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OTHER BORROWED FUNDS
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Dec. 31, 2013
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| OTHER BORROWED FUNDS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER BORROWED FUNDS |
NOTE 8 - OTHER BORROWED FUNDS
Other borrowed funds include advances from the Federal Home Loan Bank and borrowings from the Federal Reserve Bank.
Federal Home Loan Bank Advances
At year-end, advances from the Federal Home Loan Bank were as follows (dollars in thousands):
Each advance is subject to a prepayment fee if paid prior to its maturity date. Fixed rate advances are payable at maturity. Amortizable mortgage advances are fixed rate advances with scheduled repayments based upon amortization to maturity. These advances were collateralized by residential and commercial real estate loans totaling $411,715,000 and $413,482,000 under a blanket lien arrangement at December 31, 2013 and 2012.
During the second quarter of 2013, the Bank modified the terms of six of its existing FHLB advances (totaling $60.0 million) having the effect of extending the weighted average maturity for all outstanding advances from 3.22 years to 4.86 years and reducing the weighted average interest rate from 1.95% to 1.94%. As the modifications did not result in the terms being substantially different (as defined in ASC 470-50-40-10), the transaction was accounted for as a modification, not extinguishment of debt. Accordingly, the prepayment fees incurred are amortized as an adjustment of the yield over the remaining life of each advance.
During the third quarter of 2012, advances totaling $20.0 million were paid off early, resulting in a prepayment fee of $322,000, which is included in other expense for the year ended December 31, 2012.
Scheduled repayments of FHLB advances as of December 31, 2013 were as follows (in thousands):
Federal Reserve Bank Borrowings
The Company has a financing arrangement with the Federal Reserve Bank. There were no borrowings outstanding at December 31, 2013 and 2012, and the Company had approximately $22.7 million and $30.3 million in unused borrowing capacity based on commercial and mortgage loans pledged to the Federal Reserve Bank totaling $26.6 million and $37.2 million at December 31, 2013 and 2012, respectively.
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