Borrowings

The Company has a maximum line of credit with the FHLB of Seattle approximating 25% of eligible assets. FHLB advances are subject to collateral criteria that require the Company to pledge assets under a blanket pledge arrangement as collateral for its borrowings from the FHLB. Based on assets currently pledged and advances currently outstanding at December 31, 2014, the Company's available borrowing line is $201.1 million. Additional advances of up to 25% of eligible assets, or $351.2 million, are dependent on the availability of acceptable collateral such as marketable securities or real estate loans, although all FHLB advances are secured by a blanket pledge of the Company’s assets. The Company has an outstanding FHLB CIP advance of $2.2 million as of December 31, 2014 and 2013, that was originated on March 22, 2013 and is included in long term borrowings. This advance was originated to match fund a loan to one borrower for the construction of a low income housing project that qualifies for a long term fixed interest rate; it has an eighteen year term with a 30 year amortization period, which mirrors the term of the term real estate loan made to the borrower.

The Company purchased its main office facility for $12.9 million on July 1, 2008. In this transaction, the Company, through NBL, assumed an existing loan secured by the building in an amount of $5.1 million. At December 31, 2014 and 2013, the outstanding balance on this loan was zero and $4.3 million, respectively. This was an amortizing loan and had a maturity date of April 1, 2014 and an interest rate of 5.95% and was paid off in January 2014.

The Federal Reserve Bank is holding $86.2 million of loans as collateral to secure available borrowing lines through the discount window of $45.7 million at December 31, 2014. There were no discount window advances outstanding at December 31, 2014 and 2013. The Company paid less than $1,000 in 2014 and 2013 in interest on this agreement.

Securities sold under agreements to repurchase were $19.8 million and $21.1 million, respectively, for December 31, 2014 and 2013. The Company was paying 0.08% on these agreements at December 31, 2014 and 2013, respectively. The average balance outstanding of securities sold under agreement to repurchase during 2014 and 2013 was $20.1 million and $19.4 million, respectively, and the maximum outstanding at any month-end was $22.4 million and $24.0 million, respectively, during the same time periods. The securities sold under agreement to repurchase are held by the Federal Home Loan Bank under the Company’s control.

RML has a warehouse line of credit which is secured by eligible loans held for sale. The line of credit contains restrictive covenants on net worth requirements, debt-to-net worth ratios, distributions to members, transactions with affiliates, liquidity requirements, capital expenditures, and interest coverage. RML was in compliance with the aforementioned covenants at December 31, 2014. The outstanding balance of this line was $24.1 million at December 31, 2014. The loan matures on August 12, 2015 and has a floating interest rate of 2.625% over LIBOR with a floor of 2.875%. The loan had an interest rate of 2.875% at December 31, 2014.

The future principal payments that are required on the Company’s borrowings as of December 31, 2014, are as follows:



(In Thousands)
2015		$24,185
2016	46
2017	48
2018	50
2019	52
Thereafter	1,923
Total		$26,304

The Company recognized interest expense of $634,000, $340,000, and $329,000 in 2014, 2013, and 2012, respectively. The average interest rates paid on long-term debt in the same periods was 3.51%, 5.13%, and 5.95%, respectively.