Borrowings

Federal Home Loan Bank Advances

Advances payable to the FHLBB amounted to $540.5 million at December 31, 2011 and $498.7 million at December 31, 2010. In connection with the Corporation's ongoing interest rate risk management efforts, in January 2011, the Corporation modified the terms to extend the maturity dates of $15.1 million of its FHLBB advances with original maturity dates in 2012 and 2013. In May 2011, the Corporation modified the terms to extend the maturity dates of $10.3 million of its FHLBB advances with original maturity dates in 2012. Also in May 2011, a balance sheet management transaction was conducted, which consisted of the sale of $5.7 million in mortgage-backed securities and the prepayment of $5.0 million in FHLBB advances. As a result, $226 thousand of net realized gains on securities and a $221 thousand debt prepayment penalty charge were recognized. In July 2011, the Corporation modified the terms to extend the maturity dates of $34.0 million of its FHLBB advances with original maturity dates in 2013. In September 2011, the Corporation modified the terms to extend the maturity dates of $94.4 million of its FHLBB advances with original maturity dates in 2012, 2013, and 2014. Another balance sheet management transaction was conducted in December 2011 that included the sale of $4.0 million in mortgage-backed securities and prepayment of $4.0 million in FHLBB advances. The transaction resulted in net realized gains on securities of $142 thousand and $473 thousand of debt prepayment penalty expense.

The following table presents maturities and weighted average interest rates paid on FHLBB advances outstanding at December 31, 2011 and 2010:



(Dollars in thousands)	December 31, 2011						December 31, 2010
	Scheduled Maturity		Redeemed at Call Date (1)		Weighted Average Rate (2)		Scheduled Maturity		Redeemed at Call Date (1)		Weighted Average Rate (2)
2011		$—		$—	—	%		$54,039		$59,039	3.06	%
2012	138,965		143,965		1.07	%	59,865		59,865		3.59	%
2013	44,757		39,757		3.36	%	162,034		157,034		3.90	%
2014	88,109		88,109		3.54	%	68,562		68,562		3.99	%
2015	132,682		132,682		3.54	%	90,310		90,310		3.85	%
2016	92,124		92,124		3.66	%	20,100		20,100		5.33	%
2017 and after	43,813		43,813		4.95	%	43,812		43,812		4.95	%
		$540,450		$540,450				$498,722		$498,722


(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 January 2012, the Corporation modified the terms to extend the maturity dates of $30.1 million of its FHLBB advances with original maturity dates in 2014. The table below presents the original and revised terms associated with these FHLBB advances as of December 31, 2011.



(Dollars in thousands)	Original Terms				Revised Terms
	Scheduled Maturity		Weighted Average Rate (1)		Scheduled Maturity		Weighted Average Rate (1)
2014		$30,059	4.05	%		$—	—	%
2016	—		—	%	4,464		2.57	%
2017	—		—	%	25,595		3.36	%
		$30,059				$30,059


(1)	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 December 31, 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 December 31, 2011. Included in the collateral were securities available for sale with a fair value of $320.8 million and $273.7 million that were specifically pledged to secure FHLBB borrowings at December 31, 2011 and December 31, 2010, respectively. 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.

The following table sets forth certain information concerning short-term FHLBB advances as of the dates for the years indicated:



(Dollars in thousands)
As of and for the years ended December 31,	2011			2010			2009
Average amount outstanding during the period		$36,870			$10,316			$49,808
Amount outstanding at end of period	102,500			20,000			5,000
Highest month end balance during period	105,500			57,500			150,000
Weighted-average interest rate at end of period	0.18		%	0.35		%	0.15		%
Weighted-average interest rate during the period	0.23		%	0.29		%	0.57		%

Junior Subordinated Debentures

Junior subordinated debentures amounted to $33.0 million at December 31, 2011 and 2010.

The Bancorp sponsored the creation of WT Capital Trust I (“Trust I”), WT Capital Trust II (“Trust II”) and Washington Preferred Capital Trust (“Washington Preferred”). Trust I, Trust II and Washington Preferred are Delaware statutory trusts created for the sole purpose of issuing trust preferred securities and investing the proceeds in junior subordinated debentures of the Bancorp. The Bancorp is the owner of all of the common securities of Trust I, Trust II and Washington Preferred. In accordance with GAAP, Trust I, Trust II and Washington Preferred are treated as unconsolidated subsidiaries. The common stock investment in the statutory trusts is included in “Other Assets” in the Consolidated Balance Sheet.

