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FHLB Advances and Other Borrowings
 12 Months Ended
Dec. 31, 2022
Advance from Federal Home Loan Bank [Abstract]  
FHLB Advances and Other Borrowings 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,
 20222021
PrincipalUnamortized Discount and Debt Issuance CostsPrincipalUnamortized Discount and Debt Issuance Costs
Long-term Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities$25,000 $— $25,000 $— 
Junior Subordinated Debentures assumed from American Community Bancorp, Inc.8,248 (1,873)8,248 (2,023)
Junior Subordinated Debentures assumed from River Valley Bancorp, Inc.7,217 (1,082)7,217 (1,188)
Junior Subordinated Debentures assumed from Citizens First Corporation5,155 (919)5,155 (984)
Junior Subordinated Debentures assumed from Citizens Union Bancorp of Shelbyville, Inc.20,600 (2,020)— — 
Subordinated Debentures40,000 (538)40,000 (621)
Finance Lease Obligation2,857 — 3,051 — 
Long-term Borrowings109,077 (6,432)88,671 (4,816)
Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities25,000 — — — 
Federal Funds Purchased11,200 — — — 
Repurchase Agreements64,961 — 68,328 — 
Short-term Borrowings101,161 — 68,328 — 
Total Borrowings$210,238 $(6,432)$156,999 $(4,816)

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. 
 20222021
Average Daily Balance During the Year$52,932 $52,824 
Average Interest Rate During the Year0.20 %0.10 %
Maximum Month-end Balance During the Year$72,084 $71,764 
Weighted Average Interest Rate at Year-end0.57 %0.10 %
 
At December 31, 2022 and 2021, the Company held one long-term FHLB advance with an interest rate of 1.54%. At December 31, 2022 and 2021, the Company had no advances containing options whereby the FHLB may convert a fixed rate advance to an adjustable rate advance.

At December 31, 2022 and 2021, the Company had outstanding $39,462 and $39,379, respectively, in aggregate principal amount, of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Notes”). The Notes bear interest at a fixed annual rate of 4.50% until but excluding June 30, 2024, payable semi-annually in arrears. The indenture for the Notes provides that, from and including June 30, 2024 to but excluding the maturity date of June 30, 2029, 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. However, in anticipation of LIBOR being discontinued, the indenture also provided for an alternate rate being used when a successor reference rate had been selected by a central bank, reserve bank, monetary authority or any similar institution. As the Secured Overnight Financing Rate (“SOFR”) has been identified as the preferred alternate rate by the Alternative Reference Rates Committee, a U.S.-based group convened by the Federal Reserve Board and the Federal Reserve Bank of New York, and the Federal Reserve subsequently adopted final regulations that, among other things, established LIBOR benchmark replacements based on SOFR under certain circumstances, the Company anticipates that, on June 30, 2024, the quarterly interest on the Notes will be based upon the CME Term SOFR, as the replacement benchmark, including a static spread adjustment for the appropriate tenor as provided by the Federal Reserve regulations, plus the 268 basis points referenced above. See Replacement of LIBOR Benchmark below for additional information.

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, 2022, the parent company had a $15 million line of credit with U.S. Bank National Association, which had no outstanding balance. The line of credit matures September 26, 2023. Interest on the line of credit is based upon one-month Term SOFR plus 1.85%.

At December 31, 2022, scheduled principal payments on long-term borrowings, excluding the capitalized lease obligation and acquired subordinated debentures (which are discussed below) are as follows:
2023$— 
202425,000 
2025— 
2026— 
2027— 
Thereafter39,462 
Total$64,462 
 
The Company assumed the obligations of junior subordinated debentures through the acquisitions of American Community Bancorp, Inc., River Valley Bancorp, Citizens First Corporation and Citizens Union Bancorp of Shelbyville, Inc. The junior subordinated debentures were issued to ACB Capital Trust I, ACB Capital Trust II, RIVR Statutory Trust I, Citizens First Statutory Trust I, CUB Capital Trust I and CUB Capital Trust II. 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 the various trusts. Interest is payable on a quarterly basis. These securities qualify as Tier 1 capital (with certain limitations) for regulatory purposes. $34,378 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2022. $16,081 of the junior subordinated debentures were treated as Tier 1 capital for regulatory
capital purposes as of December 31, 2021. As a result of the acquisitions, 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, 2022		Variable RateRate as of
December 31, 2022		Rate as of
December 31, 2021		Maturity
Date
ACB Trust I5/6/2005$5,155 $4,013 
90 day LIBOR + 2.15%
6.90 %2.37 %May 2035
ACB Trust II7/15/20053,093 2,362 
90 day LIBOR + 1.85%
6.54 %2.01 %July 2035
RIVR Statutory Trust I3/26/20037,217 6,135 
3-Month LIBOR + 3.15%
7.87 %3.37 %March 2033
Citizens First Statutory Trust I10/16/20065,155 4,236 
3-Month LIBOR +1.65%
5.39 %1.78 %January 2037
CUB Capital Trust I10/21/200410,310 9,593 
3-Month LIBOR +2.00%
6.69 %N/ANovember 2034
CUB Capital Trust II8/17/200510,310 8,987 
3-Month LIBOR +1.50%
5.58 %N/AOctober 2035

Replacement of LIBOR Benchmark:

On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was signed into law in response to the U.K. Financial Conduct Authority, the authority regulating LIBOR, announcing that, among other things, the 1-month, 3-month, 6-month and 12-month U.S. dollar LIBOR settings would cease to exist after June 30, 2023. The LIBOR Act establishes a uniform national approach for replacing LIBOR in legacy contracts that do not provide for the use of a clearly defined replacement benchmark rate. As directed by the LIBOR Act, on December 16, 2022, the Federal Reserve issued a final rule setting forth regulations to implement the LIBOR Act, including establishing benchmark replacements based on SOFR for contracts governed by U.S. law that reference certain tenors of U.S. dollar LIBOR (the overnight and one-, three-, six-, and 12-month tenors) and that do not have terms that provide for the use of a clearly defined and practicable replacement benchmark rate (“fallback provisions”) following the first London banking day after June 30, 2023.

As the junior subordinated debentures discussed above do not have LIBOR fallback provisions, after June 30, 2023, the interest paid on those debentures will be based upon the CME Term SOFR, as the replacement benchmark, including a static spread adjustment for the appropriate tenor, as provided by the LIBOR Act and related Federal Reserve regulations. The relevant spread adjustment for a three-month tenor is 0.26161 percent.