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Borrowings

12 Months Ended

Dec. 31, 2012

10. Borrowings

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, 2012 and 2011. There were no borrowings on the line at December 31, 2012 and 2011.

FHLB Borrowings

At December 31, 2012, the Bank had remaining borrowing capacity with the FHLB of $357,523. At December 31, 2012, borrowings with the FHLB are secured by a blanket pledge of selected securities in the amount of $130,842 and certain loans with a balance of $470,422 at December 31, 2012. Borrowings from the FHLB at December 31, 2012 and 2011 are as follows:


Interest Rate	Maturity		2012		2011
(a)		09/17/15	$	20,000	$	20,000
(b)		06/01/17		10,000		10,000
(c)		08/07/17		5,000		5,000
(d)		08/07/17		5,000		5,000
(e)		08/07/17		10,000		10,000
(f)		10/10/17		10,000		10,000
(g)		07/07/23		700		700
(h)		09/05/23		2,388		2,491
(i)		06/11/24		557		578
(j)		05/24/26		321		340
(k)		10/14/26		330		347


			$	64,296	$	64,456

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

(b) – 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, 2012 and 2011.

(c) – 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, 2012 and 2011.

(d) – 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, 2012 and 2011.

(e) – 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, 2012 and 2011.

(f) – 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, 2012 and 2011.

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

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

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

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

The terms of borrowings (a) through (g) 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, 2012, the Bank had outstanding borrowings of $23,510 from one unaffiliated institution under an overnight borrowing agreement. The interest rate on this borrowing was 0.35%. 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 $12,585 at December 31, 2012. 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, 2012 and 2011, which will be the interest rate through the term of the borrowing.

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 1.86% and 2.10% at December 31, 2012 and 2011, 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 at any time. 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, 2012:


2013	$	23,677
2014		175
2015		20,183
2016		191
2017		50,199
Thereafter		24,001


Total borrowed funds	$	118,426