Federal Home Loan Bank Advances and Other Borrowings

12 Months Ended

Dec. 31, 2012

Federal Home Loan Bank Advances and Other Borrowings [Abstract]

Federal Home Loan Bank Advances and Other Borrowings

NOTE 8 – Federal Home Loan Bank Advances and Other Borrowings

At December 31, 2012, the Company had $124.1 million in FHLB advances and other borrowings. Of the $124.1 million, FHLB advances represented $103.5 million, securities sold under structured agreements to repurchase represented $19.2 million, and a line of credit represented $1.4 million. At December 31, 2011, FHLB advances and other borrowings totaled $122.7 million, of which FHLB advances represented $103.5 million and securities sold under structured agreements to repurchase represented $19.2 million.

The FHLB advances are secured with approximately $136.1 million of mortgage loans and $5.8 million of stock in the FHLB. During 2012, the Company restructured three FHLB advances totaling $45.0 million. In accordance with accounting guidance, we determined that the present value of the cash flows of the modified advances will not change by more than 10% from the present value of the cash flows of the original advances. Therefore, the modified FHLB advances are considered to be a restructuring and no gain or loss was recorded in the transaction. The original FHLB advances had a weighted rate of 3.16% and an average remaining life of 52 months. Under the modified arrangements, the $45.0 million in FHLB advances have a weighted average rate of 2.42% and an average remaining life of 61 months. Under a similar scenario in the third quarter of 2011, the Company restructured four FHLB advances totaling $44.5 million with a weighted average rate of 3.26% and average remaining life of 32 months under their original terms. Following the restructure, the weighted average rate of the four advances was 2.71% and the remaining average life was 54 months.

Listed below is a summary of the terms and maturities of the advances at December 31, 2012 and 2011. A number of the Company’s advances are callable and subject to repricing during 2012 at the option of the FHLB.

	December 31,
(dollars in thousands)	2012					2011
Maturity	Amount		Rate			Amount		Rate
September 2, 2014	$	7,500		2.36	%	$	7,500		2.58	%
August 25, 2015		-		-			10,000		2.80	%
September 28, 2015		-		-			20,000		2.14	%
October 11, 2016		5,000		4.07	%		5,000		4.07	%
October 18, 2016		7,000		2.38	%		7,000		2.55	%
October 18, 2016		7,500		2.55	%		7,500		2.55	%
October 19, 2016		10,000		2.11	%		-		-
October 19, 2016		20,000		1.68	%		-		-
February 13, 2017		7,500		4.38	%		7,500		4.38	%
July 11, 2017		9,000		4.49	%		9,000		4.49	%
July 24, 2017		5,000		4.25	%		5,000		4.25	%
February 15, 2019		10,000		4.47	%		10,000		4.47	%
April 10, 2019		15,000		3.48	%		-		-
April 22, 2019		-		-			15,000		4.75	%
	$	103,500					103,500

At December 31, 2012 and 2011, the Company had four structured debt agreements secured by approximately $24.0 million of various investment securities. Each of these agreements has callable features and is subject to repricing at the option of the seller. Listed below is a summary of the terms and maturities of these structured agreements to repurchase:

(dollars in thousands)
Maturity	Amount		Rate
September 18, 2017	$	10,000		3.63	%
December 17, 2017		2,000		3.65	%
March 14, 2018		3,600		2.75	%
September 15, 2018		3,600		2.55	%
	$	19,200

The Company also has an unsecured, interest only line of credit for $1.5 million with another financial institution for which $1.4 million was outstanding at December 31, 2012. The line of credit bears interest at 5.0% and matures on February 3, 2014. The loan agreement contains various financial covenants related to capital, earnings and asset quality.