Note 9: Long Term Debt

On September 30, 2011, the Bank had FHLB debt consisting of two advances. The FHLB holds an option to terminate the $10 million advance on any quarterly payment date. The $10 million advance has an early conversion option which gives the FHLB the option to convert, in whole only, into a one-month LIBOR-based floating rate advance, effective on any quarterly payment date. If the FHLB elects to convert, the Bank may elect to terminate, in whole or in part, without a prepayment fee.

In August, 2011, the Bank prepaid two $5 million advances, and incurred a prepayment fee of $27,300. This reduced the total outstanding balance of FHLB advances from $25 million to $15 million.

Advances on the FHLB lines are secured by a blanket lien on qualified 1 to 4 family residential real estate loans with a lendable collateral value of $55 million. Immediate available credit, as of September 30, 2011, was $38 million. With additional collateral, the total line of credit is worth $65.5 million, with $48.5 million available.

The two advances are shown in the following table.


Description	Balance		Acquired		Current Interest Rate			Maturity Date

Convertible	$	10,000,000		9/12/2006		4.23	%		9/12/2016
Fixed Rate Hybrid		5,000,000		5/20/2011		2.69	%		5/20/2014

	$	15,000,000