SHORT TERM DEBT AND LONG TERM DEBT

Short Term Debt



September 30,	2018		2017

Overnight federal funds purchased	$	422,000	$	987,000
Short-term FHLB advances	—		415,000
Short-term capital lease	65		62
Repurchase agreements	3,694		2,472
Total	425,759		1,404,534

The Company had $422.0 million of overnight federal funds purchased from the FHLB at September 30, 2018 as compared to $987.0 million at September 30, 2017. At September 30, 2018, the Company had no short-term advances from the FHLB as compared to $415.0 million at September 30, 2017.

The Bank has executed blanket pledge agreements whereby the Bank assigns, transfers, and pledges to the FHLB and grants to the FHLB a security interest in real estate and securities collateral. The Bank has the right to use, commingle, and dispose of the collateral it has assigned to the FHLB. Under the agreement, the Bank must maintain “eligible collateral” that has a “lending value” at least equal to the “required collateral amount,” all as defined by the agreement.

At fiscal year-end 2018 and 2017, the Bank pledged securities with fair values of approximately $1.06 billion and $1.07 billion, respectively, against specific FHLB advances. In addition, qualifying real estate loans of approximately $756.0 million, and $628.0 million were pledged as collateral at September 30, 2018, and 2017, respectively.

As of September 30, 2018, the Company was the lessee on three capital leases, two equipment leases and one property lease. At September 30, 2018, the portion of the liability expected to be expensed and amortized over the next 12 months is approximately $64,818.

Securities sold under agreements to repurchase totaled approximately $3.7 million and $2.5 million at September 30, 2018, and 2017, respectively.

An analysis of securities sold under agreements to repurchase at September 30, 2018 and 2017 follows:



September 30,	2018			2017
	(Dollars in Thousands)

Highest month-end balance	$	3,740		$	3,782
Average balance	2,557			2,225
Weighted average interest rate for the year	2.05		%	0.98		%
Weighted average interest rate at year end	2.48		%	1.59		%

The Company pledged securities with fair values of approximately $13.9 million at September 30, 2018, as collateral for securities sold under agreements to repurchase. There were $9.3 million of securities pledged as collateral for securities sold under agreements to repurchase at September 30, 2017.

The Company has a line of credit with another financial institution for $25.0 million as of September 30, 2018. This line of credit has no fee, and, as of September 30, 2018, the Company had not drawn on it.

Long Term Debt



September 30,	2018		2017
(Dollars in Thousands)
Long-term FHLB advances	$	—	$	—
Trust preferred securities	13,661		10,310
Subordinated debentures (net of issuance costs)	73,491		73,347
Long-term capital lease	1,811		1,876
Total	88,963		85,533

At September 30, 2018 and 2017, the Company had no long-term advances from the FHLB.

At September 30, 2018, the scheduled maturities of the Company's long-term debt were as follows for the years ending:



September 30,
(Dollars in Thousands)	Trust preferred securities		Subordinated debentures		Long-term capital lease		Total
2019	$	—	$	—	$	—	$	—
2020	—		—		73		73
2021	—		—		77		77
2022	—		—		82		82
2023	—		—		87		87
Thereafter	13,661		73,491		1,492		88,644
Total long-term debt	$	13,661	$	73,491	$	1,811	$	88,963

Certain trust preferred securities are due to First Midwest Financial Capital Trust I, a 100%-owned nonconsolidated subsidiary of the Company. The securities were issued in 2001 in conjunction with the Trust’s issuance of 10,000 shares of Trust Preferred Securities. The securities bear the same interest rate and terms as the trust preferred securities. The securities are included on the Consolidated Statements of Financial Condition as liabilities.

The Company issued all of the 10,310 authorized shares of trust preferred securities of First Midwest Financial Capital Trust I holding solely securities. Distributions are paid semi-annually. Cumulative cash distributions are calculated at a variable rate of London Interbank Offered Rate (“LIBOR”) plus 3.75% (6.35% at September 30, 2018, and 5.22% at September 30, 2017), not to exceed 12.5%. The Company may, at one or more times, defer interest payments on the capital securities for up to 10 consecutive semi-annual periods, but not beyond July 25, 2031. At the end of any deferral period, all accumulated and unpaid distributions are required to be paid. The capital securities are required to be redeemed on July 25, 2031; however, the Company has a semi-annual option to shorten the maturity date. The redemption price is $1,000 per capital security plus any accrued and unpaid distributions to the date of redemption.

Holders of the capital securities have no voting rights, are unsecured and rank junior in priority of payment to all of the Company’s indebtedness and senior to the Company’s common stock.

Although the securities issued by the Trust are not included as a component of stockholders’ equity, the securities are treated as capital for regulatory purposes, subject to certain limitations.

Through the Crestmark Acquisition, the Company acquired $3.4 million in floating rate capital securities due to Crestmark Capital Trust I, a 100%-owned nonconsolidated subsidiary of the Company. The subordinated debentures bear interest at LIBOR plus 3.00%, have a stated maturity of 30 years and are redeemable by the Company at par, with regulatory approval. The interest rate is reset quarterly at distribution dates in February, May, August, and November. The interest rate as of September 30, 2018 was 5.31%. The Company has the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years.

The Company completed the public offering of $75.0 million of 5.75% fixed-to-floating rate subordinated debentures during fiscal year 2016. These notes are due August 15, 2026. The subordinated debentures were sold at par, resulting in net proceeds of approximately $73.9 million. At September 30, 2018, the Company had $73.5 million in subordinated debentures, net of issuance costs of $1.5 million. Accumulated interest expense on the subordinated debentures was $8.6 million as of September 30, 2018.