Borrowings

Federal Home Loan Bank of Boston Advances

Advances payable to the FHLBB amounted to $494 million at September 30, 2011 and $499 million at December 31, 2010. In connection with the Corporation’s ongoing interest rate risk management efforts, in May 2011, the Corporation modified the terms to extend the maturity dates of $10 million of its FHLBB advances with original maturity dates in 2012. During the second quarter of 2011, the Corporation also prepaid $5 million in advances payable to the FHLBB resulting in a debt prepayment penalty charge, recorded in noninterest expense, of $221 thousand. During the third quarter of 2011, the Corporation modified the terms to extend the maturity dates of an additional $128 million of its FHLBB advances with original maturity dates in 2012, 2013 and 2014. The following table presents maturities and weighted average interest rates paid on FHLBB advances outstanding at September 30, 2011:



(Dollars in thousands)	Scheduled Maturity		Redeemed at Call Date (1)		Weighted Average Rate (2)
October 1, 2011 through December 31, 2011:	$	52,148	$	57,148	0.80%
2012	38,011		38,011		3.54%
2013	61,160		56,160		3.24%
2014	115,533		115,533		3.53%
2015	138,333		138,333		3.47%
2016	45,100		45,100		4.33%
2017 and after	43,813		43,813		4.95%
Total	$	494,098	$	494,098


(1)	Callable FHLBB advances are shown in the respective periods assuming that the callable debt is redeemed at the call date while all other advances are shown in the periods corresponding to their scheduled maturity date.

(2) Weighted average rate based on scheduled maturity dates.

In addition to the outstanding advances, the Bank also has access to an unused line of credit with the FHLBB amounting to $8.0 million at September 30, 2011. Under agreement with the FHLBB, the Bank is required to maintain qualified collateral, free and clear of liens, pledges, or encumbrances that, based on certain percentages of book and fair values, has a value equal to the aggregate amount of the line of credit and outstanding advances. The FHLBB maintains a security interest in various assets of the Corporation including, but not limited to, residential mortgage loans, commercial mortgages and other commercial loans, U.S. government agency securities, U.S. government-sponsored enterprise securities, and amounts maintained on deposit at the FHLBB. The Corporation maintained qualified collateral in excess of the amount required to collateralize the line of credit and outstanding advances at September 30, 2011. Included in the collateral were securities available for sale with a fair value of $282 million and $274 million, respectively, which were specifically pledged to secure FHLBB borrowings at September 30, 2011 and December 31, 2010. See Note 5 for discussion on loans pledged as collateral for FHLBB borrowings. Unless there is an event of default under the agreement, the Corporation may use, encumber or dispose any portion of the collateral in excess of the amount required to secure FHLBB borrowings, except for that collateral which has been specifically pledged.