. Other Borrowings

ther borrowings consist of long-term FHLB advances and subordinated notes payable to the Company’s unconsolidated trusts. The table below displays a summary of the ending balance and average rate for such borrowed funds on the dates indicated.

			Average					Average
December 31, (Dollars in thousands)	201 7		Rate			201 6		Rate
Federal Home Loan Bank advances	$	3,479		3.27	%	$	18,646		3.97	%
Subordinated notes payable		33,506		2.85			33,506		2.30
Total FHLB advances and subordinated notes payable	$	36,985		2.89	%	$	52,152		2.89	%

At times the Company

’s short-term borrowings include federal funds purchased and FHLB advances. At year-end

2017

and

2016,

short-term borrowings consist entirely of securities sold under agreements to repurchase which are discussed further in Note

FHLB advances are made pursuant to several different credit programs, which have their own interest rates and range of maturities.

December 31, 2017,

interest rates on all FHLB advances are fixed and range between

2.99%

and

5.81%,

averaging

3.27%

over a remaining weighted average maturity period of

years. At

December 31, 2016,

interest rates on FHLB advances ranged between

2.99%

and

5.81%,

averaging

3.97%

over a remaining weighted average maturity period of

years. Long-term FHLB borrowings of

$3.0

million and

$18.0

million at year-end

2017

and

2016,

respectively, were callable quarterly.

None

of the long-term FHLB advances are convertible to a floating interest rate.

For FHLB advances, the

Company pledges FHLB stock and certain qualifying mortgage loans as collateral

Pledged loans consist primarily of fully disbursed, otherwise unencumbered,

family

first

mortgage loans. Based on this collateral and the Company’s holdings of FHLB stock, the Company is eligible to borrow up to an additional

$135

million from the FHLB at year-end

2017

Loans with a carrying value of $

612

million and

$416

million at

December 31, 2017

and

December 31, 2016,

respectively, were pledged to secure borrowings and lines of credit. Such borrowings primarily include FHLB advances and short-term borrowing arrangements with the Federal Reserve.

During

2005

, the Company completed

two

private offerings of trust preferred securities through

two

separate Delaware statutory trusts sponsored by the Company. Farmers Capital Bank Trust I (“Trust I”) sold

$10.0

million of preferred securities and Farmers Capital Bank Trust II (“Trust II”) sold

$15.0

million of preferred securities. The proceeds from the offerings were used to fund the cash portion of the acquisition of Citizens Bancorp, Inc., the former parent company of Citizens Northern. The preferred securities issued by Trust I mature

September 30, 2035

and are redeemable at any time by the Trust at par.

January 2016

, the Company terminated Trust II as a result of the early extinguishment of debt issued to the trust

and recorded a pretax gain of

$4.1

million. The Company became aware that all

$15

million of the trust preferred securities issued by Trust II would be auctioned off as part of the liquidation of a larger pooled collateralized debt obligation. The Company placed a bid of

$11.0

million for the securities, which was accepted by the trustee. The Company then canceled the preferred and common securities issued by the trust and extinguished the debentures, which totaled

$15.5

million.

Farmers Capital Bank Trust III (“Trust III”), a Delaware statutory trust sponsored by the Company, was formed during

2007

. Trust III sold

$22.5

million of preferred securities for the purpose of financing the cost of acquiring Company shares under a share repurchase program. The preferred securities mature on

November 1, 2037

and are redeemable at any time by the Trust at par. Trust I and Trust III are hereafter collectively referred to as the “Trusts.”

The Trusts used the proceeds from the sale of preferred securities, plus capital contributed to establish the trusts, to purchase the Company

’s subordinated notes in amounts and bearing terms that parallel the amounts and terms of the respective preferred securities. The subordinated notes to Trust I and Trust III mature in

2035

and

2037,

respectively, and bear a floating interest rate (current

three

-month LIBOR plus

150

basis points in the case of the notes held by Trust I and current

three

-month LIBOR plus

132

basis points in the case of the notes held by Trust III). Interest on the notes is payable quarterly. Interest payments to the Trusts and distributions to preferred shareholders by the Trusts

may

be deferred for

consecutive quarterly periods. There have been

deferrals of interest payments during the life of the Trusts.

The subordinated notes are redeemable in whole or in part, without penalty, at the Company

’s option. The notes are junior in right of payment of all present and future senior indebtedness. At

December 31, 2017

and

2016

the balance of the subordinated notes payable to Trust I and Trust III was

$10.3

million and

$23.2

million, respectively. The interest rates in effect as of the last determination date for

2017

were

3.19%

and

2.70%

for Trust I and Trust III, respectively. For

2016

these rates were

2.50%

and

2.21%

for Trust I and Trust III, respectively.

The Company is

not

considered the primary beneficiary of the Trusts; therefore the Trusts are

not

consolidated into its financial statements. Accordingly, the Company does

not

report the securities issued by the Trusts as liabilities, but instead reports as liabilities the subordinated notes issued by the Company and held by the Trusts. The Company, which owns all of the common securities of the Trusts, accounts for its investment in each of the Trusts as

other assets. The Company records interest expense on the corresponding notes issued to the Trusts on its statements of income.

The subordinated notes

, net of the Company’s investment in the Trusts,

may

be included in Tier

capital (with certain limitations applicable) under current regulatory capital guidelines and interpretations. The net amount of subordinated notes in excess of the limit

may

be included in Tier

capital, subject to restrictions. At year-end

2017and

2016,

the Company’s Tier

capital included

$32.5

million, which represents the full amount of the subordinated notes net of the Company’s investment in the Trusts at those dates.

Maturities of

FHLB advances and subordinated notes payable at

December 31, 2017

are as follows:


(In thousands)	Amount
201 8	$	3,000
201 9		5
20 20		474
20 21		-
20 22		-
Thereafter		33,506
Total	$	36,985