Quarterly report pursuant to Section 13 or 15(d)

OTHER BORROWED FUNDS

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OTHER BORROWED FUNDS
 9 Months Ended
Sep. 30, 2013
OTHER BORROWED FUNDS [Abstract]  
OTHER BORROWED FUNDS
NOTE 7 - 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 period-end, advances from the Federal Home Loan Bank were as follows (dollars in thousands):

 
  
 
    
Weighted
  
 
Advance
  
 
Average
  
Principal Terms
Amount
  
Range of Maturities
Interest Rate
  
September 30, 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
  
 
        
 
 
  
 
    
Weighted
  
 
Advance
  
 
Average
  
Principal Terms
Amount
  
Range of Maturities
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 $416,405,000 and $413,482,000 under a blanket lien arrangement at September 30, 2013 and December 31, 2012, respectively.

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.

Scheduled repayments of FHLB advances as of September 30, 2013 were as follows (in thousands):

2013
  
$
---
  
2014
    
1,884
  
2015
    
1,938
  
2016
    
21,996
  
2017
    
2,055
  
Thereafter
    
62,118
  
 
  
$
89,991
  

Federal Reserve Bank Borrowings

The Company has a financing arrangement with the Federal Reserve Bank.  There were no borrowings outstanding at September 30, 2013 and December 31, 2012, and the Company had approximately $27.7 million and $30.3 million in unused borrowing capacity based on commercial and mortgage loans pledged to the Federal Reserve Bank totaling $33.2 million and $37.2 million at September 30, 2013 and December 31, 2012, respectively.