BORROWED FUNDS (Note 11)

Short-term borrowings at December 31, 2011 and 2010 consisted of the following:


	2011		2010
	(in thousands)
Securities sold under agreements to repurchase	$	212,849	$	183,295
Treasury tax and loan		—		9,023

Total short-term borrowings	$	212,849	$	192,318

The weighted average interest rate for short-term borrowings was 0.25 percent and 0.45 percent at December 31, 2011 and 2010, respectively.

Long-term borrowings at December 31, 2011 and 2010 consisted of the following:


	2011		2010
	(in thousands)
FHLB advances	$	2,036,690	$	2,176,665
Securities sold under agreements to repurchase		587,500		655,000
Subordinated debt		100,000		100,000
Other		1,909		2,193

Total long-term borrowings	$	2,726,099	$	2,933,858

The long-term FHLB advances had a weighted average interest rate of 3.91 percent and 4.15 percent at December 31, 2011 and 2010, respectively. These FHLB advances are secured by pledges of certain eligible collateral, including but not limited to U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans. Interest expense recorded on FHLB advances totaled $86.6 million, $91.5 million, and $93.7 million for the years ended December 31, 2011, 2010 and 2009, respectively.

The long-term FHLB advances at December 31, 2011 are scheduled for repayment as follows:


Year	Amount
	(in thousands)
2012	$	28,319
2013		26,102
2014		102
2015		175,102
2016		182,101
Thereafter		1,624,964

Total long-term FHLB advances	$	2,036,690

The majority of the long-term advances are callable by FHLB for redemption prior to their scheduled maturity date. Advances with scheduled maturities beyond 2016 reported in the table above include $1.1 billion in advances which are callable during 2012 and have interest rates ranging from 2.27 percent to 4.76 percent.

During the fourth quarter of 2011, Valley modified the terms of $435 million in FHLB advances within its long-term borrowings. The modifications resulted in a reduction of the interest rates on these funds, an extension of their maturity dates to 10 years from the date of modification, and a conversion of the advances to non-callable for periods ranging from 3 to 4 years. Valley similarly modified the terms of an additional $150 million in FHLB advances during January 2012. After the modifications, the weighted average interest rate on these borrowings declined by 0.86 percent to 3.99 percent. There were no gains, losses, penalties or fees incurred in the modification transactions.

The long-term borrowings for securities sold under repurchase agreements to FHLB and other counterparties totaled $587.5 million and $655 million at December 31, 2011 and 2010, respectively. The weighted average interest rate of these long-term borrowings was 4.18 percent and 4.27 percent at December 31, 2011 and 2010, respectively. Interest expense on long-term securities sold under repurchase agreements amounted to $25.0 million, $28.3 million, and $28.9 million during the years ended December 31, 2011, 2010 and 2009, respectively.

The long-term borrowings for securities sold under agreements to repurchase at December 31, 2011 are scheduled for repayment as follows:


Year	Amount
	(in thousands)
2015	$	125,000
2016		142,500
Thereafter		320,000

Total long-term borrowings for securities sold under agreements to repurchase	$	587,500

In 2005, the Bank issued $100 million of 5.0 percent subordinated notes due July 15, 2015 with no call dates or prepayments allowed. Interest on the subordinated notes is payable semi-annually in arrears at an annual rate of 5.0 percent on January 15 and July 15 of each year.

The fair value of securities pledged to secure public deposits, repurchase agreements, lines of credit, FHLB advances and for other purposes required by law approximated $1.5 billion at December 31, 2011 and 2010.