Borrowings

Federal Home Loan Bank Advances

Advances payable to the FHLBB amounted to $361.2 million at December 31, 2012 and $540.5 million at December 31, 2011. The following table presents maturities and weighted average interest rates paid on FHLBB advances outstanding at December 31, 2012 and 2011:



(Dollars in thousands)	December 31, 2012						December 31, 2011
	Scheduled Maturity		Redeemed at Call Date (1)		Weighted Average Rate (2)		Scheduled Maturity		Redeemed at Call Date (1)		Weighted Average Rate (2)
2012								$138,965		$143,965	1.07	%
2013		$48,630		$48,630	0.81	%	44,757		39,757		3.36	%
2014	2,519		2,519		3.54	%	88,109		88,109		3.54	%
2015	79,069		79,069		3.63	%	132,682		132,682		3.54	%
2016	85,066		85,066		3.05	%	92,124		92,124		3.66	%
2017	80,335		80,335		2.94	%	5,849		5,849		5.57	%
2018 and thereafter	65,553		65,553		4.58	%	37,964		37,964		4.86	%
		$361,172		$361,172	3.13	%		$540,450		$540,450	3.03	%


(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 2012, in connection with the Corporation’s ongoing interest rate risk management efforts, FHLBB advances totaling $113.0 million were modified to lower interest rates and extend the maturities of these advances. Original maturity dates ranging from 2014 to 2020 were modified to 2016 to 2019. The Corporation also prepaid FHLBB advances totaling $86.2 million during 2012 and incurred a prepayment penalty of $3.9 million which was recorded in non-interest expenses.

In February 2013, the Corporation modified the terms to extend the maturity dates of $72.5 million of its FHLBB advances with original maturity dates in 2015. The table below presents the original and revised terms associated with these FHLBB advances as of December 31, 2012.



(Dollars in thousands)	Original Terms			Revised Terms
	Scheduled Maturity	Weighted Average Rate (1)		Scheduled Maturity	Weighted Average Rate (1)
2015	72,500	3.68	%	—	—	%
2016	—	—	%	—	—	%
2017	—	—	%	10,000	2.71	%
2018	—	—	%	47,500	3.12	%
2019	—	—	%	15,000	3.25	%
	72,500	3.68	%	72,500	3.09	%

(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, 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 $225.6 million and $320.8 million, respectively, at December 31, 2012 and 2011. Also included in the collateral specifically pledged to secure FHLBB borrowings were loans of $1.1 billion and $911.5 million, respectively, at December 31, 2012 and 2011. The Corporation maintained qualified collateral in excess of the amount required to collateralize the line of credit and outstanding advances at December 31, 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.

Advances payable to FHLBB include short-term advances with original maturity due dates of one year or less. The following table sets forth certain information concerning short-term FHLBB advances as of the dates and for the years indicated:



(Dollars in thousands)
As of and for the years ended December 31,	2012			2011			2010
Average amount outstanding during the period		$61,936			$36,870			$10,316
Amount outstanding at end of period	40,500			102,500			20,000
Highest month end balance during period	102,929			105,500			57,500
Weighted-average interest rate at end of period	0.28		%	0.18		%	0.35		%
Weighted-average interest rate during the period	0.27		%	0.23		%	0.29		%

Junior Subordinated Debentures

Junior subordinated debentures amounted to $33.0 million at December 31, 2012 and 2011.

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,	2012		2011
Securities sold under repurchase agreements		$—		$19,500
Other	1,212		258
Other borrowings		$1,212		$19,758

Securities sold under repurchase agreements amounted to $19.5 million at December 31, 2011. The securities sold under agreements to repurchase 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.