OTHER BORROWINGS

The Company has, from time to time, utilized certain borrowing arrangements to fund growth in earning assets or provide additional liquidity when appropriate spreads can be realized. At September 30, 2018 and December 31, 2017, there were $656.8 million and $250.6 million, respectively, in outstanding other borrowings.

Other borrowings consist of the following:



(dollars in thousands)	September 30, 2018		December 31, 2017
FHLB borrowings:
Daily Rate Credit with a variable interest rate (1.59% at December 31, 2017)	$	—	$	25,000
Fixed Rate Advance due October 10, 2018; fixed interest rate of 2.13%	250,000		—
Fixed Rate Advance due October 17, 2018; fixed interest rate of 2.17%	250,000		—
Fixed Rate Hybrid Advance due November 6, 2018; fixed interest rate of 2.727%	5,000		—
Convertible Flipper Advance due May 22, 2019; current interest rate of 4.68%	1,500		—
Principal Reducing Advance due June 20, 2019; fixed interest rate of 1.274%	750		—
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	1,300		—
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	900		—
Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%	1,885		—
Fixed Rate Advance due January 8, 2018; fixed interest rate of 1.39%	—		150,000
Subordinated notes payable:
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $1,107 and $1,205, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%	73,893		73,795
Other debt:
Advance from correspondent bank due October 5, 2019; secured by a loan receivable; fixed interest rate of 4.25%	28		49
Advance from correspondent bank due September 5, 2026; secured by a loan receivable; fixed interest rate of 2.09%	1,575		1,710
Advances under revolving credit agreement with a regional bank due September 26, 2020; secured by subsidiary bank stock; variable interest rate at 90-day LIBOR plus 3.50% (5.82% at September 30, 2018)	70,000		—
Total	$	656,831	$	250,554

The advances from the FHLB are collateralized by a blanket lien on all first mortgage loans and other specific loans in addition to FHLB stock. At September 30, 2018, $1.50 billion was available for borrowing on lines with the FHLB.

At September 30, 2018, the Company had a revolving credit arrangement with a regional bank with a maximum line amount of $100.0 million. This line of credit is secured by subsidiary bank stock, expires on September 26, 2020, and bears a variable interest rate of 90-day LIBOR plus 3.50%. At September 30, 2018, there was $30.0 million available for borrowing under the revolving credit arrangement.

As of September 30, 2018, the Bank maintained credit arrangements with various financial institutions to purchase federal funds up to $117.0 million.

The Bank also participates in the Federal Reserve discount window borrowings program. At September 30, 2018, the Company had $1.30 billion of loans pledged at the Federal Reserve discount window and had $859.3 million available for borrowing.

Subordinated Notes Payable

On March 13, 2017, the Company completed the public offering and sale of $75.0 million in aggregate principal amount of its 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027 (the “subordinated notes”). The subordinated notes were sold to the public at par pursuant to an underwriting agreement and were issued pursuant to an indenture and a supplemental indenture. The subordinated notes will mature on March 15, 2027 and through March 14, 2022 will bear a fixed rate of interest of 5.75% per annum, payable semi-annually in arrears on September 15 and March 15 of each year. Beginning March 15, 2022, the interest rate on the subordinated notes resets quarterly to a floating rate per annum equal to the then-current three-month LIBOR plus 3.616%, payable quarterly in arrears on June 15, September 15, December 15, and March 15 of each year to the maturity date or earlier redemption.

On any scheduled interest payment date beginning March 15, 2022, the Company may, at its option, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest.

The subordinated notes are unsecured and rank equally with all other unsecured subordinated indebtedness of the Company, including any subordinated indebtedness issued in the future under the indenture governing the subordinated notes. The subordinated notes are subordinated in right of payment to all senior indebtedness of the Company. The subordinated notes are obligations of the Company only and are not guaranteed by any subsidiaries, including the Bank. Additionally, the subordinated notes are structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries, meaning that creditors of the Company’s subsidiaries (including, in the case of the Bank, its depositors) generally will be paid from those subsidiaries’ assets before holders of the subordinated notes have any claim to those assets.

For regulatory capital adequacy purposes, the subordinated notes qualify as Tier 2 capital for the Company. If in the future the subordinated notes no longer qualify as Tier 2 capital, the subordinated notes may be redeemed by the Company at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, subject to prior approval by the Board of Governors of the Federal Reserve System.