Borrowings:

Borrowings include securities sold under agreements to repurchase, lines of credit, Federal Home Loans Bank advances, and subordinated debt.

Securities sold under agreements to repurchase and federal funds purchased

Securities sold under agreements to repurchase are financing arrangements that mature daily. Securities sold under agreements to repurchase are secured by mortgage-backed securities with a carrying amount of $15,081and $14,293 at December 31, 2018 and 2017, respectively.

Information concerning securities sold under agreements to repurchase is summarized as follows:



	2018			2017
Balance at year end	$	15,081		$	14,293
Average daily balance during the year	16,128			16,326
Average interest rate during the year	0.28		%	0.17		%
Maximum month-end balance during the year	19,651			19,432
Weighted average interest rate at year-end	0.74		%	0.16		%

The Bank maintains lines with certain correspondent banks that provide borrowing capacity in the form of federal funds purchased in the aggregate amount of $240,000, of which there were no borrowings against as of December 31, 2018.

Federal Home Loan Bank Advances

As a member of the FHLB Cincinnati, the Bank receives advances from the FHLB pursuant to the terms of various agreements that assist in funding its mortgage and loan portfolio production. Under these agreements, the Company pledged qualifying loans of $1,227,711 as collateral securing a line with a total line of credit with a total borrowing capacity of $736,962 as of December 31, 2018. As of December 31, 2017, the Company pledged qualifying loans of $968,567 as collateral securing a line of credit with a total borrowing capacity of $671,461. In 2018, a letter of credit with the FHLB of $100,000 was pledged at December 31, 2018 to secure public funds that required collateral. Additionally, during 2018 a line of $800,000 has been secured with the FHLB for overnight borrowing; however, additional collateral may be needed to draw on the line.

Borrowings against our line totaled $181,765 and $302,372 as of December 31, 2018 and December 31, 2017, respectively. Total borrowings as of December 31, 2018 comprised $1,765 in long term advances, $80,000 in overnight cash management advances (CMAs) and $100,000 in 90 day fixed rate advances borrowed during 2017 as part of a funding strategy for the Clayton Banks merger. During 2017, the Company also entered into three corresponding interest rate swaps to hedge interest rate exposure which mature in 2020, 2021, and 2022 in increments of $30,000, $35,000, and $35,000, respectively. For more information about our derivative financial instruments, see Note 16, “Derivatives.” Total borrowings as of December 31, 2017 comprised $12,372 in long term advances, $190,000 in CMAs and $100,000 in 90 day fixed rate advances. FHLB advances includes both fixed and floating rates ranging from 2.43% to 7.78% at December 31, 2018. The weighted average interest rate on outstanding advances at December 31, 2018 was 1.93%.

Maturities of FHLB advances as of December 31, 2018 are as follows:



	FHLB advances
Due on or before:
December 31, 2019	$	180,060
December 31, December 31, 2020	59
December 31, December 31, 2021	283
December 31, December 31, 2022	692
December 31, December 31, 2023	124
Due thereafter	547
Total	$	181,765

The Company maintained a line with the Federal Reserve Bank through the Borrower-in-Custody program in 2018 and 2017. As of December 31, 2018 and 2017, $1,336,092 and $737,856 of qualifying loans and $8,569 and $13,544 of investment securities were pledged to the Federal Reserve Bank through the Borrower-in-Custody program securing a line of credit of $934,745 and $529,547, respectively.

Subordinated Debt

In 2003, two separate trusts formed by the Company issued $9,000 of floating rate trust preferred securities (“Trust I”) and $21,000 of floating rate trust preferred securities (“Trust II”), respectively, as part of a pooled offering of such securities. The Company issued junior subordinated debentures of $9,280, which included proceeds of common securities purchased by the Company of $280, and junior subordinated debentures of $21,650, which included proceeds of common securities of $650. Both issuances were to the trusts in exchange for the proceeds of the securities offerings, which represent the sole asset of the trusts. Trust I pays interest quarterly based upon the 3-month LIBOR plus 3.25%. Trust II pays interest quarterly based upon the 3-month LIBOR plus 3.15%. Rates for the two issues at December 31, 2018, were 5.65% and 5.97%, respectively. Rates for the two issues at December 31, 2017, were 4.59% and 4.82%, respectively. The Company may redeem the first junior subordinated debenture listed, in whole or in part, on any distribution payment date within 120 days of the occurrence of a special event, at the redemption price. The Company may redeem the second junior subordinated debentures listed, in whole or in part, any time after June 26, 2008, on any distribution payment date, at the redemption price. The junior subordinated debentures must be redeemed no later than 2033.

The Company has classified $30,000 of subordinated debt described in the above paragraph as Tier 1 capital. The Federal Reserve Board issued guidance in March 2005 providing more strict quantitative limits on the amount of securities, similar to the junior subordinated debentures issued or assumed by the Company, that are includable in Tier 1 capital. The new guidance, which became effective in March 2009, did not impact the amount of debentures the Company includes in Tier 1 capital. Furthermore, the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act have no effect on the treatment of this subordinated debt as Tier 1 capital while the Company remains below $15,000,000 in assets.