Other Borrowings

12 Months Ended

Dec. 31, 2014

Note 13: Other Borrowings

Other borrowings consisted of the following components as of December 31:



	2014		2013
Note payable	$	6,071	$	6,830
Subordinated debenture		4,103		4,060
Total	$	10,174	$	10,890

The Company borrowed $7,589,000 from First Tennessee Bank, N.A. at a variable rate of LIBOR plus 2.80%, with principal and interest payments made quarterly. Company also has an interest rate swap that fixed the variable rate portion of this loan for the term of the note at 3.92%. The loan is collateralized by the Bank’s stock and matures in December 2017.

The maturity of the First Tennessee note is as follows:



Principal Payments Due in Years Ending December 31:
2015	$	759
2016		759
2017		4,553
	$	6,071

The Company assumed $5,000,000 in debentures as the result of an acquisition of MFB Corp. in 2008. In 2005, MFB Corp. had formed MFBC Statutory Trust (MFBC), as a wholly owned business trust, to sell trust preferred securities. The proceeds from the sale of these trust preferred securities were used by the trust to purchase an equivalent amount of subordinated debentures from the acquired company. The junior subordinated debentures are the sole assets of MFBC and are fully and unconditionally guaranteed by the Company. The junior subordinated debentures and the trust preferred securities pay interest and dividends, respectively, on a quarterly basis. The securities bore a fixed rate of interest of 6.22% for the first five years, and the rate resets quarterly at the prevailing three-month LIBOR rate plus 170 basis points. In 2009, the Company entered into a forward interest rate swap that fixed the variable rate portion for five years at 5.15% expiring in September 2015. The effect of the interest rate swap is not material to the financial statements and has been determined to be 100% effective. Accordingly, the impact of the cash flow hedge is recorded, net of tax, in other comprehensive income. The Company may redeem the trust preferred securities, in whole or in part, without penalty, on or after September 15, 2010. These securities mature on September 15, 2035. The net balance of the note as of December 31, 2014 was $4,103,000 due to the fair value adjustment of the note made at the time of the acquisition.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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