Borrowings

The Company has a maximum line of credit with the FHLB approximating 35% of eligible assets. FHLB advances are subject to collateral criteria that require the Company to pledge assets under a blanket pledge arrangement as collateral for its borrowings from the FHLB. Based on assets currently pledged and advances currently outstanding at December 31, 2015, the Company's available borrowing line is $189.5 million, representing approximately 13% of total assets. Additional advances of up to 35% of eligible assets, or $524.8 million, are dependent on the availability of acceptable collateral such as marketable securities or real estate loans, although all FHLB advances are secured by a blanket pledge of the Company’s assets. The Company has an outstanding FHLB CIP advance of $2.1 million and $2.2 million as of December 31, 2015 and 2014, respectively, that was originated on March 22, 2013 and is included in long term borrowings. This advance was originated to match fund a loan to one borrower for the construction of a low income housing project that qualifies for a long term fixed interest rate; it has an eighteen year term with a 30 year amortization period, which mirrors the term of the term real estate loan made to the borrower.

The Federal Reserve Bank is holding $81.0 million of loans as collateral to secure available borrowing lines through the discount window of $40.2 million at December 31, 2015. There were no discount window advances outstanding at December 31, 2015 and 2014. The Company paid less than $1,000 in 2015 and 2014 in interest on this agreement.

RML has a warehouse line of credit with a correspondent bank which is secured by eligible loans held for sale. The line of credit contains restrictive covenants on net worth requirements, debt-to-net worth ratios, distributions to members, transactions with affiliates, liquidity requirements, capital expenditures, and interest coverage. The outstanding balance of this line was zero and $24.1 million at December 31, 2015 and December 31, 2014, respectively. The loan matures on August 10, 2016 and has a floating interest rate of 2.625% over LIBOR with a floor of 2.875%. The loan had an interest rate of 3.063% and 2.875% at December 31, 2015 and 2014, respectively.

The Company is subject to further regulatory standards issued by the State of Alaska which limit the amount of outstanding debt to 15% of total assets or $224.9 million and $217.4 million at December 31, 2015 and 2014, respectively.

Securities sold under agreements to repurchase were $31.4 million and $19.8 million, respectively, for December 31, 2015 and 2014. The Company was paying an average rate of 0.10% and 0.08% on these agreements at December 31, 2015 and 2014, respectively. The average balance outstanding of securities sold under agreement to repurchase during 2015 and 2014 was $23.7 million and $20.1 million, respectively, and the maximum outstanding at any month-end was $37.1 million and $22.4 million, respectively, during the same time periods. The securities sold under agreement to repurchase are held by the Federal Home Loan Bank under the Company’s control.

The future principal payments that are required on the Company’s borrowings as of December 31, 2015, are as follows:



(In Thousands)
2016		$31,466
2017	48
2018	50
2019	52
2020	54
Thereafter	1,870
Total		$33,540

The Company recognized interest expense of $469,000, $184,000, and $340,000 in 2015, 2014, and 2013, respectively. The average interest rates paid on long-term debt in the same periods was 2.52%, 3.51%, and 5.13%, respectively.