11.

Borrowings

Correspondent Bank Lines of Credit

At both September 30, 2012 and December 31, 2011, the Company had access to two secured and one unsecured line of credit from correspondent banks totaling $35 million, none of which was utilized as of either date.

FHLB Borrowings

As disclosed in Note 3, Investment Securities Available for Sale, and Note 4, Loans, the Company pledges investment securities and loans to collateralize FHLB advances. Additionally, the Company may pledge cash and cash equivalents. The amount that can be borrowed is based on the balance of the type of asset pledged as collateral multiplied by lendable collateral value percentages as calculated by the FHLB. The Company can borrow up to 15% of total assets from the FHLB.

The Company is a member of the FHLB of Atlanta, which is one of 12 regional FHLBs that administer home financing credit for depository institutions. As an FHLB member, and to be eligible to borrow, the Company is required to purchase and maintain stock in the FHLB. No ready market exists for FHLB stock, and this stock has no quoted market value. Purchases and redemptions are normally transacted each quarter to adjust the Company’s investment to an amount based on the FHLB requirements, which are generally based on the amount of borrowings the Company has outstanding with the FHLB. Requests for redemptions of FHLB stock are met at the discretion of the FHLB. The carrying value of this stock was $1.8 million at September 30, 2012 and $3.5 million at December 31, 2011.

During the three and nine months ended September 30, 2012, the FHLB redeemed $378 thousand and $1.7 million, respectively, of FHLB stock from the Company at book value.

The following table summarizes the utilization and availability of funds borrowed from the FHLB at the dates indicated (in thousands).


	September 30, 2012		December 31, 2011
Available lendable loan collateral value pledged to serve against FHLB advances	$	79,922	$	66,690
Available lendable investment security collateral value pledged to serve against FHLB advances		—		15,410

Total lendable collateral value pledged to serve against FHLB advances	$	79,922	$	82,100

At both September 30, 2012 and December 31, 2011, the Company had no outstanding advances from the FHLB.

Federal Reserve Discount Window

At September 30, 2012 and December 31, 2011, $4.5 million and $10.9 million of loans and investment securities, respectively, were pledged as collateral to cover the various Federal Reserve services that are available for use by the Company. In May 2012, the Company was notified by the Federal Reserve that any future borrowings from the Federal Reserve Discount Window (“Discount Window”) would be reinstated at the primary credit rate. Primary credit is available through the Discount Window to generally sound depository institutions on a very short-term basis, typically overnight, at a rate above the Federal Open Market Committee target rate for federal funds. The Company’s maximum maturity for potential borrowings is overnight. From the first quarter 2010 through the second quarter 2012, the Company was only able to borrow from the Discount Window at the secondary credit rate and such borrowings could only be used as a backup source of funding on a very short-term basis or to facilitate an orderly resolution of operational issues. The Company has not drawn on this availability since its initial establishment in 2009 other than to periodically test its ability to access such lines. The Federal Reserve has the discretion to deny approval of borrowing requests.