Borrowings

9 Months Ended

Sep. 30, 2012

Borrowings and Regulatory Capital [Abstract]

Borrowings

Note 5. Borrowings

The Bank periodically borrows from the FHLB of Dallas. At September 30, 2012, the Bank had a total of eleven such advances which totaled $24,290. These advances have various maturities ranging from October 12, 2012 through September 6, 2018 at interest rates from 0.17% to 1.96%. At December 31, 2011, the Bank had a total of eleven such advances which totaled $25,978. These advances have various maturities ranging from January 27, 2012 through November 17, 2014 at interest rates from 0.14% to 3.09%.

These advances are secured by FHLB of Dallas stock, real estate loans and securities of $127,319 and $121,640, at September 30, 2012 and December 31, 2011, respectively. The Bank had remaining credit available under the FHLB advance program of $102,696 and $95,529 at September 30, 2012 and December 31, 2011, respectively.

During the third quarter of 2012, the Bank prepaid $6,123 of advances from the FHLB maturing in years 2013 through 2014, with a weighted-average rate of 3.46% and an average remaining term of 1.29 years. These borrowings were replaced with $6,123 of new advances from the FHLB maturing in years 2015 through 2018, with a weighted-average rate of 2.40% and an average remaining term of 4.02 years.

The Bank paid $325 of prepayment fees to the FHLB in order to increase the duration and reduce interest costs of these advances. Such fees were deferred and are being recognized in interest expense using the interest method as an adjustment to the cost of the new advances over their remaining term.