NOTE H – OTHER BORROWED FUNDS

(DOLLARS IN THOUSANDS)

Maturities of other borrowings at December 31, 2014, and 2013, are summarized as follows:

	December 31,
	2014				2013
			Weighted-				Weighted-
			Average				Average
	Amount		Rate		Amount		Rate
	$		%		$		%

FHLB fixed rate loans
2014		—		—		6,500		2.32
2015		3,000		2.21		3,000		2.21
2016		15,500		1.93		13,000		2.16
2017		15,000		1.26		15,000		1.26
2018		11,650		1.22		5,000		0.94
2019		4,650		1.80		—		—

FHLB convertible loans
2014		—		—		5,000		4.44
2015		2,500		4.17		2,500		4.17

Repurchase agreements
2014		—		—		5,000		4.78
2015		10,000		4.37		10,000		4.37
Total other borrowings		62,300		2.12		65,000		2.67

As a member of the FHLB of Pittsburgh, the Corporation has access to significant credit facilities. Borrowings from FHLB are secured with a blanket security agreement and required investment in FHLB member bank stock. As part of the security agreement, the Corporation maintains unencumbered qualifying assets (principally 1-4 family residential mortgage loans) in an amount at least as much as the advances from the FHLB. Additionally, the Corporation's FHLB stock is pledged to secure these advances.

The Corporation had an FHLB maximum borrowing capacity of $258.6 million as of December 31, 2014, with remaining borrowing capacity of $196.3 million. The borrowing arrangement with the FHLB is subject to annual renewal. The maximum borrowing capacity is recalculated quarterly.

The terms of FHLB convertible borrowings allow the FHLB to convert the interest rate to an adjustable rate based on the three-month London Interbank Offering Rate (LIBOR). The rates on these instruments can change quarterly, once certain conditions or rate lockout periods are met. At the conversion date, the Corporation has the option of paying the borrowing off, or continuing to borrow under the new terms of the convertible borrowing. As of December 31, 2014 only one $2.5 million FHLB convertible advance remained that matures on July 27, 2015.

As of December 31, 2014, the Corporation had two securities sold under an agreement to repurchase, for $10.0 million, compared to three securities sold under an agreement to repurchase, for $15.0 million at December 31, 2013 and December 31, 2012. All of these repurchase agreements are accounted for as collateralized financing. The Corporation pledged securities with a fair market value of $12.2 million as of December 31, 2014, as collateral for these borrowings. All repurchase instruments have call features with different variable-to-fixed and fixed-to-variable rate provisions. A summary of repurchase agreements for the years ended December 31, 2014, 2013, and 2012 is as follows:

REPURCHASE AGREEMENTS

(DOLLARS IN THOUSANDS)


	2014			2013			2012
	$			$			$
Repurchase agreements outstanding at year end		10,000			15,000			15,000
Average interest rate at year end		4.37	%		4.50	%		4.50	%
Maximum outstanding at any month end		15,000			15,000			20,000
Average amount outstanding for the year		12,904			15,000			16,872
Weighted-average interest rate for the year		4.52	%		4.50	%		4.61	%

The Corporation uses repurchase agreements as a secondary source of funding after customer deposits as a way to mitigate interest rate risk and extend liability length. Management views repurchase agreements as a diversification of funding outside of the FHLB. No new repurchase agreements have been entered into since 2008. Both of the remaining repurchase agreements mature in 2015.