10. Borrowings

Other Borrowed Funds

Short-term borrowings consist of retail repurchase agreements, FHLBB overnight borrowings and line of credit advances, correspondent bank overnight borrowings, and treasury, tax and loan deposits that are due within one year from the origination date. The Company, through its bank subsidiary, had an available line of credit with the FHLBB of $9.9 million at December 31, 2012 and 2011. The Company had no outstanding balance on the line of credit with the FHLBB at December 31, 2012 and 2011. Long-term borrowings represent securities sold under repurchase agreements with major brokerage firms and notes payable with maturity dates over one year. Both wholesale and retail repurchase agreements are secured by mortgage-backed securities and securities of government sponsored enterprises. The Company has $10.0 million in lines of credit with a maturity date of December 20, 2013.

The following table summarizes other borrowed funds outstanding at December 31:

	2012		2011
Short-term Borrowings
Securities sold under repurchase agreements - retail	$	151,035	$	144,228
FHLBB and correspondent bank overnight borrowings		41,500		58,700
Total short-term borrowings		192,535		202,928
Long-term Borrowings
Securities sold under repurchase agreements - commercial		66,187		71,243
Notes payable		117		360
Capital lease obligation		1,101		1,125
Total long-term borrowings		67,405		72,728
Total other borrowed funds	$	259,940	$	275,656

Information on the amounts outstanding and interest rates of short-term borrowings for each of the three years in the period ended December 31 are as follows:

	2012			2011			2010
Balance outstanding at end of year	$	192,535		$	202,928		$	193,930
Average daily balance outstanding	$	188,630		$	202,423		$	188,663
Maximum balance outstanding at any month end	$	232,008		$	287,334		$	268,197
Weighted average interest rate for the year		0.30	%		0.35	%		0.63	%
Weighted average interest rate at end of year		0.18	%		0.22	%		0.45	%

The securities sold under repurchase agreements - commercial are fixed rate borrowings, which are callable quarterly, with the following schedule of maturities, rate and year in which the instrument became or becomes callable, as of December 31, 2012:

	Amount		Rate			Callable
2013	$	36,000		3.33	%		-
2016		25,000		2.61	%		2013
2017		5,187		4.67	%		2013
Total	$	66,187		3.16	%

Federal Home Loan Bank Advances

FHLB advances are collateralized by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one- to four-family properties, certain commercial real estate loans, certain pledged investment securities and other qualified assets. The carrying value of residential real estate and commercial loans pledged as collateral was $671.5 million and $698.8 million at December 31, 2012 and 2011, respectively. The carrying value of securities pledged as collateral at the FHLB was $6.7 million and $8.3 million at December 31, 2012 and 2011, respectively.

The advances payable to the FHLB are summarized as follows:

	December 31, 2012				December 31, 2011
	Total Outstanding		Callable		Total Outstanding		Callable
Fixed Rate:
0.15% - 7.23% due in 2012	$	-	$	-	$	45,090	$	-
0.28% - 6.15% due in 2013		222		-		5,523		5,000
2.71% - 3.35% due in 2014		-		-		20,000		10,000
2.75% - 4.75% due in 2015		11,182		10,000		16,247		10,000
1.80% - 2.91% due in 2016		25,000		-		30,000		-
3.99% - 4.06% due in 2017		20,000		20,000		20,000		20,000
Total FHLB advances	$	56,404	$	30,000	$	136,860	$	45,000

Junior Subordinated Debentures

In April 2006, the Company formed Camden Capital Trust A ("CCTA"), which issued and sold trust preferred securities to the public. The Company received $36.1 million from the issuance of the trust preferred securities in return for junior subordinated debentures issued by the Company to CCTA. The Company owns all of the $1.1 million of outstanding common securities of CCTA. The interest rate of the trust preferred securities was fixed at 6.71% through June 2011 and now floats at the 3 month London Interbank Offered Rate ("LIBOR") plus 140 basis points. The proceeds from the offering were used to repurchase Company common stock under the tender offer completed in May 2006. The trust preferred securities, which pay interest quarterly at the same rate as the junior subordinated debentures held by CCTA, are mandatorily redeemable on June 30, 2036, or may be redeemed by CCTA at par any time on or after June 30, 2011.

In connection with the acquisition of Union Bankshares Company in 2008, the Company assumed $8.0 million of trust preferred securities, held through a Delaware trust affiliate, Union Bankshares Capital Trust I ("UBCT"). In 2006, Union Bankshares Company issued an aggregate principal amount of $8.2 million of 30-year junior subordinated deferrable interest debt securities to UBCT. The Company owns all of the $248,000 of outstanding common securities of UBCT. The debt securities obligate the Company to pay interest on their principal sum quarterly in arrears on January 7, April 7, July 7, and October 7 of each year. The interest rate of the trust preferred securities until April 7, 2011 was a blended rate equal to the sum of (1) the product of 50% times the average three-month LIBOR plus 1.42%, plus (2) the product of 50% times 6.4725%. The rate is now the average three-month LIBOR plus 1.42%. The debt securities mature on April 7, 2036, but may be redeemed by the Company, in whole or in part, beginning on April 7, 2011, on any interest payment date. The debt securities may also be redeemed by the Company in whole or in part, within 90 days of the occurrence of certain special redemption events as defined in the Indenture.

CCTA and UBCT are Delaware statutory trusts created for the sole purpose of issuing trust preferred securities and investing the proceeds in junior subordinated debentures of the Company. The junior subordinated debentures are the sole assets of the trusts. The Company is the owner of all of the common securities of CCTA and UBCT and fully and unconditionally guarantees each trust's securities obligations. In accordance with GAAP, CCTA and UBCT are treated as unconsolidated subsidiaries. The common stock investment in the statutory trusts is included in "Other Assets" in the Consolidated Statements of Condition. Interest expense on the junior subordinated debentures totaled $2.5 million during 2012, $2.6 million during 2011 and $2.8 million during 2010. At December 31, 2012, $43.0 million of the trust preferred securities were included in the Company's total Tier 1 capital and amounted to 19.5% of Tier 1 capital of the Company.

The Company has a notional amount of $43.0 million in interest rate swap agreements on its junior subordinated debentures. The Company swapped the variable cost for a fixed cost and the terms of the interest rate swap agreements are as follows:

Notional Amount	Fixed Cost			Maturity Date
$10,000		5.09	%		June 30, 2021
10,000		5.84	%		June 30, 2029
10,000		5.71	%		June 30, 2030
5,000		4.35	%		March 30, 2031
8,000		4.14	%		July 7, 2031

The fair value of the swap agreements on its junior subordinated debentures at December 31, 2012 was a liability of $11.1 million and, as this instrument qualifies as a highly effective cash flow hedge, the change in fair value was recorded in other comprehensive income, net of tax, and other liabilities. In connection with the interest rate swap agreements and the liability position, the Company has posted $13.0 million of cash held as collateral with counterparties at December 31, 2012.

The Company has a notional amount of $8.1 million in interest rate swap agreements with commercial customers and interest rate swap agreements of equal notional amounts with a dealer bank related to the Company's commercial loan level derivative program. As the two swap agreements have substantially equivalent and offsetting terms, they do not materially change the Company's interest rate risk.