Federal Home Loan Bank Borrowings

12 Months Ended

Dec. 31, 2013

FEDERAL HOME LOAN BANK BORROWINGS [Abstract]

Federal Home Loan Bank Advances, Disclosure [Text Block]

FEDERAL HOME LOAN BANK BORROWINGS

The Bank is a member of the Federal Home Loan Bank (“FHLB”) of Boston. As a member of the FHLB of Boston, the Bank has access to short- and long-term borrowings. Borrowings from the FHLB are secured by the Bank’s stock investment in the FHLB and a blanket lien on “qualified collateral” defined principally as a percentage of the principal balance of certain types of mortgage loans. The percentage of collateral allowed varies between 50% and 75% based on the type of underlying collateral. The Bank had loans pledged as collateral with a book value of $1.8 billion at both December 31, 2013 and 2012. Based on this collateral and the discounts applied, the Bank had borrowings outstanding of $367.3 million and $408.1 million, and available credit with the FHLB of Boston of $836.5 million and $794.4 million, at December 31, 2013 and 2012, respectively.

A summary of borrowings from the FHLBs is as follows:

	December 31, 2013
	Amount		Weighted Average Rate
	(In thousands)
Within 1 year	$	21,844	3.91	%
Over 1 to 2 years	91,742		2.91	%
Over 2 to 3 years	102,062		2.11	%
Over 3 to 4 years	55,271		2.60	%
Over 4 to 5 years	58,206		1.65	%
Over 5 years	38,129		3.67	%
Total	$	367,254	2.58	%

As of December 31, 2013, $38.0 million of the FHLB borrowings are callable by the FHLB prior to maturity. As of December 31, 2012, $43.0 million of the FHLB borrowings are callable by the FHLB prior to maturity.

FHLB Stock

As a member of the FHLB, the Bank is required to own FHLB stock based on a percentage of outstanding advances in addition to a membership stock ownership requirement. Prior to the 2011 merger of the Banks, each of the Banks was a member of its local FHLB located in either Boston, Seattle, or San Francisco. At the time of the merger there were outstanding FHLB borrowings with both the FHLBs of San Francisco and Seattle. Until these borrowings in the FHLBs of San Francisco and Seattle mature and are subsequently paid off, the FHLB stock associated with these borrowings cannot be redeemed. As of December 31, 2013, there were no advances remaining with the FHLB of Seattle.

The Bank is required to own FHLB stock at least equal to 4.5% of outstanding advances depending on the individual FHLB membership. FHLB stock owned in excess of the minimum requirements can be redeemed at par upon request by a member but may be subject to a waiting period. The FHLB redeems excess stock at its option at par from time to time. The Bank may not redeem additional purchases of stock prior to a five year minimum holding period.

As of December 31, 2013 and 2012, the Bank’s FHLB stock holdings totaled $38.6 million and $42.0 million, respectively, of which $30.8 million and $30.3 million, respectively was invested in the FHLB of Boston. The Bank’s investment in FHLB stock is recorded at cost and is redeemable at par. The remaining FHLB stock holdings are invested in the FHLB of San Francisco, of which Borel and First Private were members prior to the merger, and the FHLB of Seattle, of which Charter was a member prior to the merger.