Annual report pursuant to Section 13 and 15(d)

OTHER BORROWED FUNDS

v2.4.0.8
OTHER BORROWED FUNDS
12 Months Ended
Dec. 31, 2013
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):
 
Principal Terms
 
Advance
Amount
 
      
Range of Maturities
Weighted
Average
Interest Rate
 
December 31, 2013
 
 
 
Single maturity fixed rate advances
 
$
80,000
 
August 2016 to February 2019
   
1.69
%
Amortizable mortgage advances
   
9,991
 
March 2018 to July 2018
   
3.78
%
 
 
$
89,991
 
 
       
 
Principal Terms
 
Advance
Amount
 
      
Range of Maturities
Weighted
Average
Interest Rate
 
December 31, 2012
 
 
 
Single maturity fixed rate advances
 
$
80,000
 
May 2015 to September 2016
   
1.70
%
Amortizable mortgage advances
   
11,822
 
March 2018 to July 2018
   
3.78
%
 
 
$
91,822
 
 
       

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):
 
2014
 
$
1,884
 
2015
   
1,938
 
2016
   
21,996
 
2017
   
2,055
 
2018
   
52,118
 
Thereafter
   
10,000
 
 
 
$
89,991
 
 
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.