Borrowed Funds

Other borrowed funds consist of the following:



		December 31,
		2015				2014
	Maturing	Amount		Weighted Average Rate		Amount		Weighted Average Rate
		(Dollars in thousands)
FHLB advances	Dec 19, 2018	$	10,000	2.33	%	$	10,000	2.33	%
Repurchase agreements		2,438		0.10		3,569		0.10
Long term lease obligation		124		2.46		183		2.46
		$	12,562	1.90	%	$	13,752	1.75	%

FHLB Advances

The Bank pledges certain loans that meet underwriting criteria established by the Federal Home Loan Bank of Chicago (“FHLB of Chicago”) as collateral for outstanding advances. The unpaid principal balance of loans pledged to secure FHLB of Chicago borrowings totaled $595.6 million and $652.3 million at December 31, 2015 and 2014, respectively. The FHLB of Chicago borrowings are also collateralized by mortgage-related securities totaling $55.9 million and $88.9 million at December 31, 2015 and 2014, respectively. At December 31, 2015, there were no FHLB of Chicago borrowings with call features that may be exercised by the FHLB of Chicago.

On September 19, 2013, FHLB of Chicago advances totaling $176.0 million were prepaid. The prepaid advances were fixed rate, due to mature in January 2018, with a then-current weighted average rate of 3.18%. The prepayment triggered an early termination penalty of $16.1 million, which was recorded in non-interest expense for the nine months ended December 31, 2013.

Repurchase Agreements

The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing arrangements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability in the Company’s Consolidated Balance Sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts.

Long Term Lease Obligation

The Company enters into agreements from time to time that give the right to use property in exchange for making a series of payments. The term of the lease obligations typically exceed three years and provide an opportunity to purchase the leased item at the end of the lease term at a price below market rate. These types of lease are considered a capital lease because the Company has in essence accepted the risks and benefits of ownership. As a result a capital lease requires an asset must be subsequently depreciated and included as property and equipment in the Company's Consolidated Balance Sheets.