Borrowings

Federal Home Loan Bank Advances

Advances payable to the FHLBB amounted to $417.7 million at September 30, 2012 and $540.5 million at December 31, 2011.

In connection with the Corporation's ongoing interest rate risk management efforts, the following balance sheet management transactions have been conducted in 2012: In January 2012, the Corporation modified the terms of $31.1 million of its FHLBB advances with original maturity dates in 2014 into longer terms maturing in 2016 and 2017. In May 2012, the Corporation sold $6.0 million in mortgage-backed securities and prepaid a $5.0 million FHLBB advance with an original maturity date in 2013. The transaction resulted in net realized gains on sales of securities of $217 thousand and debt prepayment penalty expense of $203 thousand. In June 2012, the Corporation prepaid two FHLBB advances totaling $10.0 million with original maturity dates in 2015, resulting in debt prepayment penalty expense of $758 thousand. Also in June 2012, the Corporation modified terms of $36.7 million of its FHLBB advances with original maturity dates in 2014 and 2015 into longer terms maturing in 2017. In September 2012, the Corporation prepaid FHLBB advances totaling $32.4 million with original maturity dates in 2013 and 2014, resulting in debt prepayment penalty expense of $1.2 million. Also in September 2012, the Corporation modified terms of $13.0 million of its FHLBB advances with original maturity dates in 2014 and 2015 into longer terms maturing in 2017.

The following table presents maturities of and weighted average interest rates paid on FHLBB advances outstanding at September 30, 2012.



(Dollars in thousands)	Scheduled Maturity		Redeemed at Call Date (1)		Weighted Average Rate (2)
October 1, 2012 through December 31, 2012		$63,317		$63,317	1.26	%
2013	16,129		16,129		3.10	%
2014	12,850		12,850		3.62	%
2015	109,682		109,682		3.48	%
2016	96,587		96,587		3.61	%
2017 and after	119,110		119,110		3.66	%
		$417,675		$417,675


(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, 2012. 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. Included in the collateral specifically pledged to secure FHLBB borrowings were securities available for sale and held to maturity with a fair value of $284.1 million and $320.8 million, respectively, at September 30, 2012 and December 31, 2011. Also included in the collateral specifically pledged to secure FHLBB borrowings were loans of $1.1 billion and $911.5 million, respectively, at September 30, 2012 and December 31, 2011. The Corporation maintained qualified collateral substantially in excess of the amount required to collateralize the line of credit and outstanding advances at September 30, 2012 for liquidity management purposes. 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.

Other Borrowings

Securities sold under repurchase agreements amounted to $19.5 million at December 31, 2011. The securities sold under repurchase agreements were executed in March 2007 and matured in March 2012. The securities underlying the agreements were held in safekeeping by the counterparty in the name of the Corporation and repurchased at maturity.