BORROWINGS

12 Months Ended

Dec. 31, 2019

BORROWINGS

BORROWINGS

NOTE 9 – BORROWINGS

For the years ending December 31, advances from the Federal Home Loan Bank were as follows:

(dollars in thousands)	2019		2018
Federal Home Loan Bank of Indianapolis Advance, 1.61%, Due January 7, 2020	$	170,000	$	0
Federal Home Loan Bank of Indianapolis Advance, 2.52%, Due January 7, 2019		0		170,000
Total	$	170,000	$	170,000

The outstanding FHLB advance at December 31, 2019 of $170.0 million is a fixed rate advance and may not be prepaid without penalty. All FHLB notes require monthly interest payments and are secured by residential real estate loans and securities with a carrying value of $453.2 million and $412.9 million at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, the Company owned $10.4 million of FHLB stock, which also secures debts owed to the FHLB. The Company is authorized by the Board to borrow up to $800.0 million at the FHLB, but availability is limited to $115.5 million based on collateral and outstanding borrowings. Federal Reserve Discount Window borrowings were secured by commercial loans with a carrying value of $446.9 million and $381.5 million as of December 31, 2019 and 2018. The Company had a borrowing capacity of $339.5 million and $286.5 million at the Federal Reserve Bank as of December 31, 2019 and 2018, respectively. There were no borrowings outstanding at the Federal Reserve Bank at December 31, 2019 and 2018.

The Company had $325.0 million of availability in federal funds lines with twelve correspondent banks, none of which was drawn on as of December 31, 2019 and 2018. The Bank is also a member of the American Financial Exchange (AFX) where overnight fed funds purchased can be obtained from other banks on the Exchange that have approved the Bank for an unsecured, overnight line. These funds are only available if the approving banks have an ‘offer’ out to sell that day. As of December 31, 2019 and 2018, the total amount approved for the Bank via AFX banks was $244.0 million and $119.0 million, respectively. There were no amounts drawn as of December 31, 2019 and 2018.

On August 2, 2019 the Company entered into an unsecured revolving credit agreement with another financial institution allowing the Company to borrow up to $30.0 million. Funds provided under the agreement may be used to repurchase shares of the Company’s common stock under the share repurchase program, which was reauthorized by the Company’s board of directors on January 14, 2020. The credit agreement includes a negative pledge agreement whereby the Company agrees not to pledge or otherwise encumber the stock of the Bank. The credit agreement has a one year term which may be amended, extended, modified or renewed. There was no amount drawn on the line as of December 31, 2019.

NOTE 9 – BORROWINGS (continued)

Securities sold under agreements to repurchase (“repo accounts”) represent collateralized borrowings with customers located primarily within the Company’s service area. The Bank discontinued offering this product in early 2019. All repo accounts at December 31, 2018 matured on demand. Repo accounts are not covered by federal deposit insurance and are secured by securities owned.

The following is a schedule, at the end of the year indicated, of statistical information relating to securities sold under agreement to repurchase secured by either U.S. government agency securities or mortgage-backed securities classified as securities available-for-sale. There were no other categories of short-term borrowings for which the average balance outstanding during the period was 30 percent or more of stockholders' equity at the end of each period.

(dollars in thousands)	2019			2018			2017
Securities sold under agreements to repurchase
Outstanding at year end	$	0		$	75,555		$	70,652
Approximate average interest rate at year end		0.00	%		0.74	%		0.46	%
Highest amount outstanding as of any month end during the year	$	72,814		$	106,239		$	77,886
Approximate average outstanding during the year		15,104			86,874			63,379
Approximate average interest rate during the year		0.86	%		0.58	%		0.39	%