BORROWED FUNDS

Borrowed funds are summarized as follows:



	December 31,
	2012				2011
	Amount		Weighted- Average Contractual Rate		Amount		Weighted- Average Contractual Rate
	(Dollars in thousands)
Advances from FHLB of Indianapolis:
Fixed rate advances due in:
2013	$	15,000	2.22	%	$	15,000	2.22	%
2014 (1)	1,038		6.71		1,069		6.71
2015	15,000		1.42		15,000		1.42
2018 (1)	2,360		5.54		2,439		5.54
2019 (1)	6,111		6.29		6,358		6.29
Total FHLB advances	39,509		2.86		39,866		2.89
Short-term variable-rate borrowed funds – Repo Sweep accounts	11,053		.10		14,334		.20
Total borrowed funds	$	50,562	2.26		$	54,200	2.18


(1)	These are amortizing advances and are listed by their contractual final maturity date.

Required principal payments of FHLB of Indianapolis advances are as follows:



	(Dollars in thousands)
Year Ended December 31:
2013	$	15,381
2014	1,380
2015	15,400
2016	428
2017	458
Thereafter	6,462
	$	39,509

Pursuant to collateral agreements, FHLB of Indianapolis advances are secured by the following assets:



Description of Collateral	Amount Pledged
	(Dollars in thousands)
FHLB of Indianapolis stock	$	6,188
Loans secured by residential first mortgage loans	156,011
Loans secured by commercial first mortgage loans	87,705
	$	249,904

Repo Sweeps are treated as financings; the obligation to repurchase investment securities sold is reflected as short-term borrowed funds. The investment securities underlying these Repo Sweeps continue to be reflected as assets of the Company in the consolidated statements of financial condition. The average amount of Repo Sweeps outstanding during the years ended December 31, 2012 and 2011 was $11.6 million and $15.0 million, respectively, and the weighted-average rate paid was .15% and .38%, respectively. The maximum amount of Repo Sweeps outstanding during the years ended December 31, 2012 and 2011 was $15.3 million and $19.6 million, respectively. The Repo Sweeps mature daily.

Interest expense on borrowed funds totaled $1.2 million, $1.1 million, and $1.8 million for the years ended December 31, 2012, 2011, and 2010, respectively.

At December 31, 2012 and 2011, the Bank had a line of credit with a large commercial bank with a maximum of $15.0 million in secured overnight federal funds availability at the federal funds market rate at the time of any borrowing. This line was not utilized during 2012 or 2011.

The Bank also has a borrowing relationship with the FRB discount window. This line was not utilized during 2012 or 2011.

Pursuant to the Company’s informal regulatory agreement with the FRB, the parent company is prohibited from incurring or issuing any debt, increasing any current lines of credit, or guaranteeing the debt of any entity, without prior approval from the FRB.