Note 10 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase

Information regarding securities sold under agreements to repurchase and Federal funds purchased for the years ended December 31, is detailed in the following tables:

Securities sold under agreements to repurchase (“repurchase agreements”) are secured borrowings that typically mature within thirty to ninety days, although the Company has entered into repurchase agreements with the Federal Home Loan Bank (“FHLB”) with maturities that extend through 2017. The Company uses both retail and wholesale repurchase agreements. Retail repurchase agreements are arrangements with local customers of the Company, in which the Company agrees to sell securities to the customer with an agreement to repurchase those securities at a specified later date. Retail repurchase agreements totaled $55.3 million at December 31, 2013. At December 31, 2013, the Company had $112.4 million in wholesale repurchase agreements, with maturities of over one year. Of this $112.4 million in wholesale repurchase agreements, $80.0 million were with the Federal Home Loan Bank of New York and $32.4 million were with one large financial institution. Repurchase agreements with maturities due within one year are $25.0 million. Repurchase agreements with maturities over one year include $16.1 million in 2015, $61.2 million in 2016, and $10.0 million in 2017.

Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. The Company may be required to provide additional collateral based on the fair value of the underlying securities.

During 2012, the Company prepaid $85.6 million of wholesale repurchase agreements with a money center bank. The Company incurred a net prepayment penalty of $369,000 which is included in “Other Operating Expenses” on the Company’s Consolidated Statements of Income.

Federal funds purchased are short-term borrowings that typically mature within one to ninety days.