On August 29, 2005, Trust I issued $8.3 million of capital securities (“Trust I Capital Securities”) in a private placement of trust preferred securities. The Trust I Capital Securities mature in September 2035, are redeemable at the Bancorp’s option beginning after five years, and require quarterly distributions by Trust I to the holder of the Trust I Capital Securities, at a rate of 5.965% until September 15, 2010, and thereafter at a rate equal to the three-month LIBOR rate plus 1.45%. The Bancorp has guaranteed the Trust I Capital Securities and, to the extent not paid by Trust I, accrued and unpaid distributions on the Trust I Capital Securities, as well as the redemption price payable to the Trust I Capital Securities holders. The proceeds of the Trust I Capital Securities, along with proceeds from the issuance of common securities by Trust I to the Bancorp, were used to purchase $8.3 million of the Bancorp's junior subordinated deferrable interest notes (the “Trust I Debentures”) and constitute the primary asset of Trust I. Like the Trust I Capital Securities, the Trust I Debentures bear interest at a rate of 5.965% until September 15, 2010, and thereafter at a rate equal to the three-month LIBOR rate plus 1.45%. The Trust I Debentures mature on September 15, 2035, but may be redeemed at par at the Bancorp’s option, subject to the approval of the applicable banking regulator to the extent required under applicable guidelines or policies, at any time on or after September 15, 2010, or upon the occurrence of certain special qualifying events.

On August 29, 2005, Trust II issued $14.4 million of capital securities (“Trust II Capital Securities”) in a private placement of trust preferred securities. The Trust II Capital Securities mature in November 2035, are redeemable at the Bancorp’s option beginning after five years, and require quarterly distributions by Trust II to the holder of the Trust II Capital Securities, at a rate of 5.96% until November 23, 2010, and thereafter at a rate equal to the three-month LIBOR rate plus 1.45%. The Bancorp has guaranteed the Trust II Capital Securities and, to the extent not paid by Trust II, accrued and unpaid distributions on the Trust II Capital Securities, as well as the redemption price payable to the Trust II Capital Securities holders. The proceeds of the Trust II Capital Securities, along with proceeds from the issuance of common securities by Trust II to the Bancorp, were used to purchase $14.4 million of the Bancorp's junior subordinated deferrable interest notes (the “Trust II Debentures”) and constitute the primary asset of Trust II. Like the Trust II Capital Securities, the Trust II Debentures bear interest at a rate of 5.96% until November 23, 2010, and thereafter at a rate equal to the three-month LIBOR rate plus 1.45%. The Trust II Debentures mature on November 23, 2035, but may be redeemed at par at the Bancorp's option, subject to the approval of the applicable banking regulator to the extent required under applicable guidelines or policies, at any time on or after November 23, 2010, or upon the occurrence of certain special qualifying events.

On April 7, 2008, Washington Preferred issued $10.0 million of trust preferred securities (“Capital Securities”) in a private placement to two institutional investors pursuant to an applicable exemption from registration. The Capital Securities mature in June 2038, are redeemable at the Bancorp’s option beginning after five years, and required quarterly distributions by Washington Preferred to the holder of the Capital Securities, at a rate of 6.2275% until June 15, 2008, and reset quarterly thereafter at a rate equal to the three-month LIBOR rate plus 3.50%. The Bancorp has guaranteed the Capital Securities and, to the extent not paid by Washington Preferred, accrued and unpaid distributions on the Capital Securities, as well as the redemption price payable to the Capital Securities holders. The proceeds of the Capital Securities, along with the proceeds of $310 thousand from the issuance of common securities by Washington Preferred to the Bancorp, were used to purchase $10.3 million of the Bancorp's junior subordinated deferrable interest notes (the “Washington Preferred Debentures”) and constitute the primary asset of Washington Preferred. The Bancorp will use the proceeds from the sale of the Washington Preferred Debentures for general corporate purposes. Like the Capital Securities, the Washington Preferred Debentures bear interest at a rate of 6.2275% until June 15, 2008, and reset quarterly thereafter at a rate equal to the three-month LIBOR rate plus 3.50%. The Washington Preferred Debentures mature on June 15, 2038, but may be redeemed at par at the Bancorp’s option, subject to the approval of the applicable banking regulator to the extent required under applicable guidelines or policies, at any time on or after June 15, 2013, or upon the occurrence of certain special qualifying events.

Other Borrowings

The following is a summary of other borrowings:



(Dollars in thousands)
December 31,	2011		2010
Treasury, Tax and Loan demand note balance		$—		$1,207
Securities sold under repurchase agreements	19,500		19,500
Other	258		2,652
Other borrowings		$19,758		$23,359

Securities sold under repurchase agreements amounted to $19.5 million at December 31, 2011 and 2010. The securities sold under agreements to repurchase were executed in March 2007 and mature in March 2012. The securities underlying the agreements are held in safekeeping by the counterparty in the name of the Corporation and are repurchased when the agreement matures. Accordingly, these underlying securities are included in securities available for sale and the obligations to repurchase such securities are reflected as a liability.