NOTE G – BORROWED FUNDS

Borrowed funds consisted of the following:

	December 31,
	2011		2010
	(In thousands)

FHLB Advances	$	24,309	$	26,127
Treasury tax and loan note		-		843

Total borrowings	$	24,309	$	26,970

The Bank has outstanding advances from the FHLB under a blanket agreement for advances and a security agreement (Agreements). The Agreements entitle the Bank to borrow funds from FHLB to fund mortgage loan programs and to satisfy certain other funding needs. Advances from the FHLB have call dates and maturity dates ranging from February 2012, through September 2032. Interest is payable monthly at rates ranging from 2.5675% to 5.810%. The weighted average rate at December 31, 2011 and 2010 was 4.09% and 4.07% respectively. The advances are collateralized by FHLB capital stock, amounts on deposit with the FHLB, and a blanket lien on first mortgage, small business, and agriculture loans equal to the advances outstanding. FHLB advances available and unused at December 31, 2011, totaled $56.8 million.

Treasury tax and loan notes or payments, classified as borrowings, generally mature within one to sixty days from the transaction date. Interest was paid at an adjustable rate as set by the U.S. Government. Effective with December 30, 2011, treasury tax and loan payments will no longer be processed by financial institutions.

Federal funds purchased represent unsecured borrowings from other banks, generally on an overnight basis.

Annual principal repayment requirements on FHLB borrowing at December 31, 2011, are as follows:

Year	Amount
	(In thousands)
2012		9,857
2013		2,447
2014		681
2015		2,180
2016		411
Thereafter		8,733

	$	24,309