Note 6 - Federal Funds Purchased and Lines of Credit

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Banking and Thrift Disclosure [Text Block]

NOTE

6.

FEDERAL FUNDS PURCHASED AND LINES OF CREDIT

At

September 30, 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

We have entered into nonbinding federal funds line of credit agreements with

three

financial institutions to support short-term liquidity needs. The lines totaled

$35.0

million at

September 30, 2017

and had interest rates ranging from

1.39%

to

2.04%.

Adva

nces under the lines are subject to funds availability, continued borrower eligibility, and

may

have consecutive day usage restrictions. The credit arrangements are reviewed and renewed annually.

Federal Reserve Ban

k

We have an available line of credit with t

he Federal Reserve Bank of

$15.3

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

Federal Home Loan Bank of San Francisc

o

We have an available line of credit with the Federal Home Loan Bank of San Francisco of

$333.

6

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

September 30, 2017,

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

$4.5

million recorded in

O

ther

A

ssets

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 pledged

$383.3

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

September 30, 2017,

we also pledged

$30.4

million in securities to the Federal Home L

oan Bank of San Francisco. All of the securities and loans pledged with the Federal Home Loan Bank of San Francisco were unused as collateral as of

September 30, 2017.