SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2012

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

NOTE 7 – SHORT-TERM BORROWINGS

Short-term borrowings are generally comprised of repurchase agreements. Repurchase agreements are advances by customers that are not covered by federal deposit insurance. This obligation of the Bank is secured by bank-owned securities held by a third-party safekeeping agent.

The balances at year-end are shown below:

	2012			2011
Outstanding at December 31,	$	10,190,059		$	7,814,745
Average interest rate at year end		0.59	%		0.71	%
Average balance during year		9,241,260			9,626,125
Average interest rate during year		0.75	%		0.76	%
Maximum month end balance during year		12,037,087			11,986,254

The Bank had securities of $9,283,494 pledged to repurchase agreements at December 31, 2012 and $9,628,031 pledged at December 31, 2011. On December 31, 2012, one customer increased their balance by $2.4 million. The Bank maintains a cushion in securities pledged to repurchase agreements due to fluctuations in the daily account balances; however, this cushion was not significant enough to cover that large of a transaction. As a result, the Bank pledged an additional $1.2 million in securities on the following business day to bring the total pledged to $10,529,109.

The Bank could request to borrow from the Discount Window under the secondary credit program. Any request to borrow would require approval by the FDIC and a pledge of collateral. The collateral previously pledged to the Discount Window is now being used as collateral for the Bank’s FRB ACH debit activity. At December 31, 2011, collateral available for Discount Window borrowings consisted of $2,557,550 in securities and $4,793,892 in home equity loans. There have been no borrowings from the Discount Window since January 2010.