ADVANCES FROM FEDERAL HOME LOAN BANK

12 Months Ended

Dec. 31, 2013

Advances from Federal Home Loan Banks [Abstract]

Federal Home Loan Bank Advances, Disclosure [Text Block]

10. ADVANCES FROM FEDERAL HOME LOAN BANK

Advances from the FHLB at year-end are as follows:

	December 31,
	2013					2012
	Weighted-					Weighted-
(Dollars in Thousands)	Average					Average
	Rate			Amount		Rate			Amount
Fixed rate advances:
Convertible fixed rate advance with an interest rate of 4.02% due 2017		4.02	%	$	10,000		4.02	%	$	10,000
Other fixed rate advances with interest rates from 4.19% to 5.72%due through 2026
		4.85	%		2,389		4.87	%		2,596
Total borrowings				$	12,389				$	12,596

Our convertible fixed rate advance is fixed for a two year period. At the end of the fixed rate term and quarterly thereafter, the FHLB has the right to convert the advance to a variable rate advance tied to the three-month LIBOR index. Upon conversion, we can prepay the advance at no penalty. During the third quarter of 2012, we prepaid a $10.0 million convertible fixed rate advance with an interest rate of 3.99% and a scheduled maturity date of 2014. We also prepaid a $5.0 million convertible fixed rate advance with an interest rate of 4.22% and a scheduled maturity date of 2017. In connection with these transactions, we incurred $1.5 million in prepayment penalties. We prepaid these advances to decrease our cost of funds and improve interest income. Advances from the FHLB are secured by our stock in the FHLB, certain securities and substantially all of our first mortgage loans on an individual basis. At December 31, 2013, we had $41.2 million in loans pledged under this arrangement and sufficient collateral available to borrow, approximately, an additional $20.2 million in advances from the FHLB.

The aggregate minimum annual repayments of borrowings as of December 31, 2013 are as follows:

	(Dollars in thousands)
2014	$	222
2015		505
2016		345
2017		10,365
2018		454
Thereafter		498
	$	12,389