Note 9 - Federal Funds Purchased and Lines of Credit

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Banking and Thrift Disclosure [Text Block]

NOTE

9.

FEDERAL FUNDS PURCHASED AND LINES OF CREDIT

At

March

31,

2017

and

December

31,

2016,

we had

no

outstanding federal funds purchased balances and

no

outstanding advances on any of the Bank’s lines of credit.

The Bank had the following lines of credit:

Federal Funds

Nonbinding federal funds line of credit agreements with

three

financial institutions totaling

$40.0

million at

March

31,

2017.

The lines of credit had interest rates ranging from

1.14%

to

1.79%

at

March

31,

2017.

Availability of the lines is subject to federal funds balances available for loan, continued borrower eligibility and are reviewed and renewed periodically throughout the year. These lines are intended to support short-term liquidity needs, and the agreements

may

restrict consecutive day usage.

Federal Reserve Bank

Available lines of credit with the Federal Reserve Bank totaling

$18.5

million subject to collateral requirements, namely the amount of certain pledged loans.

Federal Home Loan Bank of San Francisco

Available lines of credit with the Federal Home Loan Bank of San Francisco totaling

$330.3

million subject to certain collateral requirements, namely the amount of pledged loans and investment securities. The line of credit is secured by an investment in Federal Home Loan Bank of San Francisco stock, certain real estate mortgage loans that have been specifically pledged to the Federal Home Loan Bank of San Francisco pursuant to collateral requirements, and pledged securities held in the Bank’s investment securities portfolio.

As of

March

31,

2017,

the Bank was required to hold an investment in Federal Home Loan Bank of San Francisco stock of

$4.5

million recorded in

other assets

in the

Consolidated Balance Sheets

. Our investments in Federal Home Loan Bank of San Francisco stock are restricted investment securities, carried at cost, evaluated for impairment, and excluded from securities accounted for under ASC Topic

320

and ASC Topic

321.

We have

$383.0

million of our commercial and real estate mortgage loans held for the line of credit with the Federal Home Loan Bank of San Francisco for pledging purposes. As of

March

31,

2017,

we held

$25.3

million in securities with the Federal Home Loan Bank of San Francisco for pledging purposes. All of the securities and loans held for pledging purposes with the Federal Home Loan Bank of San Francisco were unused as collateral as of

March

31,

2017.

During the

three

months ended

March

31,

2016,

all outstanding Federal Home Loan Bank of San Francisco term advances were repaid and there were no additional advances during the year ended

December

31,

2016

or the

three

months ended

March

31,

2017.

The maximum amount outstanding from the Federal Home Loan Bank of San Francisco under term advances at any month end during the year ended

December

31,

2016

was

$80.0

million. The average balance outstanding on Federal Home Loan Bank of San Francisco term advances during the year ended

December

31,

2016

was

$18.0

million.