SHORT-TERM BORROWINGS |
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Short-term Debt [Text Block] | NOTE 9 — SHORT-TERM BORROWINGS Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, Federal Discount Window, and Federal Home Loan Bank (“FHLB”) advances, which generally represent overnight or less than 30-day borrowings. Short-term borrowings and weighted-average interest rates at and for the years ended December 31, 2016 and 2015 are as follows:
At December 31, 2016, the maximum borrowing capacity of federal funds purchased and the Federal Discount Window was $15,000,000 and $4,612,000, respectively. Please refer to Note 10 — Long-Term Borrowings for the Corporation’s maximum borrowing capacity at FHLB. Securities Sold Under Agreements to Repurchase (“Repurchase Agreements”) The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Corporation may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Corporation to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability on the Corporation’s Consolidated Balance Sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is not offsetting or netting of the investment securities assets with the repurchase agreement liabilities. In addition, as the Corporation does not enter into reverse repurchase agreements, there is no such offsetting to be done with the repurchase agreements. The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Corporation be in default (e.g., fails to make an interest payment to the counterparty). The collateral is held by a correspondent bank in the counterparty’s custodial account. The counterparty has the right to sell or repledge the investment securities. The following table presents the short-term borrowings subject to an enforceable master netting arrangement or repurchase agreements as of December 31, 2016 and 2015.
______________________ (a) As of December 31, 2016 and 2015, the fair value of securities pledged in connection with repurchase agreements was $25,298,000 and $27,510,000, respectively. The following table presents the remaining contractual maturity of the master netting arrangement or repurchase agreements as of December 31, 2016.
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