Trustmark utilizes securities sold under repurchase agreements as a source of borrowing in connection with overnight repurchase agreements offered to commercial deposit customers by using its unencumbered investment securities as collateral. Trustmark accounts for its securities sold under repurchase agreements as secured borrowings in accordance with FASB ASC Topic 860-30, “Transfers and Servicing – Secured Borrowing and Collateral.” Securities sold under repurchase agreements are stated at the amount of cash received in connection with the transaction. Trustmark monitors collateral levels on a continual basis and may be required to provide additional collateral based on the fair value of the underlying securities. Securities sold under repurchase agreements are secured by securities with a carrying amount of $163.3 million and $200.9 million at December 31, 2018 and 2017, respectively. As of December 31, 2018, all repurchase agreements were short-term and consisted primarily of sweep repurchase arrangements, under which excess deposits are “swept” into overnight repurchase agreements with Trustmark. The following table presents the securities sold under repurchase agreements by collateral pledged at December 31, 2018 and 2017 ($ in thousands):

	December 31,
	2018		2017
Mortgage-backed securities
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA	$	6,721	$	68,246
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA		38,788		50,448
Total securities sold under repurchase agreements	$	45,509	$	118,694

At December 31, 2018 and 2017, short-term borrowings consisted of the following ($ in thousands):

	December 31,
	2018		2017
FHLB advances	$	—	$	900,013
Serviced GNMA loans eligible for repurchase		61,564		48,211
Other		17,442		22,825
Total short-term borrowings	$	79,006	$	971,049

At December 31, 2018, Trustmark had no outstanding short-term FHLB advances. Trustmark had four outstanding short-term FHLB advances totaling $900.0 million with the FHLB of Dallas at December 31, 2017. Two of these outstanding advances with the FHLB of Dallas had fixed interest rates of 1.44% and 1.48% and balances of $250.0 million and $150.0 million, respectively. At December 31, 2017, these two fixed rate advances had a weighted-average remaining maturity of 58 days with a weighted-average cost of 1.45% during 2017. At December 31, 2017, Trustmark had two outstanding short-term FHLB advance with a balance of $250.0 million each with the FHLB of Dallas that repriced on a monthly basis. Trustmark paid off the outstanding short-term advance due to mature on May 25, 2018 in full on March 2, 2018. For the remaining outstanding short-term FHLB advance, Trustmark paid off $125.0 million on May 4, 2018 with the remaining balance of $125.0 million maturing on October 19, 2018.

At December 31, 2018 and 2017, Trustmark had $2.827 billion and $1.771 billion, respectively, available in additional short and long-term borrowing capacity from the FHLB of Dallas.

At December 31, 2018, Trustmark had no outstanding short-term advances with the FHLB of Atlanta compared to one outstanding short-term FHLB advance with the FHLB of Atlanta, which was assumed through the BancTrust merger, at December 31, 2017. The short-term FHLB advance outstanding at December 31, 2017 had a balance of $13 thousand with a fixed interest rate of 6.12% and a remaining maturity of 72 days. Trustmark has a non-member status and no additional borrowing capacity with the FHLB of Atlanta.

Interest expense on short-term FHLB advances totaled $4.4 million in 2018, $11.4 million in 2017 and $1.8 million in 2016.

At December 31, 2018 and 2017, Trustmark had no outstanding long-term FHLB advances with the FHLB of Dallas.

At December 31, 2018, Trustmark had two outstanding long-term FHLB advances totaling $879 thousand with the FHLB of Atlanta, compared to two outstanding long-term FHLB advances totaling $946 thousand with the FHLB of Atlanta at December 31, 2017. Both of these advances were assumed through the BancTrust merger. The advances outstanding had fixed interest rates of 0.08% and 0.75% with outstanding balances of $153 thousand and $726 thousand at December 31, 2018 and $171 thousand and $775 thousand at December 31, 2017. At December 31, 2018, these advances had a weighted-average remaining maturity of 3.41 years with a weighted-average cost of 0.63% during 2018. At December 31, 2017, the outstanding long-term advances had a weighted-average remaining maturity of 4.44 years with a weighted-average cost of 0.63% during 2017. There was no fair market value adjustment associated with the BancTrust merger included in the long-term FHLB advances at December 31, 2018 and 2017. Trustmark’s long-term FHLB advances are collateralized by securities held in safekeeping with the FHLB of Atlanta.

Trustmark incurred $6 thousand of interest expense on long-term FHLB advances in 2018, compared to $566 thousand of interest expense in 2017 and $2.1 million of interest expense in 2016.

On August 18, 2006, Trustmark completed a private placement of $60.0 million of trust preferred securities through a newly formed Delaware trust affiliate, Trustmark Preferred Capital Trust I (the Trust). The trust preferred securities mature September 30, 2036, are redeemable at Trustmark’s option and bear interest at a variable rate per annum equal to the three-month LIBOR plus 1.72%. Under applicable regulatory guidelines, these trust preferred securities qualify as Tier 1 capital. The proceeds from the sale of the trust preferred securities were used by the Trust to purchase $61.9 million in aggregate principal amount of Trustmark’s junior subordinated debentures.

The debentures were issued pursuant to a Junior Subordinated Indenture, dated August 18, 2006, between Trustmark, as issuer, and Wilmington Trust Company, National Association, as trustee. Like the trust preferred securities, the debentures bear interest at a variable rate per annum equal to the three-month LIBOR plus 1.72% and mature on September 30, 2036. The debentures may be redeemed at Trustmark’s option at any time. The interest payments by Trustmark will be used to pay the quarterly distributions payable by the Trust to the holder of the trust preferred securities. However, so long as no event of default has occurred under the debentures, Trustmark may defer interest payments on the debentures (in which case the Trust will also defer distributions otherwise due on the trust preferred securities) for up to 20 consecutive quarters.

The debentures are subordinated to the prior payment of any other indebtedness of Trustmark that, by its terms, is not similarly subordinated. The trust preferred securities are recorded as a long-term liability on Trustmark’s balance sheet; however, for regulatory purposes the trust preferred securities are treated as Tier 1 capital under the rules of the FRB, Trustmark’s primary federal regulatory agency.

Trustmark also entered into a Guarantee Agreement, dated August 18, 2006, pursuant to which it has agreed to guarantee the payment by the Trust of distributions on the trust preferred securities and the payment of principal of the trust preferred securities when due, either at maturity or on redemption, but only if and to the extent that the Trust fails to pay distributions on or principal of the trust preferred securities after having received interest payments or principal payments on the junior subordinated debentures from Trustmark for the purpose of paying those distributions or the principal amount of the trust preferred securities.

As defined in applicable accounting standards, the Trust, a wholly-owned subsidiary of Trustmark, is considered a variable interest entity for which Trustmark is not the primary beneficiary. Accordingly, the accounts of the Trust are not included in Trustmark’s consolidated financial statements.

At December 31, 2018 and 2017, assets for the Trust totaled $61.9 million, resulting from the investment in junior subordinated debentures issued by Trustmark. Liabilities and shareholder’s equity for the Trust also totaled $61.9 million at December 31, 2018 and 2017, resulting from the issuance of trust preferred securities in the amount of $60.0 million as well as $1.9 million in common securities issued to Trustmark. During 2018, net income for the Trust equaled $74 thousand resulting from interest income from the junior subordinated debt securities issued by Trustmark to the Trust, compared with net income of $55 thousand during 2017 and $45 thousand during 2016. Dividends issued to Trustmark by the Trust during 2018 totaled $74 thousand, compared to $55 thousand during 2017 and $45 thousand during 2016.