Note 8 – Borrowings

Our borrowings consist of advances from the FHLB and a term loan from a commercial bank. The FHLB advances are available under a specific collateral pledge and security agreement, which requires that we maintain collateral for all of our borrowings equal to 30% of total assets. Our advances from the FHLB may be in the form of short-term or long-term obligations. Short-term advances have maturities of one year or less and may contain prepayment penalties. Long-term borrowings through the FHLB have original maturities up to 15 years and generally contain prepayment penalties. As of December 31, 2017, our total credit line with the FHLB was $239.3 million, with outstanding balances of $85.0 million and $100.0 million at December 31, 2017 and 2016, respectively.

On September 30, 2016, we entered into a loan agreement with a commercial bank whereby we borrowed $3.5 million for a term of eight years. The unsecured note bears interest at a fixed rate of 4.25% for the first 36 months then, at the option of the Company, converts to either (1) floating rate of the Wall Street Journal Prime plus 50 basis points or (2) fixed rate at 275 basis points over the five year amortizing FHLB rate for the remaining five years. Repayment terms are monthly interest only payments for the first 36 months, then quarterly principal payments of $175,000 plus interest. The loan is subject to a prepayment penalty of 1% of the principal amount prepaid during the first 36 months. If we elect the five year fixed rate of 275 basis points over the FHLB rate (“FHLB Rate Period”), the loan will be subject to a prepayment penalty of 2% during the first and second years of the FHLB Rate Period and 1% of the principal repaid during the third, fourth, and fifth years of the FHLB Rate Period. We may make additional principal payments from internally generated funds of up to $875,000 per year during any fixed rate period without penalty. There is no prepayment penalty during any floating rate period.

Certain information regarding our borrowings is as follows as of December 31:

	2017			2016
Amount outstanding at year-end:	(dollars in thousands)
FHLB advances	$	85,000		$	100,000
Commercial note payable		3,500			3,500
Weighted-average interest rate at year-end:
FHLB advances		2.40	%		3.30	%
Commercial note payable		4.25	%		4.25	%
Maximum outstanding at any month-end:
FHLB advances	$	169,950		$	125,000
Commercial note payable		3,500			3,500
Average outstanding:
FHLB advances	$	91,456		$	117,418
Commercial note payable		3,500			3,500
Weighted-average interest rate during the year:
FHLB advances		3.03	%		3.10	%
Commercial note payable		5.04	%		4.37	%

The following table sets forth information concerning the interest rates and maturity dates of the advances from the FHLB as of December 31, 2017:

Principal
Amount (in thousands)		Rate	Maturity
$	15,000	2.58% to 3.43%	2018
	35,000	1.55% to 4.00%	2019
	25,000	1.75% to 1.92%	2020
	10,000	2.19%	2022
$	85,000

Certain loans in the amount of $196.9 million have been pledged under a blanket floating lien to the FHLB as collateral against advances.