Long-term securities sold under agreements to repurchase and other borrowings represent borrowings with an original maturity of greater than year. The table below displays a summary of the ending balance and average rate for borrowed funds on the dates indicated.

 

Long-term FHLB advances are made pursuant to several different credit programs, which have their own interest rates and range of maturities. At interest rates on all FHLB advances are fixed and range between and averaging over a remaining weighted average maturity period of

years. At interest rates on FHLB advances ranged between and averaging over a remaining weighted average maturity period of years. Long-term FHLB borrowings of million at year-end and were callable quarterly. None of the long-term FHLB advances are convertible to a floating interest rate.

For FHLB advances, the subsidiary banks pledge FHLB stock and certain qualifying mortgage loans as collateral

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Pledged loans consist primarily of fully disbursed, otherwise unencumbered, - family mortgage loans. Based on this collateral and the Company’s holdings of FHLB stock, the Company is eligible to borrow up to an additional million from the FHLB at year-end

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During the Company completed private offerings of trust preferred securities through separate Delaware statutory trusts sponsored by the Company. Farmers Capital Bank Trust I (“Trust I”) sold million of preferred securities and Farmers Capital Bank Trust II (“Trust II”) sold 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 and are redeemable at any time by the Trust at par.

 

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

and recorded a pretax gain of million. The Company became aware that all 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 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 million.

 

Farmers Capital Bank Trust III (“Trust III”), a Delaware statutory trust sponsored by the Company, was formed during Trust III sold 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 and are redeemable at any time by the Trust at par. Trust I, Trust II, 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 and respectively, and bear a floating interest rate (current -month LIBOR plus basis points in the case of the notes held by Trust I and current -month LIBOR plus 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 be deferred for consecutive quarterly periods. There have been no 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 the balance of the subordinated notes payable to Trust I and Trust III was million and million, respectively. At the balance of the subordinated notes payable to Trust I, Trust II, and Trust III was million, million, and million, respectively. The interest rates in effect as of the last determination date for were and for Trust I and Trust III, respectively. For these rates were and for Trust I Trust II, 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, 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 be included in Tier capital, subject to restrictions. At year-end and the Company’s Tier capital included million and million, respectively, which represents the full amount of the subordinated notes net of the Company’s investment in the Trusts at those dates.

 

The Company entered into a balance sheet leverage transaction in whereby it borrowed million in multiple fixed rate term repurchase agreements with an initial weighted average cost of and invested the proceeds in Government National Mortgage Association (“GNMA”) bonds, which were pledged as collateral. During the Company prepaid the remaining balance of million on the repurchase agreements, which were due to mature in

 

The Company has million of other long-term repurchase agreements outstanding at made in the ordinary course of business with commercial customers. The average interest rate related to these fixed rate borrowings is

 

Maturities of long-term borrowings at are as follows:

 

Securities sold under agreements to repurchase represent transactions where the Company sells certain of its investment securities and agrees to repurchase them at a specific date in the future. Securities sold under agreements to repurchase are accounted for as secured borrowing and reflect the amount of cash received in connection with the transaction.

 

Securities sold under agreements to repurchase are collateralized by U.S. government agency securities, primarily mortgage-backed securities. The Company be required to provide additional collateral securing the borrowings in the event of principal pay downs or a decrease in the market value of the pledged securities. The Company mitigates this risk by monitoring the market value and liquidity of the collateral and ensuring that it holds a sufficient level of eligible securities to cover potential increases in collateral requirements.

 

The following table represents the remaining maturity of both short and long-term repurchase agreements disaggregated by the class of securities pledged.