NOTE 7 — OTHER BORROWINGS

There were no outstanding borrowings with the Federal Reserve Bank (FRB) at June 30, 2011 or at December 31, 2010.

Assets pledged as collateral with the FRB were as follows:


	June 30, 2011		December 31, 2010
Commercial loans	$	10,356	$	13,131
Commercial real estate loans		22,356		26,214

	$	32,712		39,345

Based on the collateral pledged, CFBank was eligible to borrow up to $19,938 from the FRB at June 30, 2011. The decline in the pledged loan balances at June 30, 2011 was related to a decline in eligible loans due to principal reductions, payoffs and credit downgrades compared to December 31, 2010. In April 2011, CFBank was notified by the FRB that, due to regulatory considerations, it was no longer eligible for borrowings under the FRB’s Primary Credit Program, but was only eligible to borrow under the FRB’s Secondary Credit Program. Under the FRB’s Primary Credit Program, CFBank had access to short-term funds at any time, for any reason based on the collateral pledged. Under the Secondary Credit Program, which involves a higher level of administration, each borrowing request must be individually underwritten and approved by the FRB, CFBank’s collateral is automatically reduced by 10% and the cost of borrowings is 50bp higher.

CFBank had a line of credit with one commercial bank, totaling $3.0 million at December 31, 2010, which was terminated by the commercial bank in March 2011 due to CFBank’s financial performance. At December 31, 2010 and at termination, there was no outstanding balance on this line of credit.