Borrowed Funds and Mandatorily Redeemable Securities

12 Months Ended

Dec. 31, 2011

Borrowed Funds and Mandatorily Redeemable Securities

Borrowed Funds and Mandatorily Redeemable Securities

Note 11 — Borrowed Funds and Mandatorily Redeemable Securities

Details of long-term debt and mandatorily redeemable securities as of December 31, 2011 and 2010 are as follows:

(Dollars in thousands)	2011		2010
Federal Home Loan Bank borrowings (0.78%—6.54%)	$	25,897	$	15,927
Mandatorily redeemable securities	10,213		8,228
Other long-term debt	1,046		661
Total long-term debt and mandatorily redeemable securities	$	37,156	$	24,816

Annual maturities of long-term debt outstanding at December 31, 2011, for the next five years beginning in 2012, are as follows (in thousands): $230; $15,253; $5,235; $236; $5,384; and $10,818.

At December 31, 2011, the Federal Home Loan Bank borrowings represented a source of funding for certain residential mortgage activities and consisted of ten fixed rate notes with maturities ranging from 2013 to 2022. These notes were collateralized by $32.63 million of certain real estate loans.

Short-term borrowings include Federal funds purchased, security repurchase agreements, commercial paper and other short-term borrowings. There were no Federal funds purchased outstanding as of December 31, 2011 and 2010. Securities sold under agreement to repurchase were $106.99 million and $136.03 million as of December 31, 2011 and 2010. Commercial paper was $7.58 million and $3.60 million as of December 31, 2011 and 2010. Other short-term borrowings were $10.66 million and $16.36 million as of December 31, 2011 and 2010. Weighted average interest rates on short term borrowings as of December 31, 2011 and 2010 were 0.14% and 0.20% for security repurchase agreements, 0.21% and 0.28% for commercial paper and 0.00% and 0.68% for other short-term borrowings, respectively.

Mandatorily redeemable securities as of December 31, 2011 and 2010, of $10.21 million and $8.23 million, respectively reflected the “book value” shares under the 1st Source Executive Incentive Plan. See Note 16 - Employee Stock Benefit Plans for additional information. Dividends paid on these shares and changes in book value per share are recorded as other interest expense. Total interest expense recorded for 2011, 2010, and 2009 was $1.04 million, $0.55 million, and $0.45 million, respectively.