Federal Home Loan Bank Advances

12 Months Ended

Dec. 31, 2013

Disclosure Federal Home Loan Bank Advances Additional Information [Abstract]

Federal Home Loan Bank Advances

Federal Home Loan Bank Advances

Federal Home Loan Bank advances amounted to $46,708 and $46,508 at December 31, 2013 and December 31, 2012 respectively. All advances were bullet maturities with no call features. At December 31, 2013, collateral pledged for FHLB advances consisted of qualified multi-family and residential real estate mortgage loans and investment securities of $89,554 and $16,845, respectively. The maximum borrowing capacity of the Bank at December 31, 2013 was $73,819. The Bank maintains a $40,000 cash management line of credit (CMA) with the FHLB. No amounts were outstanding for the CMA line of credit at December 31, 2013 and December 31, 2012.

Maturities of FHLB advances outstanding at December 31, 2013 and 2012 are as follows:

	December 31, 2013			December 31, 2012
	(Dollars in thousands)
Maturity January 2014 with fixed rate 3.55%	$	1		$	15
Maturity January 2015 with fixed rate 0.80%	20,000			20,000
Maturity December 2016 with fixed rate 0.79%	10,000			10,000
Maturities June 2017 through December 2017, with fixed rates ranging from 0.89% to 0.99%	15,000			15,000
Maturity June 2018 fixed rate 1.24%	2,500			2,500
Restructuring prepayment penalty	(793		)	(1,007		)
Total FHLB advances	$	46,708		$	46,508

In 2012, the Corporation prepaid $27,500 of fixed rate FHLB advances with a contractual average interest rate of 2.47% and a remaining maturity of 12 to 31 months. The prepaid FHLB advances were replaced with $27,500 of fixed rate FHLB advances with a contractual average interest rate of 0.88% and terms of 49 to 67 months. In accordance with the restructure, the Corporation was required to pay a prepayment penalty of $1,017 to the FHLB. The present value of the cash flows under the terms of the new FHLB advances (including the prepayment penalties) were not more than 10% different from the present value of the cash flows under the terms of the prepaid FHLB advances and therefore the new advances were not considered to be substantially different from the original advances in accordance with ASC 470-50, Debt – Modifications and Exchanges. As a result, the prepayment penalties have been treated as a discount on the new debt and are being amortized over the life of the new advances as an adjustment to rate. The prepayment penalty effectively increases the interest rate on the new advances over the lives of the new advances at the time of the transaction. The benefit of prepaying these advances was an immediate decrease in interest expense and a decrease in interest rate sensitivity as the maturity of each of the refinanced FHLB advances was extended at a lower rate.

At December 31, 2013, the advances were structured to contractually pay down as follows:

	Balance			Weighted Average Rate
2014	$	1		—%
2015	20,000			0.80
2016	10,000			0.79
2017	15,000			0.96
2018	2,500			1.24
Thereafter	—			—
Total	$	47,501		0.87%
Restructuring prepayment penalty	(793		)
Total	$	46,708