LINES OF CREDIT AND BORROWED FUNDS

12 Months Ended

Dec. 31, 2012

NOTE 11—LINES OF CREDIT AND BORROWED FUNDS

The Bank has lines of credit with two financial institutions providing for federal funds facilities up to a maximum of $30.0 million. The lines of credit support short-term liquidity and cannot be used for more than 30 consecutive business days, depending on the lending institution. These lines are unsecured, have no formal maturity date, and can be revoked at any time by the granting institution. There were no borrowings outstanding under these agreements at December 31, 2012 and 2011.

As a state nonmember bank, the Bank also has a secured borrowing facility of $15.4 million with the Federal Reserve Bank of San Francisco. At December 31, 2012 and 2011, there were no borrowings outstanding under this agreement.

The Bank, as a member of the FHLB, has entered into credit arrangements with the FHLB, with maximum borrowing capacity of approximately $607.5 million at December 31, 2012. Borrowings under the credit arrangements are collateralized by FHLB stock as well as loans or other instruments which may be pledged. The Bank’s borrowing capacity is determined based on the estimated market value of certain eligible loans and securities pledged as collateral; however, the FHLB has a blanket lien against the Bank’s entire loan portfolio as collateral for borrowings. The Company had $409.5 million of unused borrowing capacity available from the FHLB at December 31, 2012 based upon collateral pledged. As of December 31, 2012, borrowings outstanding with the FHLB were as follows:


	Amount		Maturity Year		Weighted Average Interest Rate
	(in thousands)
Overnight advances	$	—		—		—
Term advances		7,054		2013		2.93	%
Term advances		32,500		2014		2.95	%
Term advances		15,000		2015		1.76	%
Term advances		22,500		2017		2.20	%
	$	77,054

As of December 31, 2012, $7.5 million of our FHLB advances are ten-year putable advances with a weighted average rate of 4.07% and $17.5 million are seven-year putable advances with a weighted average rate of 4.24%.

The following tables show securities sold under agreements to repurchase for the dates and periods shown (in thousands):


	2012
	Year-end					Average
	Balance		Rate			Balance		Rate
Securities sold under repurchase agreements	$	30,000		3.64	%	$	30,000		3.64	%

	2011
	Year-end					Average
	Balance		Rate			Balance		Rate
Securities sold under repurchase agreements	$	30,000		3.64	%	$	30,657		3.64	%

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details