NOTE 8. Borrowings

The Company, through its subsidiary bank, borrows funds in the form of federal funds purchased, securities sold under agreements to repurchase and Federal Home Loan Bank advances.

Federal fund lines of credit are extended to the Bank by nonaffiliated banks with which a correspondent banking relationship exists. The line of credit amount is determined by the creditworthiness of the Bank and, in particular, its regulatory capital ratios, which are discussed in Note 16. Federal funds purchased generally mature each business day. The following table summarizes information related to federal funds purchased for the years ended December 31, 2011 and 2010:


	December 31,
		2011			2010
		(dollars in thousands)
Balance at year-end	$	-		$	-
Average balance during the year		85			503
Average interest rate during the year		0.54	%		0.70	%
Maximum month-end balance during the year	$	1,945		$	4,680
Gross lines of credit at year-end		36,000			36,000
Unused lines of credit at year-end		36,000			36,000

Securities sold under agreements to repurchase are borrowings in which the Bank obtains funds by selling securities and simultaneously agreeing to repurchase the securities for an agreed upon term at a given price which includes interest. The Company had $0 in funds from certain customers through retail repurchase agreements at December 31, 2011. Generally, the term for retail repurchase agreements is the next business day. The Company had $10,000,000 in funds from a larger financial institution through a wholesale repurchase agreement at December 31, 2011. The original term of this wholesale repurchase agreement, which was executed during 2008, was five years and the counterparty has the option to call the debt after three years. The amount of borrowings through securities sold under agreements to repurchase is restricted by the amount of securities which are designated for these transactions. The following table summarizes information related to securities sold under agreement to repurchase for the years ended December 31, 2011 and 2010:


	December 31,
		2011			2010
		(dollars in thousands)
Balance at year-end	$	10,000		$	14,395
Average balance during the year		12,416			14,971
Average interest rate during the year		2.93	%		2.56	%
Maximum month-end balance during the year	$	14,050		$	15,552
Securities underlying the agreements at year-end:
Carrying value		12,150			19,198
Fair value		12,918			19,667

The Bank had a $112,990,000 line of credit with the Federal Home Loan Bank of Atlanta which was secured by a blanket lien on the loan portfolio at December 31, 2011. The Company had $42,250,000 in advances outstanding at December 31, 2011 (see details below); therefore, the unused line of credit totaled $70,740,000. Advances bear interest at a fixed or floating rate depending on the terms and maturity of each advance and numerous renewal options are available to the Company.

The Company had $20,000,000 in short-term borrowings with the FHLB at December 31, 2011. The weighted average interest rate on outstanding short-term advances at December 31, 2011 was 3.55%.

The Company had $22,250,000 in long-term borrowings with the FHLB at December 31, 2011, which matures as follows: $2,250,000 in 2014 and $20,000,000 in 2015. The interest rates on the outstanding long-term advances at December 31, 2011 ranged from 3.02% to 4.07%. The weighted average interest rate on outstanding long-term advances at December 31, 2011 was 3.50%.