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Borrowings and Borrowings Availability

12 Months Ended

Dec. 31, 2011

Borrowings And Borrowings Availability

Note 10. Borrowings and Borrowings Availability

The following tables present information regarding the Company’s outstanding borrowings at December 31, 2011 and 2010:

Description - 2011	Due date	Call Feature	2011 Amount		Interest Rate

FHLB Term Note	4/20/12	Quarterly by FHLB, beginning 4/20/09	$	7,500,000	4.51% fixed

FHLB Term Note	6/28/12	None		15,000,000	0.69% fixed

FHLB Term Note	12/28/12	None		7,500,000	0.91% fixed

FHLB Term Note	6/28/2013	None		15,000,000	0.72% fixed

FHLB Term Note	12/30/13	None		7,500,000	1.50% fixed

FHLB Term Note	1/13/14	None		20,000,000	1.38% fixed

FHLB Term Note	6/30/14	None		15,000,000	1.21% fixed

Trust Preferred Securities	1/23/34	Quarterly by Company beginning 1/23/09		20,620,000	3.13% at 12/31/11 adjustable rate 3 month LIBOR + 2.70%

Trust Preferred Securities	6/15/36	Quarterly by Company beginning 6/15/11		25,774,000	1.94% at 12/31/11 adjustable rate 3 month LIBOR + 1.39%
Total borrowings/ weighted average rate				133,894,000	1.74%

Unamortized fair market value adjustment recorded in acquisition				31,000
Total borrowings as of December 31, 2011			$	133,925,000

Description - 2010	Due date	Call Feature	2010 Amount		Interest Rate

FHLB Overnight Borrowings	1/1/11, renewable daily	None	$	20,000,000	0.47% subject to change daily

Federal Funds Purchased	1/1/11, renewable daily	None		33,000,000	0.65% subject to change daily

Line of Credit with Federal Reserve Bank	1/1/11, renewable daily	None		55,000,000	0.75% subject to change daily

FHLB Term Note	8/1/11	None		3,000,000	0.29% at 12/31/10 Adjustable rate based on 3 month LIBOR

FHLB Term Note	12/12/11	Quarterly by FHLB, beginning 6/12/08		1,800,000	4.21% fixed

FHLB Term Note	4/20/12	Quarterly by FHLB, beginning 4/20/09		7,500,000	4.51% fixed

FHLB Term Note	6/28/12	None		15,000,000	0.69% fixed

FHLB Term Note	12/28/12	None		7,500,000	0.91% fixed

FHLB Term Note	12/30/13	None		7,500,000	1.50% fixed

Trust Preferred Securities	1/23/34	Quarterly by Company beginning 1/23/09		20,620,000	2.99% at 12/31/10 adjustable rate 3 month LIBOR + 2.70%

Trust Preferred Securities	6/15/36	Quarterly by Company beginning 6/15/11		25,774,000	1.69% at 12/31/10 adjustable rate 3 month LIBOR + 1.39%

Total borrowings/ weighted average rate				196,694,000	1.26% (1.98% excluding overnight borrowings)

Unamortized fair market value adjustment recorded in acquisition				176,000
Total borrowings as of December 31, 2010			$	196,870,000

As noted in the table above, at December 31, 2011 and 2010, borrowings outstanding included $31,000 and $176,000, respectively, in unamortized premium on borrowings acquired from a 2008 acquisition. The originally recorded premium was $1,328,000, of which $145,000, $341,000, and $464,000 was amortized in 2011, 2010, and 2009, respectively, as a reduction of interest expense.

All outstanding FHLB borrowings may be accelerated immediately by the FHLB in certain circumstances, including material adverse changes in the condition of the Company or if the Company’s qualifying collateral amounts to less than that required under the terms of the FHLB borrowing agreement.

In the above tables, the $20.6 million in borrowings due on January 23, 2034 relate to borrowings structured as trust preferred capital securities that were issued by First Bancorp Capital Trusts II and III ($10.3 million by each trust), which are unconsolidated subsidiaries of the Company, on December 19, 2003 and qualify as capital for regulatory capital adequacy requirements. These unsecured debt securities are callable by the Company at par on any quarterly interest payment date beginning on January 23, 2009. The interest rate on these debt securities adjusts on a quarterly basis at a rate of three-month LIBOR plus 2.70%. The Company incurred approximately $580,000 of debt issuance costs related to the issuance that were recorded as prepaid expenses and are included in the “Other Assets” line item of the consolidated balance sheet. These debt issuance costs were amortized as interest expense until the earliest possible call date of January 23, 2009.

In the above tables, the $25.8 million in borrowings due on June 15, 2036 relate to borrowings structured as trust preferred capital securities that were issued by First Bancorp Capital Trust IV, an unconsolidated subsidiary of the Company, on April 13, 2006 and qualify as capital for regulatory capital adequacy requirements. These unsecured debt securities are callable by the Company at par on any quarterly interest payment date beginning on June 15, 2011. The interest rate on these debt securities adjusts on a quarterly basis at a rate of three-month LIBOR plus 1.39%. The Company incurred no debt issuance costs related to the issuance.

At December 31, 2011, the Company had four sources of readily available borrowing capacity – 1) an approximately $389 million line of credit with the FHLB, of which $88 million was outstanding at December 31, 2011 and $62 million was outstanding at December 31, 2010, 2) a $50 million overnight federal funds line of credit with a correspondent bank, of which none was outstanding at December 31, 2011 and $33 million was outstanding at December 31, 2010, 3) an approximately $79 million line of credit through the Federal Reserve Bank of Richmond’s (FRB) discount window, of which none was outstanding at December 31, 2011 and $55 million was outstanding at December 31, 2010, and 4) a $10 million holding company line of credit with a commercial bank, of which none was outstanding at December 31, 2011 or 2010.

The Company’s line of credit with the FHLB totaling approximately $389 million can be structured as either short-term or long-term borrowings, depending on the particular funding or liquidity needs and is secured by the Company’s FHLB stock and a blanket lien on most of its real estate loan portfolio. In addition to the outstanding borrowings from the FHLB that reduce the available borrowing capacity of the line of credit, the borrowing capacity was further reduced by $203 million at December 31, 2011 and 2010, as a result of the Company pledging letters of credit for public deposits at each of those dates. Accordingly, the Company’s unused FHLB line of credit was $98 million at December 31, 2011.

The Company’s correspondent bank relationship allows the Company to purchase up to $50 million in federal funds on an overnight, unsecured basis (federal funds purchased). The Company had no borrowings outstanding under this line at December 31, 2011 and $33 million in borrowings outstanding at December 31, 2010.

The Company has a line of credit with the FRB discount window. This line is secured by a blanket lien on a portion of the Company’s commercial and consumer loan portfolio (excluding real estate). Based on the collateral owned by the Company as of December 31, 2011, the available line of credit was approximately $79 million. The Company had no borrowings outstanding under this line of credit at December 31, 2011 and $55 million in borrowings outstanding at December 31, 2010.

At December 31, 2011 and 2010, the Company had a $10 million line of credit with a correspondent bank that was secured by 100% of the common stock of the Bank. This line of credit expires and is subject to renewal in March of each year. The line of credit was not drawn at December 31, 2011 or 2010.