Note 11. Other Borrowings and Unused Lines of Credit

Other borrowings as of December 31, 2018 and 2017 are summarized as follows:


	2018		2017
Wholesale structured repurchase agreements	$	35,000,000	$	35,000,000
Term notes		23,250,000		31,000,000
Subordinated debentures		4,782,318		—
Revolving line of credit		9,000,000		—
	$	72,032,318	$	66,000,000

The Company’s wholesale structured repurchase agreements are collateralized by investment securities with carrying values as follows:


	2018		2017
Residential mortgage-backed and related securities	$	38,870,228	$	40,503,002
Total securities pledged to wholesale customer repurchase agreements		38,870,228		40,503,002
Less: overcollateralized position		3,870,228		5,503,002
	$	35,000,000	$	35,000,000

Inherent in the wholesale structured repurchase agreements is a risk that the fair value of the collateral pledged on the agreements could decline below the amount obligated under the agreements. The Company considers this risk minimal. The Company maintains an overcollateralized position that is sufficient to cover any minor interest rate movements.

Throughout 2016, the Company executed several balance sheet restructuring strategies in an effort to reduce reliance on wholesale funding. These strategies will continue to be evaluated in the future. A summary of prepayments of wholesale structured repurchase agreements related to these restructurings is summarized in the following table for the year ended December 31, 2016.


	2016
			Weighted		Range of
			Average		Maturity		Prepayment
Date of Restructuring	Amount		Interest Rate		Dates		Fees
First Quarter of 2016	$	10,000,000	3.97	%	July 2018	$	759,000
Third Quarter of 2016		55,000,000	3.27	%	February 2019 to September 2020		4,010,000
Total for 2016	$	65,000,000	3.38	%		$	4,769,000

All prepayment fees shown in the table above are included in losses on debt extinguishment in the statements of income. There were no material modifications of borrowings during 2018 or 2017.

Maturity and interest rate information concerning wholesale structured repurchase agreements is summarized as follows:


	December 31, 2018				December 31, 2017
			Weighted				Weighted
			Average				Average
			Interest Rate				Interest Rate
	Amount Due		at Year-End		Amount Due		at Year-End
Maturity:
Year ending December 31:
2019	$	10,000,000	3.59	%	$	10,000,000	3.44	%
2020		25,000,000	2.48			25,000,000	2.48
Total Wholesale Structured Repurchase Agreements	$	35,000,000	2.80	%	$	35,000,000	2.76	%

Note 11. Other Borrowings and Unused Lines of Credit (continued)

The Company has two term notes. The first is a term note with a maturity date of December 31, 2021. The outstanding balance on the term note totals $18.0 million and $24.0 million at December 31, 2018 and 2017, respectively. Interest on the term note is calculated at the effective LIBOR rate plus 3.00% per annum (5.52% and 4.56% at December 31, 2018 and 2017, respectively). The proceeds from this note were used to fund a portion of the cash consideration for the acquisition of CSB. The second is a term note originated in the third quarter of 2017 with a maturity date of December 31, 2021 and a balance outstanding of $5.3 million and $7.0 million at December 31, 2018 and 2017, respectively. Interest is calculated at the effective LIBOR rate plus 3.00% per annum (5.52% and 4.56% at December 31, 2018 and 2017, respectively). The proceeds from this note were used to fund a portion of the cash consideration for the acquisition of Guaranty Bank. The collateral on both borrowings is the original stock certificates and stock powers of all bank subsidiaries.

For the term notes, the Company is required to make quarterly principal payments of $1,937,500 with maturity information as of December 31, 2018, summarized as follows:


	As of December 31, 2018
2019	$	7,750,000
2020		7,750,000
2021		7,750,000
	$	23,250,000

As part of the merger with Springfield Bancshares, the Company assumed two subordinated debentures with a fair value of $4.8 million. Maturity and interest rate information concerning the subordinated debentures is summarized as follows:


	Amount Outstanding	Interest Rate
	as of December 31, 2018	as of December 31, 2018		Maturity Date

Subordinated debenture dated 4/30/16	$ 2,000,000	4.00	%	4/30/2026
Subordinated debenture dated 9/15/16	3,000,000	4.00	%	9/15/2026
Market Value Discount per ASC 805	(217,682)
Total Subordinated Debentures	$ 4,782,318

The interest rate on the subordinated debentures is fixed for the first five years of the term and then converts to floating for the remaining term, at a rate of Prime floating daily. The debentures may be called after a minimum of five years following issuance and at the prior approval of the appropriate regulatory agencies. The subordinated debentures are unsecured.

The Company has a $10.0 million revolving line of credit note for which the outstanding balance is $9.0 million as of December 31, 2018. Interest on the revolving line of credit is calculated at the effective LIBOR rate plus 2.50% per annum (5.02% at December 31, 2018). The collateral on the revolving line of credit is the original stock certificates and stock powers of all bank subsidiaries.

In February 2019, the Company completed a subordinated notes offering, a portion of the proceeds of which were used to pay off outstanding term notes and the revolving line of credit. See Note 23 of the Consolidated Financial Statements for further information on this subsequent event.

Note 11. Other Borrowings and Unused Lines of Credit (continued)

Unused lines of credit of the subsidiary banks as of December 31, 2018 and 2017 are summarized as follows:


	2018		2017
Secured	$	1,690,108	$	2,967,441
Unsecured		362,000,000		372,000,000
	$	363,690,108	$	374,967,441

The Company pledges select C&I and CRE loans to the Federal Reserve Bank of Chicago for borrowing at the Discount Window.