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Note 11 - Other Borrowings and Unused Lines of Credit | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Debt Disclosure [Text Block] | Note 11. Other Borrowings and Unused Lines of Credit Other borrowings as of December 31, 2017 and 2016 are summarized as follows:
|  | 2017 |  |  | 2016 |
Wholesale structured repurchase agreements |  | $ | 35,000,000 |  |  | $ | 45,000,000 |
Term notes |  |  | 31,000,000 |  |  |  | 30,000,000 |
Revolving line of credit |  |  | - |  |  |  | 5,000,000 |
|  | $ | 66,000,000 |  |  | $ | 80,000,000 |
The Company ’s wholesale structured repurchase agreements are collateralized by investment securities with carrying values as follows:
|  | 2017 |  |  | 2016 |
U.S. govt. sponsored agency securities |  | $ | 3,474,555 |  |  | $ | 20,798,703 |
Residential mortgage-backed and related securities |  |  | 61,528,167 |  |  |  | 31,321,028 |
Total securities pledged to wholesale customer repurchase agreements |  |  | 65,002,722 |  |  |  | 52,119,731 |
Less: overcollateralized position |  |  | 30,002,722 |  |  |  | 7,119,731 |
|  | $ | 35,000,000 |  |  | $ | 45,000,000 |
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 those restructurings is summarized in the following table for the year ended December 31, 2016:
2016 |
Date of Restructuring |  | Amount |  |  | Weighted Average Interest Rate |  | Range of Maturity Dates |  | Prepayment 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 2017 or 2016. Maturity and interest rate information concerning wholesale structured repurchase agreements is summarized as follows:
|  | December 31, 2017 |  | December 31, 2016 |
|  |  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  |  | Average |  |  |  |  |  | Average |
|  |  |  |  |  | Interest Rate |  |  |  |  |  | Interest Rate |
|  | Amount Due |  |  | at Year-End |  | Amount Due |  |  | at Year-End |
Maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Year ending December 31: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2017 |  | $ | - |  |  |  | - |  |  | $ | 10,000,000 |  |  | 3.00 | % |
2019 |  |  | 10,000,000 |  |  |  | 3.44 |  |  |  | 10,000,000 |  |  | 3.44 |  |
2020 |  |  | 25,000,000 |  |  |  | 2.48 |  |  |  | 25,000,000 |  |  | 2.48 |  |
Total Wholesale Structured Repurchase Agreements |  | $ | 35,000,000 |  |  |  | 2.76 | % |  | $ | 45,000,000 |  |  | 2.81 | % |
The Company has two term note s. The first is a term note with a maturity date of December 31, 2021. The outstanding balance on the term note totals $24.0 million and $30.0 million at December 31, 2017 and 2016, respectively. Interest on the term note is calculated at the effective LIBOR rate plus 3.00% per annum ( 4.56% and 3.77% at December 31, 2017 and 2016, respectively). The second is a $7.0 million term note originated in the third quarter of 2017 with a maturity date of December 31, 2021 and interest calculated at the effective LIBOR rate plus 3.00% per annum ( 4.56% at December 31, 2017). 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 subsidiaries. The Company has a $10.0 million revolving line of credit note available for which there is no outstanding balance as of December 31, 2017. If used, interest on the revolving line of credit is calculated at the effective LIBOR rate plus 2.50% per annum ( 4.06% at December 31, 2017). The collateral on the revolving line of credit is the original stock certificates and stock powers of all subsidiaries. For the term note s, the Company is required to make quarterly principal payments of $1,937,500 with maturity information as of December 31, 2017, summarized as follows:
|  | As of December 31, 2017 |
2018 |  | $ | 7,750,000 |
2019 |  |  | 7,750,000 |
2020 |  |  | 7,750,000 |
2021 |  |  | 7,750,000 |
|  | $ | 31,000,000 |
Unused lines of credit of the subsidiary banks as of December 31, 2017 and 2016 are summarized as follows:
|  | 2017 |  |  | 2016 |
Secured |  | $ | 2,967,441 |  |  | $ | 34,409,192 |
Unsecured |  |  | 372,000,000 |  |  |  | 347,000,000 |
|  | $ | 374,967,441 |  |  | $ | 381,409,192 |
T he Company pledges the eligible portion of its municipal securities portfolio and select C&I and CRE loans to the Federal Reserve Bank of Chicago for borrowing at the Discount Window .

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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