Note 10:

Long Term Debt

FHLB Debt

As of September 30, 2015 and December 31, 2014, the Bank had $30 million and $35 million of outstanding FHLB debt, respectively, consisting of five and six advances, respectively. A $5 million advance with a LIBOR-based floating rate advance which matured in May 2015 was replaced with a $5 million fixed rate advance, maturing in February 2016. In June 2015, a $5 million fixed rate advance was replaced with a $5 million LIBOR-based floating rate advance maturing in September 2016, and a $5 million fixed rate advance was repaid. The advanced which matured on October 20, 2015, was replaced with a $5 million, 0.52% fixed rate credit advance maturing on October 20, 2016.

The five advances are shown in the following table.


Description	Balance		Originated		Current Interest Rate			Maturity Date

Adjustable Rate Hybrid	$	10,000,000		4/12/2013		2.65590	%		4/13/2020
Fixed Rate Credit		5,000,000		10/20/2014		0.47000	%		4/20/2016
Fixed Rate Credit		5,000,000		10/20/2014		0.30000	%		10/20/2015
Fixed Rate Credit		5,000,000		5/20/2015		0.37000	%		2/22/2016
Adjustable Rate Credit		5,000,000		6/18/2015		0.30080	%		9/19/2016

	$	30,000,000

Advances on the FHLB lines are secured by a blanket lien on qualified 1 to 4 family residential real estate loans. Immediate available credit, as of September 30, 2015, was $48.7 million against a total line of credit of $82.7 million.

As of September 30, 2015 and December 31, 2014, the Company had $30.0 million and $35.0 million, respectively, in FHLB debt outstanding with a weighted average interest rate of 1.13% and 0.96%, respectively.

Subordinated Debt

On May 28, 2015, the Company entered into a Subordinated Note Purchase Agreement (the “Purchase Agreement”) with 29 accredited investors under which the Company issued an aggregate of $7,000,000 of subordinated notes (the “Notes”) to the accredited investors. The Notes have a maturity date of May 28, 2025. The Notes bear interest, payable on the 1st of March and September of each year, commencing September 1, 2015, at a fixed interest rate of 6.50% per year. The Notes are not convertible into common stock or preferred stock, and are not callable by the holders. The Company has the right to redeem the Notes, in whole or in part, without premium or penalty, at any interest payment date on or after May 28, 2020 and prior to the maturity date, but in all cases in a principal amount with integral multiples of $1,000, plus interest accrued and unpaid through the date of redemption. If an event of default occurs, such as the bankruptcy of the Company, the holder of a Note may declare the principal amount of the Note to be due and immediately payable. The Notes are unsecured, subordinated obligations of the Company and will rank junior in right of payment to the Company’s existing and future senior indebtedness. The Notes qualify as Tier 2 capital for regulatory reporting.


(Dollars in thousands)	Balance as of September 30, 2015
6.5% Subordinated Debt	$	7,000
Less: Issuance costs		(161	)

	$	6,839

Bank Dividends

One source of funds available to the Company is the payment of dividends by the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval from the Bank’s regulators.