NOTE 8 – FHLB ADVANCES

The Bank is a member of the Federal Home Loan Bank of Boston (“FHLB”). At March 31, 2015, the Bank had the ability to borrow up to $106.7 million from the FHLB. This borrowing capacity is based on a certain percentage of the value of the Bank’s qualified collateral, as defined in the FHLB Statement of Products Policy, at the time of the borrowing. In accordance with an agreement with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances.

The following table presents certain information regarding our FHLB advances during the periods or at the dates indicated.

	At March 31, 2015					At December 31, 2014
			Weighted					Weighted
	Amount		Average			Amount		Average
(Dollars in thousands)	Due		Cost			Due		Cost
Year of maturity: (1)
2015	$	9,818		0.55	%	$	6,792		0.73	%
2016		16,375		0.85	%		16,068		0.85	%
2017		22,713		1.56	%		21,021		1.59	%
2018		7,723		2.53	%		5,743		2.90	%
2019		3,371		2.61	%		3,420		2.59	%
2020 - 2024		1,579		1.26	%		383		0.18	%
2025 - 2028		335		-			335		-

Total FHLB advances	$	61,914		1.37	%	$	53,762		1.43	%

(1) Amount due includes scheduled principal payments on amortizing advances.

The Bank is required to maintain an investment in capital stock of the FHLB in an amount that is based on a percentage of its outstanding residential first mortgage loans. The stock is bought from and sold to the Federal Home Loan Bank based upon its $100 par value. The stock does not have a readily determinable fair value and as such is classified as restricted stock, carried at cost and evaluated for impairment. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) the significance of the decline in net assets of the FHLB as compared to the capital stock amount and the length of time this situation persists; (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to its operating performance; (c) the impact of legislative and regulatory changes on the customer base of the FHLB; and (d) the liquidity position of the FHLB. Management evaluated the stock and concluded that the stock was not impaired for the periods presented herein.