HVBC 2016 Annual Report

HV Bancorp, Inc. and Subsidiary Notes to the Consolidated Financial Statements Years Ended June 30, 2017 and 2016 74 Interest expense on deposits for the years ended June 30, 2017 and 2016 is summarized as follows: (Dollars in thousands) 2017 2016 NOW accounts - interest bearing $ 190 $ 50 Money market deposit accounts 89 68 Passbook and statement accounts 103 105 Certificates of deposit 359 426 $ 741 $ 649 6. Borrowings Under terms of its collateral agreement with the FHLB, the Company maintains otherwise unencumbered qualifying assets (principally qualifying 1-4 family residential mortgage loans and U.S. government agency and mortgage-backed securities) in the amount of at least as much as its advances from the FHLB. The Company's FHLB stock is also pledged to secure these advances. The following table details the Company’s fixed rate advances from the FHLB as of June 30, 2017 and 2016: (Dollars in thousands) Maturity Interest Rate 2017 2016 07/18/16 0.91% $ — $ 1,000 07/27/16 0.58% — 10,000 09/26/17 0.93% 3,000 3,000 11/30/17 0.98% — 1,000 11/30/17 1.27% 1,000 1,000 07/16/18 1.41% 1,000 1,000 11/30/18 1.59% 1,000 1,000 06/03/19 1.26% 2,000 2,000 07/18/19 1.19% 1,000 — $ 9,000 $ 20,000 The Company has borrowing facilities with the FHLB, including access to an “Open Repo Plus” line with a maturity up to three months as well as access to advances with maturities up to 30 years. The combined total of the facilities or maximum borrowing capacity (“MBC”) is approximately $67.4 million as of June 30, 2017. The Open Repo Plus line has a maximum limit of up to one half of the MBC. The MBC changes as a function of the Company's qualifying collateral assets, and the amount of funds received may be reduced by additional required purchases of FHLB stock. As of June 30, 2017 and 2016, the Company had no borrowings outstanding under the Open Repo Plus line. The Company had outstanding FHLB advances totaling $9.0 million and $20.0 million as of June 30, 2017 and 2016, respectively. The Company also has available lines of credit of $3.0 million with ACBB and a line equal to 95% of fair value of collateral held by the Federal Reserve Bank (“FRB”), which were $2.4 million at June 30, 2017 and $4.3 million at June 30, 2016. The Company has not borrowed against its credit lines with ACBB and FRB for the years ended June 30, 2017 or 2016. 7. Securities Sold Under Agreement to Repurchase The Bank has entered into overnight repurchase agreements, which are collateralized by mortgage-backed securities and collateralized mortgage obligations, with a carrying value, including accrued interest, of $2.9 million and $3.9 million at June 30, 2017 and 2016, respectively. The fair value of the underlying collateral was $3.7 million and $6.8 million at June 30, 2017 and 2016.