Federal Home Loan Bank and Federal Reserve Bank Borrowings

FEDERAL HOME LOAN BANK

The Company has entered into borrowing arrangements with the FHLB of Seattle to borrow funds under a short-term floating rate cash management advance program and fixed-term loan agreements. All borrowings are secured by stock of the FHLB, certain pledged available for sale investment securities and a blanket pledge of qualifying loans receivable. At December 31, 2012 FHLB advances were scheduled to mature as follows:



	Federal Home Loan Bank Advances Fixed rate advances
	Wtd Avg Rate		Amount
	(dollars in thousands)
Over 5 through 10 years	5.66	%	1,000
Due after 10 years	5.37	%	5,000
Total			6,000
Valuation adjustment from acquisition accounting			644
Total			$	6,644

The maximum, average outstanding and year-end balances and average interest rates on advances from the FHLB were as follows for the years ended December 31, 2012, 2011 and 2010:



	Years ended December 31,
	2012			2011			2010
	(dollars in thousands)
Balance at end of year	$	6,644		$	119,009		$	119,405
Average balance during the year	$	100,337		$	120,419		$	123,685
Maximum month-end balance during the year	$	118,967		$	127,426		$	154,916
Weighted average rate during the year	2.79		%	2.76		%	2.75		%
Weighted average rate at December 31	5.42		%	2.81		%	2.81		%

FHLB advances are collateralized by the following:



	December 31,
	2012		2011
	(in thousands)
Fair value of investment securities	$	—	$	77,414
Recorded value of blanket pledge on loans receivable	443,419		462,040
Total	$	443,419	$	539,454
FHLB borrowing capacity	$	435,189	$	419,115

FEDERAL RESERVE BANK

The Company is also eligible to borrow under the Federal Reserve Bank’s primary credit program, including the Term Auction Facility auctions. All borrowings are secured by certain pledged available for sale investment securities.

Although the Company has not had FRB borrowings in the last three years, the Company pledges securities and loans for borrowing capacity at the Federal Reserve Bank.

The following table shows amounts pledged to the Federal Reserve Bank:



	December 31,
	2012		2011
	(in thousands)
Fair value of investment securities	$	45,641	$	53,122
Recorded value of pledged commercial loans	13,815		351,322
Total	$	59,456	$	404,444
Federal Reserve Bank borrowing capacity	$	59,456	$	404,444