SHORT-TERM BORROWINGS AND FEDERAL HOME LOAN BANK ADVANCES

9 Months Ended

Sep. 30, 2014

SHORT-TERM BORROWINGS AND FEDERAL HOME LOAN BANK ADVANCES [Abstract]

SHORT-TERM BORROWINGS AND FEDERAL HOME LOAN BANK ADVANCES

NOTE 6 – SHORT-TERM BORROWINGS AND FEDERAL HOME LOAN BANK ADVANCES

As of September 30, 2014 and December 31, 2013, advances from the FHLB were as follows:

(Dollars in thousands)	September 30, 2014		December 31, 2013
Overnight advances maturing daily at a daily variable interest rate of 0.36% on September 30, 2014	$	-	$	-
Advances maturing July 15, 2014 at a fixed rate of 2.42%		-		2,500
Advance maturing January 9, 2015 at a fixed rate of 0.88%		4,000		4,000
Advances maturing March 2, 2015 at a fixed rate of 0.76%		2,000		2,000
Advances maturing July 15, 2016 at a fixed rate of 2.81%		2,500		2,500
Advances maturing January 9, 2017 at a fixed rate of 1.40%		4,000		4,000
Advances maturing May 30, 2017 at a fixed rate of 1.23%		5,000		5,000
Total advances from the FHLB	$	17,500	$	20,000

Each advance is payable at its maturity date, with a prepayment penalty for early termination. The advances are collateralized by a blanket lien arrangement on the Company’s first mortgage loans, second mortgage loans and commercial real estate loans. Based upon this collateral and the Company’s holdings of FHLB stock, the Company was eligible to borrow up to a total of $43,864 as of September 30, 2014 and had borrowed $17,500, leaving $26,364 available. As of December 31, 2013, the Company was eligible to borrow up to a total of $26,716 and had borrowed $20,000, leaving $6,716 available as of the same date.

The Company also has a “Borrower in Custody” line of credit with the Federal Reserve by pledging collateral. The amount of this line as of September 30, 2014 and December 31, 2013 was $22,480 and $24,875, respectively, all of which was available as of the respective dates.

- 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.

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