Note 8 - Borrowings

Securities sold under agreements to repurchase totaled $19,262,000 and $19,455,000 at year-end 2012 and 2011, respectively. These repurchase agreements were secured by mortgage-backed securities with a carrying amount of $23,012,000 and $23,491,000 at December 31, 2012 and 2011, respectively.

Securities sold under agreements to repurchase are financing arrangements that mature within one year. At maturity, the securities underlying the agreements are returned to the Company. Information concerning securities sold under agreements to repurchase and federal funds purchased is summarized as follows:

	2012			2011			2010

Average daily balance during the year	$	18,172		$	24,144		$	40,217
Average interest rate during the year		0.05	%		0.30	%		0.66	%
Maximum month end balance during the year	$	21,494		$	29,586		$	46,044
Weighted average interest rate at year-end		0.02	%		0.17	%		0.44	%

Related parties are directors, stockholders with 5% or more ownership of the Company and executive officers of the Company or Bank and their related interests. Related party securities sold under repurchase agreements at year-end 2012 were $4,406,000 and there were $2,496,000 at year-end 2011 and were at the same terms and conditions that are available to the public.

At year-end 2012, there were three customer relationships in which the customer had securities sold under repurchase agreements that totaled in excess of 10% of consolidated stockholders' equity. These relationships totaled $8,881,000 and had a weighted average maturity of one day.

The Company had no advances from the Federal Home Loan Bank of Chicago ("FHLB") at December 31, 2012 and 2011 and no advances at December 31, 2012 from the line of credit opened during the year with the Federal Reserve Bank of Chicago ("FRB").

The Company maintains a collateral pledge agreement with the FHLB covering secured advances whereby the Company pledges mortgage loans on 1-4 family homes or 5+ family dwellings. At December 31, 2012, the Company had $27,934,000 in loans pledged to the FHLB, securing an unfunded line of credit of $15,301,000. The Company also maintains a collateral pledge agreement with the FRB covering secured advances whereby the Company pledges commercial loans. At December 31, 2012 the Company had $149,000 in loans pledged to the FHLB, securing an unfunded line of credit of $121,000.

Federal funds purchased is a short-term borrowing from a money center bank. At December 31, 2012 and December 31, 2011 there were no federal funds purchased.