NOTE 9 – 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 March 31, 2017 and December 31, 2016, there were $525.7 million and $492.3 million, respectively, in outstanding other borrowings.

Other borrowings consist of the following:

(dollars in thousands)	March 31, 2017		December 31, 2016
FHLB borrowings:
Advance from FHLB due April 6, 2017; fixed interest rate of 0.71%	$	445,000	$	-
Advance from FHLB due May 30, 2017; fixed interest rate of 1.23%		5,002		5,006
Daily Rate Credit from FHLB with a variable interest rate (0.80% at December 31, 2016)		-		150,000
Advance from FHLB due January 6, 2017; fixed interest rate of 0.56%		-		292,500
Advance from FHLB due January 9, 2017; fixed interest rate of 1.40%		-		4,002
Subordinated notes payable:
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $1,245; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%		73,755		-
Other debt:
Advance from correspondent bank due October 5, 2019; secured by a loan receivable; fixed interest rate of 4.25%		70		77
Advance from correspondent bank due September 5, 2026; secured by a loan receivable; fixed interest rate of 2.09%		1,842		1,886
Advances under revolving credit agreement with a regional bank due September 26, 2017; secured by subsidiary bank stock; variable interest rate at 90-day LIBOR plus 3.50% (4.43% at December 31, 2016)		-		38,000
Advances under revolving credit agreement with a regional bank due January 7, 2017; fixed interest rate of 8.00%		-		850
Total	$	525,669	$	492,321

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 March 31, 2017, $766.4 million was available for borrowing on lines with the FHLB.

At March 31, 2017, $60.0 million was available for borrowing under the revolving credit agreement with a regional bank, secured by subsidiary bank stock.

As of March 31, 2017, the Company maintained credit arrangements with various financial institutions to purchase federal funds up to $82.0 million.

The Company also participates in the Federal Reserve discount window borrowings program. At March 31, 2017, the Company had $907.8 million of loans pledged at the Federal Reserve discount window and had $594.7 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.