FHLB Advances and Other Borrowings

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,
	2017		2016
Long-term Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	$	126,836	$	105,820
Junior Subordinated Debentures assumed from American Community Bancorp, Inc.	5,624		5,474
Junior Subordinated Debentures assumed from River Valley Bancorp, Inc.	5,607		5,501
Capital Lease Obligation	3,650		3,765
Long-term Borrowings	141,717		120,560

Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	$	92,000	$	91,500
Federal Funds Purchased	—		3,642
Repurchase Agreements	41,499		42,412
Short-term Borrowings	133,499		137,554

Total Borrowings	$	275,216	$	258,114

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.



	2017			2016
Average Daily Balance During the Year	$	40,476		$	33,317
Average Interest Rate During the Year	0.47		%	0.39		%
Maximum Month-end Balance During the Year	$	47,934		$	45,313
Weighted Average Interest Rate at Year-end	0.50		%	0.50		%

At December 31, 2017, interest rates on the fixed rate long-term FHLB advances ranged from 1.36% to 7.22% with a weighted average rate of 1.84%. At December 31, 2016 interest rates on the fixed rate long-term FHLB advances ranged from 0.92% to 7.22% with a weighted average rate of 1.67%. At December 31, 2017 and 2016, the Company had no advances containing options whereby the FHLB may convert a fixed rate advance to an adjustable rate advance.

At December 31, 2016, the parent company had a $20 million line of credit with no outstanding balance. The line of credit matured December 27, 2017. Interest on the line of credit is based upon 90-day LIBOR plus 2.875% and includes an unused commitment fee of 0.25%.

At December 31, 2017, scheduled principal payments on long-term FHLB Advances are as follows:



2018	$	40,210
2019	31,075
2020	25,551
2021	5,000
2022	—
Thereafter	25,000
Total	$	126,836

The Company assumed the obligations of junior subordinated debentures through the acquisitions of American Community Bancorp, Inc. and River Valley Bancorp. The junior subordinated debentures were issued to ACB Capital Trust I, ACB Capital Trust II and RIVR 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 and RIVR Statutory Trust I. Interest is payable on a quarterly basis. These securities qualify as Tier 1 capital (with certain limitations) for regulatory purposes. $11,060 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2017. $10,809 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2016. As a result of the acquisitions of American Community and River Valley 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.

The following table summarizes the terms of each issuance:



	Date of Issuance	Issuance Amount		Carrying Amount at December 31, 2017		Variable Rate	Rate as of December 31, 2017		Rate as of December 31, 2016		Maturity Date
ACB Trust I	5/6/2005	$	5,155	$	3,553	90 day LIBOR + 2.15%	3.84	%	3.15	%	May, 2035
ACB Trust II	7/15/2005	3,093		2,071		90 day LIBOR + 1.85%	3.30	%	2.77	%	July, 2035
RIVR Statutory Trust 1	3/26/2003	7,217		5,607		3-Month LIBOR + 3.15%	4.82	%	4.15	%	March, 2033

See also Note 5 regarding the capital lease obligation.

Deposits from principal officers, directors, and their affiliates at year-end 2017 and 2016 were $49.9 million and $48.2 million, respectively.