Note 11 – Borrowings

The Company utilizes a loan agreement with the FHLB of Seattle. The terms of the agreement call for a blanket pledge of a portion of the Company's mortgage and commercial and multifamily portfolio based on the outstanding balance. At December 31, 2012, the amount available to borrow under this agreement was approximately 35% of total assets, or up to $133.4 million, subject to the availability of eligible collateral. Based on eligible collateral, the total amount available under this agreement as of December 31, 2012 and December 31, 2011 was $90.7 million and $83.5 million, respectively. The Company had outstanding borrowings under this arrangement of $21.9 million and $8.5 million at December 31, 2012 and 2011, respectively. Additionally, the Company had outstanding letters of credit from the FHLB with a notional amount of $31.5 million and $24.0 million at December 31, 2012 and December 31, 2011, respectively, to secure public deposits. The net remaining amount available as of December 31, 2012 and December 31, 2011, was $37.3 million and $51.0 million, respectively.

Contractual principal repayments and the weighted average interest rate at the balance sheet date noted below are as follows:

Year Ending December 31,	Amount		Weighted Average Interest Rate
	(dollars in thousands)
2013	$	19,643		0.97	%
2014		643		2.47
2015		643		2.47
2016		643		2.47
2017		292		2.47
		21,864		1.12	%

The Company participates in the Federal Reserve Bank ("FRB") Borrower-in-Custody program, which gives the Company access to the discount window. The terms of the program call for a pledge of specific assets. The Company had unused borrowing capacity of $11.8 million and $21.9 and no outstanding borrowings under this program at December 31, 2012 and 2011, respectively.

The Company has access to an unsecured line of credit from the Pacific Coast Banker's Bank. The line has a two-year term maturing on June 30, 2014 and is renewable biannually. As of December 31, 2012, the amount available under this line of credit was $2.0 million. There was no balance on this line of credit as of December 31, 2012 and 2011, respectively. The following table summarizes our borrowings for the years ended December 31, 2012 and 2011, respectively:

	For the year ended December 31,
	2012			2011
	(dollars in thousands)
Maximum balance
FHLB advances	$	21,864		$	24,596
FRB advances	$	-		$	-
Average balances
FHLB advances	$	8,901		$	14,249
FRB advances	$	-		$	-
Weighted average interest rate
FHLB advances		2.02	%		1.97	%
FRB advances	NM			NM