FHLBP Advances and Short-Term Borrowed Funds

12 Months Ended

Dec. 31, 2012

FHLBP ADVANCES AND SHORT-TERM BORROWED FUNDS

(7) FHLBP ADVANCES AND SHORT-TERM BORROWED FUNDS

DNB’s short-term borrowed funds consist of borrowings at the Federal Home Loan Bank of Pittsburgh (FHLBP), repurchase agreements and Federal funds purchased. Repurchase agreements and Federal funds purchased generally represent one-day borrowings. Borrowings at the FHLBP consist of overnight and 90 day borrowings. DNB had $17.0 million of repurchase agreements at December 31, 2012 with an average rate of 0.30% and $23.8 million of repurchase agreements at December 31, 2011 with an average rate of 0.40%.

In addition to short-term borrowings, DNB maintains borrowing arrangements with a correspondent bank and the FHLBP, as well as access to the discount window at the Federal Reserve Bank of Philadelphia to meet short-term liquidity needs. Through these relationships, DNB has available credit of approximately $195.2 million. DNB has a maximum borrowing capacity at the FHLBP of approximately $178.2 million. At December 31, 2012, DNB had $20.0 million of outstanding long-term advances, which mature at various dates through the year-ended December 31, 2015, as shown in the table below. These advances are collateralized by loans and investment securities, and a lien on the Bank’s FHLBP stock. At December 31, 2011, DNB had $20.0 million of outstanding long-term advances with an average rate of 4.17%. All of the advances are convertible term advances and are callable, at the FHLBP’s option, at various dates. If an advance is called by the FHLBP, DNB has the option of repaying the borrowing, or continuing to borrow at three month Libor plus 10-14 basis points, depending on the advance. In addition to the $20.0 million of borrowings from the FHLBP at December 31, 2012, the FHLBP had issued letters of credit, on DNB’s behalf, totaling $20.0 million against DNB’s available credit lines. These letters of credit were used to secure public deposits as required by law.



	December 31, 2012
	Weighted
(Dollars in thousands)	Average Rate		Amount
Due by December 31, 2013	2.49%	$	10,000
Due by December 31, 2015	5.86		10,000
Total	4.17%	$	20,000

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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