FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable

FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable

The composition of borrowed funds at June 30, 2012 and December 31, 2011 was as follows:

	June 30, 2012						December 31, 2011
	Balance		Weighted average balance		Weighted average rate		Balance		Weighted average balance		Weighted average rate
	(Dollars in Thousands)
Federal funds purchased	$	—	$	102	0.76	%	$	—	$	252	0.90	%
FHLB advances	475		478		6.12		482		656		5.83
Line of credit	2,921		1,933		4.01		810		2,236		4.06
Subordinated notes payable	39,000		39,000		6.93		39,000		39,000		6.12
Junior subordinated notes	10,315		10,315		10.76		10,315		10,315		10.78
	$	52,711	$	51,828	7.58		$	50,607	$	52,459	6.94
Short-term borrowings	$	3,396					$	810
Long-term borrowings	49,315						49,797
	$	52,711					$	50,607

As of June 30, 2012, the Corporation was in compliance with its debt covenants under its senior line of credit. The Corporation pays an unused line fee on its secured senior line of credit. For the six months ended June 30, 2012 and 2011, the Corporation incurred unused line fee expense of $5,000 and $4,000, respectively. The unused line fee is recorded as a component of interest expense.

During the first quarter of 2012, the Corporation sold and issued approximately $6.2 million in aggregate principal amount of subordinated debentures ("debentures") to certain accredited investors. The debentures have been structured to qualify as Tier 2 capital, mature on January 15, 2022 and bear a fixed interest rate of 7.5% per year for their entire term. The Corporation may, at its option, redeem the debentures, in whole or part, at any time after the fifth anniversary of issuance. The Corporation used the net proceeds from the sale of the debentures to replace a portion of its existing $39.0 million of subordinated notes payable.