10. Borrowings

Borrowings included $1,248 of demand notes payable to the U.S. Treasury Department at December 31, 2010. There were no such borrowings at December 31, 2011 since these notes are no longer issued under the U.S. Treasury Department's program of investing the treasury tax and loan account balances in interest bearing demand notes insured by depository institutions.

The Corporation has available one $9 million line of credit with an unaffiliated institution, with a floating rate of 30 day LIBOR plus 180 basis points and a floor of 3.50%, which was in effect at both December 31, 2011 and 2010. There were no borrowings on the line at December 31, 2011 and 2010.

FHLB Borrowings

At December 31, 2011, the Bank had remaining borrowing capacity with the FHLB of $444,128. At December 31, 2011, borrowings with the FHLB are secured by a blanket pledge of selected securities in the amount of $198,287 and certain loans with a balance of $497,563 at December 31, 2011. Borrowings from the FHLB at December 31, 2011 and 2010 are as follows:


Interest Rate	Maturity		2011		2010
(a)		01/31/11	$	–	$	4,750
(b)		09/17/15		20,000		20,000
(c)		06/01/17		10,000		10,000
(d)		08/07/17		5,000		5,000
(e)		08/07/17		5,000		5,000
(f)		08/07/17		10,000		10,000
(g)		10/10/17		10,000		10,000
(h)		07/07/23		700		700
(i)		09/05/23		2,491		2,591
(j)		06/11/24		578		598
(k)		05/24/26		340		–
(l)		10/14/26		347		–


			$	64,456	$	68,639

(a), (b), (h) – Fixed rate borrowings at interest rates of 0.45%, 2.09%, and 4.72%, respectively.

(c) – Interest rate was fixed at 4.60% until June 2009, since which time FHLB has had the option to convert to floating interest rate based on the 3 month LIBOR + 0.16%. The interest rate was 4.60% at December 31, 2011 and 2010.

(d) – Interest rate was fixed at 4.02% until February 2008, since which time FHLB has had the option to convert to a floating interest rate based on the 3 month LIBOR + 0.11%. The interest rate was 4.02% at December 31, 2011 and 2010.

(e) – Interest rate was fixed at 4.10% until August 2008, since which time FHLB has had the option to convert to a floating interest rate based on the 3 month LIBOR + 0.11%. The interest rate was 4.10% at December 31, 2011 and 2010.

(f) – Interest rate is fixed at 4.47% until August 2010, since which time FHLB has had the option to convert to a floating interest rate based on the 3 month LIBOR + 0.11%. The interest rate was 4.47% at December 31, 2011 and 2010.

(g) – Interest rate was fixed at 3.97% until October 2009, since which time FHLB has had the option to convert to a floating interest rate based on the 3 month LIBOR + 0.10%. The interest rate was 3.97% at December 31, 2011 and 2010.

(i) – Fixed rate borrowing at an interest rate of 4.31%, with monthly principal and interest payments and a balloon payment due at maturity.

(j) – Fixed rate borrowing at an interest rate of 5.24%, with monthly principal and interest payments and a balloon payment due at maturity.

(k) – Fixed rate borrowing at an interest rate of 3.35%, with monthly principal and interest payments.

(l) – Fixed rate borrowing at an interest rate of 4.00%, with monthly principal and interest payments.

The terms of borrowings (a) through (h) are interest only payments with principal due at maturity.

Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances.

Other Borrowings

At December 31, 2010, the Bank had outstanding borrowings of $18,000 and $8,620 from two unaffiliated institutions under overnight borrowing agreements. The interest rate on these borrowings were 0.25% and 0.50%. The Bank had no overnight borrowings at December 31, 2011.

The Bank entered into a borrowing transaction with an unaffiliated institution in March 2007. The proceeds of this borrowing were $10,000 and, as part of this transaction, the Bank pledged certain securities which had a carrying amount of $14,179 at December 31, 2011. The borrowing has a maturity date of March 20, 2017 and a variable interest rate of 3 month LIBOR minus 1.0% through March 20, 2008, at which time the interest rate became fixed as defined. The borrowing is callable by the issuer at the end of each quarter until maturity. The interest rate was 5.25% at December 31, 2011 and 2010, which will be the interest rate through the term of the borrowing.

Holiday entered into an unsecured line of credit facility with an unaffiliated institution having a maximum borrowing capacity of $15,000. Each separate borrowing under the facility bears interest at a floating rate determined at the time of the borrowing, as defined in the agreement governing the facility. As of December 31, 2011 and 2010, there were no borrowings under the agreement.

Subordinated Debentures

In 2007, the Corporation issued two $10,000 floating rate trust preferred securities as part of a pooled offering of such securities. The interest rate on each offering is determined quarterly and floats based on the 3 month LIBOR plus 1.55% and was 2.10% and 1.85% at December 31, 2011 and 2010, respectively. The Corporation issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The subordinated debentures must be redeemed no later than 2037. The Corporation may redeem the debentures, in whole or in part, at face value after June 15, 2012 for the first offering and September 15, 2012 for the second offering. The Corporation has the option to defer interest payments from time to time for a period not to exceed five consecutive years.

Although the trusts are variable interest entities, the Corporation is not the primary beneficiary. As a result, because the trusts are not consolidated with the Corporation, the Corporation does not report the securities issued by the trusts as liabilities. Instead, the Corporation reports as liabilities the subordinated debentures issued by the Corporation and held by the trusts, since the liabilities are not eliminated in consolidation.

Maturity Schedule of All Borrowed Funds

The following is a schedule of maturities of all borrowed funds as of December 31, 2011:


2012	$	162
2013		167
2014		175
2015		20,183
2016		191
Thereafter		74,198


Total borrowed funds	$	95,076