BORROWINGS

12 Months Ended

Dec. 31, 2020

BORROWINGS

BORROWINGS

NOTE 9 – BORROWINGS

For the years ending December 31, advances from the FHLB were as follows:

(dollars in thousands)	2020		2019
Federal Home Loan Bank of Indianapolis Advance, 1.61%, Due January 7, 2020	$	—	$	170,000
Federal Home Loan Bank of Indianapolis Putable Advance, 0.39%, Due March 4, 2030		75,000		—
Total	$	75,000	$	170,000

The outstanding FHLB advance at December 31, 2020 of $75.0 million is a fixed-rate putable advance and may not be prepaid by the Company without penalty. All FHLB notes require monthly interest payments and are secured by residential real estate loans and securities with a carrying value of $451.9 million and $453.2 million at December 31, 2020 and 2019, respectively. At December 31, 2020 and 2019, 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 $317.3 million based on collateral and outstanding borrowings. Federal Reserve Discount Window borrowings were secured by commercial loans and investment securities with a carrying value of $557.2 million and $446.9 million as of December 31, 2020 and 2019. The Company had a borrowing capacity of $490.4 million and $339.5 million at the Federal Reserve Bank as of December 31, 2020 and 2019, respectively. There were no borrowings outstanding at the Federal Reserve Bank at December 31, 2020 and 2019.

The Company had $350.0 million and $325.0 million of availability in federal funds lines with eleven and twelve correspondent banks as of December 31, 2020 and 2019, respectively; no amounts were drawn on as of either year-end. 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, 2020 and 2019, the total amount approved for the Bank via AFX banks was $394.0 million and $244.0 million, respectively. There were no amounts drawn as of December 31, 2020 and 2019.

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; this credit agreement was subsequently amended and renewed on July 31, 2020. 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. Outstanding borrowings on the credit agreement were $10.5 million and $0 at December 31, 2020 and 2019, respectively.

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)	2020			2019			2018
Securities sold under agreements to repurchase
Outstanding at year end	$	—		$	—		$	75,555
Approximate average interest rate at year end		—	%		—	%		0.74	%
Highest amount outstanding as of any month end during the year	$	—		$	72,814		$	106,239
Approximate average outstanding during the year		—			15,104			86,874
Approximate average interest rate during the year		—	%		0.86	%		0.58	%