SUBORDINATED DEBENTURES

12 Months Ended

Dec. 31, 2014

NOTE 13 — SUBORDINATED DEBENTURES

The Company formed four separate trusts in 2002, 2003, and 2006 that issued floating rate trust preferred securities as part of pooled offerings. The Company issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole asset of the trusts. In the first quarter of 2014, the Company redeemed one trust it had acquired in a prior acquisition — Harrodsburg Statutory Trust I. In accordance with accounting guidelines, the trusts are not consolidated with the Company's financial statements, but rather the subordinated debentures are shown as a liability, because the Company is not considered the primary beneficiary of the trusts. The Company's investment in the common stock of the trusts was $1,239 at December 31, 2014 and $1,394 at December 31, 2013 and is included in interest receivable and other assets on the consolidated balance sheets. Interest payments are payable quarterly in arrears and the Company has the option to defer interest payments from time to time for a period not to exceed 20 consecutive quarters. The subordinated debentures mature in 30 years from issuance and can be called anytime after five years at par. The subordinated debentures may be included in Tier 1 capital (with certain limitations) under current regulatory guidelines and interpretations. The following table summarizes the other terms of each issuance.

Trust Name	Issuance		Amount December 31, 2014		Amount December 31, 2013		Variable Rate			Rate as of 12/31/14			Maturity

Trust 1		2002	$	8,248	$	8,248		LIBOR +3.25	%		3.50	%		2032
Trust 2		2003		14,433		14,433		LIBOR +3.25	%		3.51	%		2033
Trust 3		2003		7,217		7,217		LIBOR +3.15	%		3.39	%		2033
Trust 4		2006		11,341		11,341		LIBOR +1.63	%		1.87	%		2036
Harrodsburg		2003		—		5,155		LIBOR +3.15	%		—			—

			$	41,239	$	46,394