NOTE 7 – BORROWINGS

Federal Home Loan Bank Advances

Pursuant to collateral agreements with the Federal Home Loan Bank of Pittsburgh (the “FHLB”), advances are secured by qualifying first mortgage loans, qualifying fixed-income securities, FHLB stock and an interest-bearing demand deposit account with the FHLB. As of March 31, 2013, the Bank had $199.5 million in qualifying collateral pledged against its advances.

Maturity Date	Amount		Coupon Rate	Call Date	Rate if Called
(In thousands, Unaudited)

August 2014	$	10,000	0.52%	Not Applicable	Not Applicable
September 2014	15,000		0.41%	Not Applicable	Not Applicable
December 2014	15,000		0.43%	Not Applicable	Not Applicable
March 2015	10,000		0.49%	Not Applicable	Not Applicable
April 2015	10,000		0.45%	Not Applicable	Not Applicable
August 2015	10,000		0.68%	Not Applicable	Not Applicable
March 2016	10,000		0.62%	Not Applicable	Not Applicable
September 2016	5,000		0.75%	Not Applicable	Not Applicable
June 2017	5,000		0.94%	Not Applicable	Not Applicable
November 2017	15,000		3.62%	May 2013	LIBOR + 0.10%
November 2017	15,000		3.87%	May 2013	LIBOR + 0.10%
December 2017	20,000		2.83%	June 2013	LIBOR + 0.11%
	$	140,000	1.55%

For the borrowings which have a “Call Date” disclosed in the above table, if the borrowing is called, the Bank has the option to either pay off the borrowing without penalty or the borrowing’s fixed rate resets to a variable LIBOR based rate, as noted in the above table. Subsequent to the call date, the borrowings are callable by the FHLB quarterly. Accordingly, the contractual maturities above may differ from actual maturities.

The Bank had a maximum borrowing capacity with the FHLB of Pittsburgh of approximately $381.5 million at March 31, 2013. Additionally, as of March 31, 2013, the Bank has a maximum borrowing capacity of $52.7 million with the Federal Reserve Bank of Philadelphia through the Discount Window.

As a member of the FHLB of Pittsburgh, the Bank is required to acquire and hold shares of capital stock in the FHLB of Pittsburgh in an amount equal to at least 4.60% of its advances plus 0.35% of the Bank’s “eligible assets,” as such term is defined by the FHLB; and a maximum amount of 6.00% of its advances plus 1.0% of the Bank’s “eligible assets.” The FHLB also indicated that it may increase its individual member stock investment requirements. As of March 31, 2013, the Company’s minimum stock obligation was $8.7 million and a maximum stock obligation was $14.7 million. The Company held $9.7 million in FHLB stock at that date.

Other Borrowed Funds

Other borrowed funds obtained from large commercial banks under security repurchase agreements totaled $30.0 million at March 31, 2013. These borrowings contractually mature with dates ranging from September 2018 through November 2018 and may be called by the lender based on the underlying agreements. Accordingly, the contractual maturities below may differ from actual maturities.

				Next	Subsequent
Maturity Date	Amount		Coupon Rate	Call Date	Call Frequency
(In thousands, Unaudited)

September 2018	$	10,000	3.40%	Not Applicable	Not Applicable
September 2018	5,000		3.20%	Not Applicable	Not Applicable
October 2018	5,000		3.15%	April 2013	Quarterly
October 2018	5,000		3.27%	Not Applicable	Not Applicable
November 2018	5,000		3.37%	November 2013	Not Applicable
	$	30,000	3.30%

Mortgage backed securities with a fair value of $40.8 million at March 31, 2013 were used to secure these other borrowed funds.

Short Term Borrowings

As of March 31, 2013 and December 31, 2012, the Company had $29.7 million and $70.5 million, respectively, of short-term borrowings. The short-term borrowings at March 31, 2013 and December 31, 2012, respectively, had blended weighted average rates of 0.26% and 0.30%. Short-term borrowings consist of overnight and term borrowings with an original maturity less than one year. Short-term borrowings are obtained from commercial banks, participants in the Federal Funds market and the FHLB.