIL NOTES

In April 2016, the Company issued a total of $33,625,000 aggregate principal amount of 9.00% unsecured notes due 2021, with interest payable quarterly in arrears. The Company used the net proceeds from the offering of approximately $31,786,000 to make loans and other investments in portfolio companies and for general corporate purposes, including repaying borrowings under its DZ loan in the ordinary course of business.

(F) PREFERRED SECURITIES

In June 2007, the Company issued and sold $36,083,000 aggregate principal amount of unsecured junior subordinated notes to Fin Trust which, in turn, sold $35,000,000 of preferred securities to Merrill Lynch International and issued 1,083 shares of common stock to the Company. The notes bear a variable rate of interest of 90 day LIBOR (2.81% at December 31, 2018) plus 2.13%. The notes mature in September 2037 and are prepayable at par. Interest is payable quarterly in arrears. The terms of the preferred securities and the notes are substantially identical. In December 2007, $2,000,000 of the preferred securities were repurchased from a third party investor. At December 31, 2018, $33,000,000 was outstanding on the preferred securities.

(G) OTHER BORROWINGS

In November and December 2017, RPAC amended the terms of various promissory notes with affiliate Richard Petty (refer to Note 13 for more details). At December 31, 2017, the total outstanding on these notes was $7,007,894 at a 2.00% annual interest rate compounded monthly and due March 31, 2020. As of December 31, 2018, $7,149,000 was outstanding on these notes. Additionally, RPAC has a short term promissory note to Travis Burt, an unrelated party, for $500,000 due on December 31, 2019.

(H) COVENANT COMPLIANCE

Certain of our debt agreements contain restrictions that require the Company and its subsidiaries to maintain certain financial ratios, including debt to equity and minimum net worth, which in the event of noncompliance could preclude their ability to pay dividends to the Company.