BORROWINGS

The following table summarizes the Corporation's borrowings as of December 31, 2015 and 2014:



	December 31, 2015		December 31, 2014
Federal funds purchased	$	49,721	$	15,381
Securities sold under repurchase agreements	155,325		124,539
Federal Home Loan Bank advances	235,652		145,264
Subordinated debentures and term loans	127,846		126,810
Total Borrowings	$	568,544	$	411,994

Securities sold under repurchase agreements consist of obligations of the Bank to other parties. The obligations are secured by U.S. Treasury and U.S. Government-Sponsored Enterprise obligations, certain municipal securities and mortgage loans. The maximum amount of outstanding agreements at any month-end during 2015 and 2014 totaled $163,128,000 and $155,941,000, respectively, and the average of such agreements totaled $143,491,000 and $130,910,000 during 2015 and 2014, respectively.

Maturities of borrowings as of December 31, 2015, are as follows:



Maturities in Years Ending December 31:	Federal Funds Purchased		Securities Sold Under Repurchase Agreements		Federal Home Loan Bank Advances		Subordinated Debentures and Term Loans
2016	$	49,721	$	155,325	$	91,441	$	183
2017					37,222
2018					26,851
2019					13,828
2020					31,310
After 2020					35,000		132,012
ASC 805 fair value adjustments at acquisition							(4,349		)
	$	49,721	$	155,325	$	235,652	$	127,846

The terms of a security agreement with the FHLB require the Corporation to pledge, as collateral for advances, qualifying first mortgage loans, investment securities and multi-family loans in an amount equal to at least 146 percent of these advances depending on the type of collateral pledged. Advances, with interest rates from 0 to 6.81 percent, are subject to restrictions or penalties in the event of prepayment. The total available remaining borrowing capacity from the FHLB at December 31, 2015, was $388,176,000. As of December 31, 2015, the Corporation had $25,000,000 putable advances with the FHLB. Additionally as part of the Ameriana acquisition on December 31, 2015, the Corporation assumed approximately $24,938,000 of Federal Home Loan Bank Advances. The C Financial acquisition on April 17, 2015 resulted in an additional $18,958,000 of Federal Home Loan Bank advances at acquisition, of which approximately $7,361,000 matured during 2015 and $11,597,000 remained at December 31, 2015.

Subordinated Debentures and Term Loans. As of December 31, 2015, subordinated debentures and term loans totaled $127,846,000.

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First Merchants Capital Trust II. The subordinated debenture was entered into on July 2, 2007 for $56,702,000. On August 10, 2015, the Corporation completed the cancellation of $5 million of subordinated debentures at a gain of $1,250,000. As of December 31, 2015, $51,702,000 of subordinated debentures remain outstanding with a maturity date of September 15, 2037. The Corporation could not redeem the debenture prior to September 15, 2012, and redemption is subject to the prior approval of the Board of Governors of the Federal Reserve System, as required by law or regulation. Interest was fixed at 6.495 percent for the period from the date of issuance through September 15, 2012; interest is now an annual floating rate equal to the three-month LIBOR plus 1.56 percent, reset quarterly. Interest is payable in March, June, September and December of each year. The interest rate at December 31, 2015 was 2.1 percent. The Corporation holds all of the outstanding common securities of First Merchants Capital Trust II.

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Ameriana Capital Trust I. On December 31, 2015 the Corporation acquired Ameriana Capital Trust I in conjunction with its acquisition of Ameriana Bancorp, Inc. The subordinated debentures of Ameriana Capital Trust I were entered into in March 2007 for $10,310,000 and have a maturity of March 2036. The interest rate is equal to the three-month LIBOR plus 1.50 percent, reset quarterly. Interest is payable in March, June, September and December of each year. The interest rate at December 31, 2015 was 2.0 percent. The Corporation holds all of the outstanding common securities of Ameriana Capital Trust I.

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On November 1, 2013, the Corporation completed the private issuance and sale to four institutional investors of an aggregate of $70 million of debt comprised of (a) 5.00 percent Fixed-to-Floating Rate Senior Notes due 2028 in the aggregate principal amount of $5 million (the "Senior Debt") and (b) 6.75 percent Fixed-to-Floating Rate Subordinated Notes due 2028 in the aggregate principal amount of $65 million (the "Subordinated Debt"). The interest rate on the Senior Debt and Subordinated Debt remains fixed for the first ten (10) years and will become floating thereafter. The Senior Debt agreement contains certain customary representations and warranties and financial and negative covenants. As of December 31, 2015, the Corporation was in compliance with these covenants.

Line of Credit. As of December 31, 2015, there was no outstanding balance on the line of credit.

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U.S. Bank, N.A. On April 11, 2014, the Corporation entered into a line of credit agreement with U.S. Bank, N.A. with a maximum borrowing capacity of $20 million. As of December 31, 2015, there was no outstanding balance on the line of credit. Interest is payable quarterly based on one-month LIBOR plus 2.00 percent. The line of credit has a quarterly facility fee of 0.25 percent on the unused balance. The line of credit agreement contains certain customary representations and warranties and financial and negative covenants. As of December 31, 2015, the Corporation was in compliance with these covenants. The line of credit was renewed on April 9, 2015 and will mature on April 8, 2016.

Subordinated Debentures and Term Loans. As of December 31, 2014, subordinated debentures and term loans totaled $126,810,000.

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First Merchants Capital Trust II. The subordinated debenture, entered into on July 2, 2007, for $56,702,000 will mature on September 15, 2037. The Corporation could not redeem the debenture prior to September 15, 2012, and redemption is subject to the prior approval of the Board of Governors of the Federal Reserve System, as required by law or regulation. Interest was fixed at 6.495 percent for the period from the date of issuance through September 15, 2012; interest is now an annual floating rate equal to the three-month LIBOR plus 1.56 percent, reset quarterly. Interest is payable in March, June, September and December of each year. The interest rate at December 31, 2014 was 1.8 percent. The Corporation holds all of the outstanding common securities of First Merchants Capital Trust II.

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On November 1, 2013, the Corporation completed the private issuance and sale to four institutional investors of an aggregate of $70 million of debt comprised of (a) 5.00 percent Fixed-to-Floating Rate Senior Notes due 2028 in the aggregate principal amount of $5 million (the "Senior Debt") and (b) 6.75 percent Fixed-to-Floating Rate Subordinated Notes due 2028 in the aggregate principal amount of $65 million (the "Subordinated Debt"). The interest rate on the Senior Debt and Subordinated Debt remains fixed for the first ten (10) years and will become floating thereafter. The Senior Debt agreement contains certain customary representations and warranties and financial and negative covenants. As of December 31, 2014, the Corporation was in compliance with these covenants. The net proceeds of the placement were used to pay off the Corporation's $55 million credit facility with Bank of America, N.A. which was scheduled to mature on February 15, 2015.

Line of Credit. As of December 31, 2014, there was no outstanding balance on the line of credit.

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U. S. Bank, N.A. On April 11, 2014, the Corporation entered into a line of credit agreement with the U. S. Bank, N.A. with a maximum borrowing capacity of $20 million. As of December 31, 2014, there was no outstanding balance on the line of credit. Interest is payable quarterly based on one-month LIBOR plus 2.00 percent. The line of credit has a quarterly facility fee of 0.25 percent on the unused balance. The maturity date for the line of credit is April 10, 2015. The line of credit agreement contains certain customary representations and warranties and financial and negative covenants. As of December 31, 2014, the Corporation was in compliance with these covenants.