SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

12 Months Ended

Dec. 31, 2015

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

7. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

At December 31, 2015 and 2014, securities sold under agreements to repurchase totaled $50.9 million and $36.3 million, respectively, and were secured by U.S. GSE, residential mortgage-backed securities and residential collateralized mortgage obligations with carrying amounts of $55.9 million and $40.3 million, respectively.

Securities sold under agreements to repurchase are financing arrangements with $0.9 million maturing during the first quarter of 2016 and $50.0 million maturing during the fourth quarter of 2016. At maturity, the securities underlying the agreements are returned to the Company. Information concerning the securities sold under agreements to repurchase is summarized as follows:

	2015			2014
(Dollars in thousands)
Average daily balance during the year	$	30,317		$	14,185
Average interest rate during the year		0.65	%		2.71	%
Maximum month-end balance during the year	$	51,400		$	36,879
Weighted average interest rate at year-end		0.64	%		2.67	%

The primary risk associated with these secured borrowings is the requirement to pledge a market value based balance of collateral in excess of the borrowed amount. The excess collateral pledged represents an unsecured exposure to the lending counterparty. As the market value of the collateral changes, both through changes in discount rates and spreads as well as related cash flows, additional collateral may need to be pledged. In accordance with our policies, eligible counterparties are defined and monitored to minimize our exposure.