NOTE H.

BORROWINGS

Federal Home Loan Bank Advances:

During 2011 and 2010, the Bank received advances from and remitted payments to the FHLB. These advances are collateralized by a portion of the Bank's one-to-four family residential mortgage portfolio, certain secured commercial loans and certain investment securities in accordance with the Advance Security and Collateral Agreement with the FHLB. The following provides information regarding outstanding FHLB advances:

Advances outstanding at December 31, 2011 and 2010 consist of five fixed rate loans totaling $9,000,000 with interest rates ranging from 2.658% to 3.546%. The maturities on these loans range from May 29, 2012, to October 6, 2014.

In addition to the term advances, the Company had overnight borrowings of $0 at December 31, 2011 and $8,457,000 at December 31, 2010.

Annual maturities for the next five years as of December 31, 2011, are as follows:

2012	$	2,000,000
2013		-
2014		7,000000
	$	9,000,000

Junior Subordinated Debentures:

In 2003, the Company issued $5,000,000 of junior subordinated debentures. These junior subordinated debentures qualify as Tier I capital for regulatory capital purposes but are classified as a liability under generally accepted accounting principles in the United States of America. These securities carry an interest rate of LIBOR + 3.15%, adjusted quarterly, with interest paid quarterly in arrears and mature in March, 2033. The Company has the right to call these debentures quarterly.