13. Borrowings

Borrowings consist of the following (dollars in thousands):


		December 31, 2013			December 31, 2012			December 31, 2011			For the year 2013
		Outstanding Balance	Rate		Outstanding Balance	Rate		Outstanding Balance	Rate		Average Balance	Weighted Average Rate
Securities sold under agreements to repurchase	$	5,397	0.10%	$	3,836	0.10%	$	3,500	0.10%	$	4,332	0.10%
Short-term borrowings - Federal Home Loan Bank overnight advances		8,400	0.25%		1,600	0.25%		-			3,200	0.25%
	$	13,797	0.19%	$	5,436	0.14%	$	3,500	0.10%	$	7,532	0.16%

The maximum balance of short-term borrowings at any month-end during 2013 was $ 13,863,000.

The Bank has repurchase agreements with several of its depositors, under which customers’ funds are invested daily into an interest bearing account. These funds are carried by the Company as short-term debt. It is the Company’s policy to have repurchase agreements collateralized 100% by U.S. Government securities. As of December 31, 2013, the securities that serve as collateral for securities sold under agreements to repurchase had a fair value of $8,919,000. The interest rate paid on these funds is variable and subject to change daily.

The Bank’s maximum borrowing capacity with the Federal Home Loan Bank of Pittsburgh (“FHLB”) is $135,454,000, with a balance of $8,400,000 outstanding as of December 31, 2013. In order to borrow additional amounts in excess of $2,021,000, the FHLB would require the Bank to purchase additional FHLB Stock. The FHLB is a source of both short-term and long-term funding. The Bank must maintain sufficient qualifying collateral to secure all outstanding advances.

The Bank has entered into an agreement under which it can borrow up to $20,000,000 from the FHLB in their Open RepoPlus product. There were no borrowings under this agreement during the periods included in these consolidated financial statements. There is no expiration date on the current agreement.