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, 2011 FHLB advances were scheduled to mature as follows:



	Federal Home Loan Bank Advances Fixed rate advances
	Wtd Avg Rate		Amount
	(dollars in thousands)
Within 1 year	4.22	%	$	8,000
Over 1 through 5 years	2.54	%	103,694
Over 5 through 10 years	5.30	%	1,416
Due after 10 years	5.37	%	5,000
Total			118,110
Valuation adjustment from acquisition accounting			899
Total			$	119,009

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, 2011, 2010 and 2009:



	Years ended December 31,
	2011			2010			2009
	(dollars in thousands)
Balance at end of year	$	119,009		$	119,405		$	100,000
Average balance during the year	$	120,419		$	123,685		$	111,211
Maximum month-end balance during the year	$	127,426		$	154,916		$	178,000
Weighted average rate during the year	2.76		%	2.75		%	2.38		%
Weighted average rate at December 31	2.81		%	2.81		%	2.49		%

FHLB advances are collateralized by the following:



	December 31,
	2011		2010
	(in thousands)
Fair value of investment securities	$	77,414	$	96,496
Recorded value of blanket pledge on loans receivable	462,040		426,555
Total	$	539,454	$	523,051
FHLB Borrowing Capacity	$	419,115	$	402,048

FEDERAL RESERVE BANK

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

The maximum, average outstanding and year-end balances and average interest rates on advances from the Federal Reserve Bank were as follows for the years ended December 31, 2011, 2010 and 2009:



	Years ended December 31,
	2011			2010			2009
	(dollars in thousands)
Balance at end of year	$	—		$	—		$	—
Average balance during the year	$	—		$	—		$	38,205
Maximum month-end balance during the year	$	—		$	—		$	100,000
Weighted average rate during the year	—		%	—		%	0.30		%
Weighted average rate at December 31	N/A			N/A			N/A

_________

N/A Not applicable

Federal Reserve Bank advances are collateralized by the following:



	December 31,
	2011		2010
	(in thousands)
Fair value of investment securities	$	53,122	$	135,966
Recorded value of pledged commercial loans	351,322		313,452
Total	$	404,444	$	449,418
Federal Reserve Bank borrowing capacity	$	404,444	$	449,418