11.

Borrowed Funds

The following table summarizes the Corporation’s borrowed funds as of and for the year ended December 31:

(Dollar amounts in thousands)	2015							2014
			Average		Average					Average		Average
	Balance		Balance		Rate			Balance		Balance		Rate
Due within 12 months	$	14,250	$	6,284		1.38	%	$	6,500	$	3,581		2.72	%
Due beyond 12 months but within 5 years		35,000		15,205		3.97	%		15,000		15,836		4.00	%
	$	49,250	$	21,489				$	21,500	$	19,417

Short-term borrowed funds at December 31, 2015 consisted of $14.3 million in FHLB overnight advances with a rate of 0.43%, compared to short-term borrowed funds of $6.5 million at December 2014 which consisted of $3.5 million in FHLB overnight advance with a rate of 0.27% and $3.0 million outstanding on a line of credit with a correspondent bank with a rate of 4.25%.

Long-term borrowed funds at December 31, 2015 consisted of seven $5.0 million FHLB term advances totaling $35.0 million, compared to three $5.0 million FHLB advances totaling $15.0 million at December 31, 2014. All borrowings from the FHLB are secured by a blanket lien of qualified collateral. Qualified collateral at December 31, 2015 totaled $219.8 million.

During the fourth quarter of 2015, the Corporation borrowed four $5.0 million FHLB term advances. Two of the advances have three year terms and fixed rates of 1.69% and 1.62%, respectively. The third and fourth advances have four and five year terms, respectively, and fixed rates of 1.94% and 2.06%, respectively.

The three remaining $5.0 million FHLB term advances each have a fixed rate of 0.93% and mature in November 2017. These three advances originally had rates of 4.98%, 4.83% and 4.68%, but were exchanged and modified in 2012 for advances with a rate of 0.93%. At the time of the exchange, prepayment penalties associated with the three advances totaled $2.3 million and were cash-settled with the FHLB at the time of modification. The Corporation is amortizing this prepayment penalty over the life of the new advances. At December 31, 2015, unamortized prepayment penalties totaled $872,000.

Before modification, the three advances totaling $15.0 million had a weighted average rate of 4.83%. After modification and including prepayment penalty amortization, the three advances have a weighted average rate of 3.98%.

Scheduled maturities of borrowed funds for the next five years are as follows:

(Dollar amounts in thousands)	Amount
2016	$	14,250
2017		15,000
2018		10,000
2019		5,000
2020		5,000
Thereafter		-
	$	49,250

The Bank maintains a credit arrangement with the FHLB as a source of additional liquidity. The total maximum borrowing capacity with the FHLB, excluding loans outstanding of $49.3 million and irrevocable standby letters of credit issued to secure certain deposit accounts of $50.0 million at December 31, 2015 was $120.6 million. In addition, the Corporation has $7.5 million of funds available on a line of credit through another correspondent bank.