8	Borrowings

The Company’s borrowings with original maturities of one year or less totaled $34,379 and $34,624 at December 31, 2013 and 2012, respectively. Such short-term borrowings consisted entirely of customer repurchase agreements at December 31, 2013 and 2012. Other borrowings totaled $16,388 and $16,428 at December 31, 2013 and 2012, respectively, which included a $15,000 callable fixed rate FHLB borrowing with an initial stated maturity of ten years and a $1,300 non-callable FHLB borrowing with an initial maturity of thirty years at December 31, 2013 and 2012. The callable borrowing of $15,000 from FHLB matures in 2016. The FHLB has the right to call this borrowing at various dates in 2013 and quarterly thereafter. The non-callable borrowing of $1,300 matures in 2027. Our FHLB term borrowings are subject to prepayment penalties under certain circumstances in the event of prepayment.

In early January 2014, the Company prepaid all of its outstanding Federal Home Loan Bank borrowings. The borrowings totaled $16,400 and the related prepayment penalty totaled $1,900 which was recorded in earnings at the time of the prepayment.

Interest expense on all borrowings totaled $751, $826 and $2,028 in 2013, 2012 and 2011, respectively. As of December 31, 2013 and 2012, these borrowings were collateralized by loans and securities with an estimated fair value of $50,767 and $51,226, respectively.

The following table summarizes the average balances, weighted average interest rates and the maximum month-end outstanding amounts of the Company’s borrowings for each of the following years:


		2013			2012			2011
		(Dollars in thousands)
Average balance:	Short-term	$	26,738		$	45,619		$	49,678
	Other Borrowings		16,407			16,446			40,184

Weighted average interest rate (for the year):	Short-term		0.1	%		0.2	%		0.5	%
	Other Borrowings		4.4			4.4			4.4

Weighted average interest rate (at year end):	Short-term		0.1	%		0.3	%		0.3	%
	Other Borrowings		4.4			4.4			4.4

Maximum month-end outstanding amount:	Short-term	$	34,379		$	56,312		$	61,897
	Other Borrowings		16,425			16,463			87,748

HVB is a member of the FHLB. As a member, HVB is able to participate in various FHLB borrowing programs which require certain investments in FHLB common stock as a prerequisite to obtaining funds. As of December 31, 2013, HVB had short-term borrowing lines with the FHLB of $200 million with no amounts outstanding. These, and various other FHLB borrowing programs available to members, are subject to availability of qualifying loan and/or investment securities collateral and other terms and conditions.

HVB also has unsecured overnight borrowing lines totaling $75 million with three major financial institutions which were all unused and available at December 31, 2013. In addition, HVB has approved lines under Retail Certificate of Deposit Agreements with three major financial institutions totaling $1.0 billion of which no balances were outstanding as at December 31, 2013. Utilization of these lines is subject to product availability and other restrictions.

Additional liquidity is also provided by the Company’s ability to borrow from the Federal Reserve Bank’s discount window. In response to the current economic crisis, the Federal Reserve Bank has increased the ability of banks to borrow from this source through its Borrower-in-Custody (“BIC”) program, which expanded the types of collateral which qualify as security for such borrowings. HVB has been approved to participate in the BIC program. There were no balances outstanding with the Federal Reserve at December 31, 2013.

As of December 31, 2013, the Company had qualifying loan and investment securities totaling approximately $556 million which could be utilized under available borrowing programs thereby increasing liquidity.

The various borrowing programs discussed above are subject to certain restrictions and terms and conditions which may include continued availability of such borrowing programs, the Company’s ability to pledge qualifying collateral in sufficient amounts, the Company’s maintenance of capital ratios acceptable to these lenders and other conditions which may be imposed on the Company.