Long-Term Debt

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Long-Term Debt

8. LONG-TERM DEBT

Long-term debt at December 31, 2011 and 2010 consisted of the following:

		2011		2010
Advance from FHLB with a 2.23% fixed rate of interest maturing July 30, 2012. (transferred to short-term borrowings)	$	0	$	2,000,000
Advance from FHLB with a 2.79% fixed rate of interest maturing July 29, 2013.		2,000,000		2,000,000
Advance from FHLB with a 3.85% fixed rate of interest maturing April 30, 2014.		10,000,000		10,000,000
Advance from FHLB with a 3.39% fixed rate of  interest maturing August 20, 2018.  (convertible to a variable rate at quarterly options of FHLB – no conversion option has been made).		5,000,000		5,000,000
Advance from FHLB with a 2.78% fixed rate of interest maturing September 10, 2018.  (convertible to a variable rate at quarterly options of FHLB – no conversion option has been made).		5,000,000		5,000,000
Total long-term debt	$	22,000,000	$	24,000,000

The advances from FHLB are collateralized by the pledging a combination of 1-4 family residential mortgages and investment securities. At December 31, 2011, 1-4 family residential mortgage loans only with a lendable collateral value of $30,231,383 were pledged to secure these advances. In 2010, the advances were secured by 1-4 family residential mortgage loans with a lendable collateral value of $22,329,118 and investment securities with a carrying value of $3,882,357. The amount of FHLB Stock held is based on membership and level of FHLB advances. At year end 2011 and 2010, the amount of stock held that is based on membership was $454,900 and $479,900, respectively, and the amount of stock held that is based on the level of FHLB advances was $1,331,600 and $1,170,000, respectively. At December 31, 2011, the Corporation had approximately $52,400,000 of unused lines of credit with the FHLB.

The following are maturities of long-term debt for the next five years. At December 31, 2011, there was no floating rate long-term debt; however, two of these advances have convertible call features. Two advances totaling $10,000,000 have convertible options by the issuer to convert the rates to a 3-month LIBOR. The Bank intends to pay off these advances at the conversion dates. The Bank has the ability to hold this debt until conversion and the means of repayment.

Due in:		Fixed Rate Amount
2012	$	0
2013		2,000,000
2014		10,000,000
2015		0
2016		0
Later Years		10,000,000	*
Total long-term debt	$	22,000,000

*Fixed rate advances with convertible options