Note 8 - Borrowings

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

8:

     BORROWINGS

Federal Home Loan Bank Advances

Federal Home Loan Bank advances consist of the following:

	December 31, 2016					December 31, 2015
Maturity Date	Amount		Weighted Average Rate			Amount		Weighted Average Rate
2017		43,600,000		0.79	%		-		0.00	%
2018		50,000,000		2.14	%		50,000,000		2.14	%
2019		2,100,000		4.87	%		2,100,000		4.87	%
	$	95,700,000		1.72	%	$	52,100,000		2.25	%

The FHLB requires the Bank to maintain collateral in relation to outstanding balances of advances. For collateral purposes, the FHLB values mortgage loans free of other pledges, liens and encumbrances at

80%

of their fair value, and investment securities free of other pledges, liens and encumbrances at

95%

of their fair value. Based on existing collateral as well as the FHLB’s limitation of advances to

35%

of assets, the Bank has the ability to borrow an additional

$59.8

million from the FHLB, as of

December

31,

2016.

Federal Reserve Bank Borrowings

During

2008,

the Bank established a borrowing line with the Federal Reserve Bank. The Bank has the ability to borrow

$25.2

million as of

December

31,

2016.

The Federal Reserve Bank requires the Bank to maintain collateral in relation to borrowings outstanding. The Bank had

no

borrowings outstanding on this line as of

December

31,

2016

and

2015.

Securities Sold Under Agreements to Repurchase

In

January

2008,

the Company borrowed

$30.0

million under

three

structured repurchase agreements. Interest was based on a fixed weighted average rate of

2.65%

until maturity in

January

2018.

Beginning in

February

2010,

the counterparty, Barclay’s Capital, Inc., had the option to terminate the agreements on a quarterly basis until maturity.

Prior to the stated maturity date, the Company paid off

one

of these agreements in the amount

$15.0

million in

May

2013

and another agreement in the amount of

$5.0

million in

November

2011.

In

June

2015,

the Company executed a structured transaction in order to pay off the remaining

$10.0

million, prior to its stated maturity date, incurring a prepayment penalty of

$463,992.