Note 11: Borrowings

Borrowings were comprised of the following at December 31, 2019 and 2018:


	December 31,
	2019		2018
	(In thousands)
Lines of credit	$	6,540	$	33,150
Short-term subordinated debt		12,200		10,582
FHLB advances		162,699		151,721
Total borrowings	$	181,439	$	195,453

The Company has a revolving line of credit (“LOC”) with the FHLB. This arrangement has a maximum borrowing limit of collateral pledged, with an outstanding balance at both December 31, 2019 and 2018 of $6.5 million and $8.2 million, respectively. The floating interest rate on the LOC is set daily at a fixed spread to the actual Federal Funds rate earned by the FHLB, or 1.77% at December 31, 2019 and 2.61% at December 31, 2018. The LOC is automatically renewed daily, unless either party notifies the other of its desire not to continue the arrangement.

During 2019 the Company also paid off a LOC with a bank for up to $25.0 million and allowed it to expire in August of 2019. The LOC had an outstanding balance at both December 31, 2018 of $25.0 million. The interest rate on the note was LIBOR Rate plus 1.85%, or 4.2%, at December 31, 2018. The LOC was collateralized by a pledge and first lien security interest in and to all of the issued and outstanding common stock of Merchants Bank of Indiana, the 100% owned subsidiary of the Company. The agreement also required Merchants Bank to maintain at all times a Tier 1 leverage ratio of not less than 8% and was tested on a quarterly basis.

The Company entered into a warehouse financing arrangement in April 24, 2018, whereby a customer agreed to invest up to $30 million in the Company’s subordinated debt. The subordinated debt balance as of December 31, 2019 and 2018 was $12.2 million and $10.6 million, respectively. Interest on the debt is paid quarterly by the Company at a rate equal to one-month LIBOR, plus 350 basis points, plus additional interest equal to 50% of the earnings generated. The agreement is automatically renewed annually on April 24th, unless either party notifies the other party at least 180 days prior to its renewable date, of its desire not to continue the relationship.

FHLB advances and the LOC are secured by mortgage loans totaling $1.4 billion and $88.1 million at, December 31, 2019 and 2018, respectively. In addition, available for sale securities and securities purchased under agreements to resell with a carrying value of $276.7 million and $269.3. million were pledged as of December 31, 2019 and 2018, respectively. At December 31, 2019, the FHLB advances had interest rates ranging from 1.58% to 4.74%, and at December 31, 2018, the FHLB advances had interest rates ranging from 1.79% to 4.74%, and were subject to restrictions or penalties in the event of prepayment.

Maturities of FHLB advances were as follows December 31, 2019:


	December 31,
	2019
	(In thousands)
Due within one year	$	145,589
Due in one year to two years		15,077
Due in two years to three years		59
Due in three years to four years		342
Due in four years to five years		61
Thereafter		1,571
	$	162,699

At December 31, 2019, the Company has excess borrowing capacity with the FHLB for approximately $425.0 million based on currently owned FHLB stock and $1.5 billion based on current collateral.