The Company’s funding sources include Federal Home Loan Bank advances, borrowings from other third party correspondent financial institutions, issuance and sale of subordinated debt and other capital securities, and repurchase agreements. Information regarding each of these types of borrowings or other indebtedness is as follows:



	December 31,
	2019		2018
Long-term Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	$	123,573	$	86,626
Term Loans	—		25,000
Junior Subordinated Debentures assumed from American Community Bancorp, Inc.	5,924		5,775
Junior Subordinated Debentures assumed from River Valley Bancorp, Inc.	5,818		5,712
Junior Subordinated Debentures assumed from Citizens First Corporation	4,040		—
Subordinated Debentures	39,214		—
Finance Lease Obligation	3,381		3,522
Long-term Borrowings	181,950		126,635

Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	$	124,000	$	195,000
Federal Funds Purchased	4,311		9,500
Repurchase Agreements	39,425		45,274
Promissory Notes Payable	—		—
Short-term Borrowings	167,736		249,774

Total Borrowings	$	349,686	$	376,409

Repurchase agreements, which are classified as secured borrowings, generally mature within one day of the transaction date. Repurchase agreements are reflected at the amount of cash received in connection with the transaction. The Company may be required to provide additional collateral based on the value of the underlying securities.



	2019			2018
Average Daily Balance During the Year	$	35,916		$	38,454
Average Interest Rate During the Year	0.56		%	0.55		%
Maximum Month-end Balance During the Year	$	39,425		$	45,274
Weighted Average Interest Rate at Year-end	0.57		%	0.63		%

At December 31, 2019, interest rates on the fixed rate long-term FHLB advances ranged from 1.54% to 7.22% with a weighted average rate of 1.95%. At December 31, 2018 interest rates on the fixed rate long-term FHLB advances ranged from 1.54% to 7.22% with a weighted average rate of 1.75%. At December 31, 2019 and 2018, the Company had no advances containing options whereby the FHLB may convert a fixed rate advance to an adjustable rate advance.

On June 25, 2019, the Company entered into Subordinated Note Purchase Agreements (collectively, the “Purchase Agreement”) with certain qualified institutional buyers and institutional accredited investors (the “Purchasers”) pursuant to which the Company sold and issued $40.0 million in aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Notes”). The Notes were offered and sold by the Company to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Company used the proceeds from the offering to pay $15.0 million of the approximately $15.5 million of cash consideration upon closing of the Citizens First Corporation merger and the remaining balance to repay the Company’s $25.0 million term loan from U.S. Bank National Association ("U.S. Bank") dated October 11, 2018.

The Notes have a ten-year term, from and including the date of issuance to but excluding June 30, 2024, and will bear interest at a fixed annual rate of 4.50%, payable semi-annually in arrears. From and including June 30, 2024 to but excluding the maturity date or early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then-current three-month LIBOR (provided, however, that in the event three-month LIBOR is less than zero, three-month LIBOR shall be deemed to be zero) plus 268 basis points, payable quarterly in arrears. The Notes are redeemable, in whole or in part, on June 30, 2024, on any scheduled interest payment date thereafter and at any time upon the occurrence of certain events. The Purchase Agreement contains certain customary representations, warranties and covenants made by the Company, on the one hand, and the Purchasers, severally and not jointly, on the other hand.

On June 25, 2019, in connection with the sale and issuance of the Notes, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Purchasers. Pursuant to the Registration Rights Agreement, the Company completed on November 4, 2019, an offer to exchange its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2029, which were registered under the Securities Act of 1933, as amended, for any and all of the outstanding Notes, with beneficial owners holding an aggregate principal amount of $36.5 million electing to participate in the exchange.

The Notes, including the registered exchange notes, were issued under an Indenture, dated June 25, 2019 (the “Indenture”), by and between the Company and U.S. Bank National Association, as trustee. The Notes are not subject to any sinking fund and are not convertible into or exchangeable for any other securities or assets of the Company or any of its subsidiaries. The Notes are not subject to redemption at the option of the holder. The Notes are unsecured, subordinated obligations of the Company only and are not obligations of, and are not guaranteed by, any subsidiary of the Company. The Notes rank junior in right to payment to the Company’s current and future senior indebtedness. The Notes are intended to qualify as Tier 2 capital for regulatory capital purposes for the Company.

At December 31, 2018, the long-term borrowings shown above included $25 million outstanding on the U.S. Bank term loan discussed above. At December 31, 2018, interest on the term loan was 5.24%, which was based upon U.S. Bank's cost of funds, plus 1.75%.

At December 31, 2019, the parent company had a $15 million line of credit with no outstanding balance. The line of credit matures September 28, 2020. Interest on the line of credit is based upon one-month LIBOR plus 1.75% and includes an unused commitment fee of 0.25%.

At December 31, 2019, scheduled principal payments on long-term borrowings, excluding the capitalized lease obligation and acquired subordinated debentures (which are discussed below) are as follows:

The Company assumed the obligations of junior subordinated debentures through the acquisitions of American Community Bancorp, Inc., River Valley Bancorp and Citizens First Corporation. The junior subordinated debentures were issued to ACB Capital Trust I, ACB Capital Trust II, RIVR Statutory Trust I, and Citizens First Statutory Trust I. The trusts are wholly owned by the Company. In accordance with accounting guidelines, the trusts are not consolidated with the Company's financials, but rather the subordinated debentures are shown as borrowings. The Company guarantees payment of distributions on the trust preferred securities issued by ACB Trust I, ACB Trust II, RIVR Statutory Trust I, and Citizens First Statutory Trust I. Interest is

payable on a quarterly basis. These securities qualify as Tier 1 capital (with certain limitations) for regulatory purposes. $15,447 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2019. $11,311 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2018. As a result of the acquisitions of American Community, River Valley, and Citizens First these liabilities were recorded at fair value at the acquisition date with the discount amortizing into interest expense over the life of the liability, ultimately accreting to the issuance amount disclosed below.



	Date of Issuance	Issuance Amount		Carrying Amount at December 31, 2019		Variable Rate	Rate as of December 31, 2019		Rate as of December 31, 2018		Maturity Date
ACB Trust I	5/6/2005	$	5,155	$	3,737	90 day LIBOR + 2.15%	4.09	%	4.95	%	May, 2035
ACB Trust II	7/15/2005	3,093		2,187		90 day LIBOR + 1.85%	3.76	%	4.50	%	July, 2035
RIVR Statutory Trust 1	3/26/2003	7,217		5,818		3-Month LIBOR + 3.15%	5.10	%	5.97	%	March, 2033
Citizens First Statutory Trust I	10/16/2006	5,155		4,040		3-Month LIBOR + 1.65%	3.75	%	N/A		January, 2037