

	At December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	182,922	$	2,939	$	58	$	185,803
GSE CMOs	87,001		22		1,091		85,932
GSE MBSs	153,049		797		503		153,343
SBA commercial loan asset-backed securities	34		—		—		34
Corporate debt obligations	28,484		502		—		28,986
U.S. treasury bonds	44,675		338		116		44,897
Total investment securities available-for-sale	$	496,165	$	4,598	$	1,768	$	498,995
Investment securities held-to-maturity:
GSE debentures	$	31,228	$	113	$	51	$	31,290
GSEs MBSs	9,360		—		81		9,279
Municipal obligations	45,692		822		—		46,514
Foreign government obligations	500		—		22		478
Total investment securities held-to-maturity	$	86,780	$	935	$	154	$	87,561
Equity securities held-for-trading			$	561			$	3,581



	At December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	184,072	$	99	$	3,092	$	181,079
GSE CMOs	107,363		17		4,250		103,130
GSE MBSs	169,334		124		4,369		165,089
SBA commercial loan asset-backed securities	51		—		—		51
Corporate debt obligations	40,618		—		910		39,708
U.S. treasury bonds	13,812		65		141		13,736
Total investment securities available-for-sale	$	515,250	$	305	$	12,762	$	502,793
Investment securities held-to-maturity:
GSE debentures	$	50,546	$	22	$	967	$	49,601
GSEs MBSs	11,426		—		295		11,131
Municipal obligations	52,304		10		716		51,598
Foreign government obligations	500		—		—		500
Total investment securities held-to-maturity	$	114,776	$	32	$	1,978	$	112,830
Equity securities held for trading					1,170		$	4,207

As of December 31, 2019, the fair value of all investment securities available-for-sale was $499.0 million, with net unrealized gains of $2.8 million, compared to a fair value of $502.8 million and net unrealized losses of $12.5 million as of December 31, 2018. As of December 31, 2019, $205.6 million, or 41.2% of the portfolio, had gross unrealized losses of $1.8 million, compared to $466.7 million, or 92.8% of the portfolio, with gross unrealized losses of $12.8 million as of December 31, 2018.

As of December 31, 2019, the fair value of all investment securities held-to-maturity was $87.6 million, with net unrealized gains of $0.8 million, compared to a fair value of $112.8 million with net unrealized losses of $1.9 million as of December 31, 2018. As of December 31, 2019, $22.3 million, or 25.5% of the portfolio, had gross unrealized losses of $0.2 million. As of December 31, 2018, $102.1 million, or 90.5% of the portfolio had gross unrealized losses of $2.0 million.

As of December 31, 2019 and 2018, respectively, $433.6 million and $442.5 million of investment securities were pledged as collateral for repurchase agreements; municipal deposits; treasury, tax and loan deposits ("TT&L"); swap agreements; and FHLBB borrowings. The Banks did not have any outstanding FRB borrowings as of December 31, 2019 and 2018.

Investment securities as of December 31, 2019 and 2018 that have been in a continuous unrealized loss position for less than twelve months or twelve months or longer are as follows:



	At December 31, 2019
	Less than Twelve Months				Twelve Months or Longer				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	10,965	$	58	$	—	$	—	$	10,965	$	58
GSE CMOs	28,659		217		55,885		874		84,544		1,091
GSE MBSs	42,046		115		42,257		388		84,303		503
SBA commercial loan asset-backed securities	—		—		33		—		33		—
U.S. Treasury bonds	25,754		116		—		—		25,754		116
Temporarily impaired investment securities available-for-sale	107,424		506		98,175		1,262		205,599		1,768
Investment securities held-to-maturity:
GSE debentures	8,714		30		2,977		21		11,691		51
GSEs MBSs	—		—		9,257		81		9,257		81
Municipal obligations	710		—		205		—		915		—
Foreign government obligations	478		22		—		—		478		22
Temporarily impaired investment securities held-to-maturity	9,902		52		12,439		102		22,341		154
Total temporarily impaired investment securities	$	117,326	$	558	$	110,614	$	1,364	$	227,940	$	1,922



	At December 31, 2018
	Less than Twelve Months				Twelve Months or Longer				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	25,780	$	191	$	130,284	$	2,901	$	156,064	$	3,092
GSE CMOs	—		—		102,630		4,250		102,630		4,250
GSE MBSs	21,487		113		138,051		4,256		159,538		4,369
SBA commercial loan asset-backed securities	—		—		51		—		51		—
Corporate debt obligations	10,019		93		29,689		817		39,708		910
U.S. Treasury bonds	3,927		37		4,753		104		8,680		141
Temporarily impaired investment securities available-for-sale	61,213		434		405,458		12,328		466,671		12,762
Investment securities held-to-maturity:
GSE debentures	—		—		40,653		967		40,653		967
GSEs MBSs	—		—		11,080		295		11,080		295
Municipal obligations	14,813		107		35,058		609		49,871		716
Foreign government obligations	—		—		500		—		500		—
Temporarily impaired investment securities held-to-maturity	14,813		107		87,291		1,871		102,104		1,978
Total temporarily impaired investment securities	$	76,026	$	541	$	492,749	$	14,199	$	568,775	$	14,740

The Company performs regular analysis on the investment securities available-for-sale portfolio to determine whether a decline in fair value indicates that an investment security is OTTI. In making these OTTI determinations, management considers, among other factors, the length of time and extent to which the fair value has been less than amortized cost; projected future cash flows; credit subordination and the creditworthiness; capital adequacy and near-term prospects of the issuers.

Management also considers the Company's capital adequacy, interest-rate risk, liquidity and business plans in assessing whether it is more likely than not that the Company will sell or be required to sell the investment securities before recovery. If the Company determines that a decline in fair value is OTTI and that it is more likely than not that the Company will not sell or be required to sell the investment security before recovery of its amortized cost, the credit portion of the impairment loss is recognized in the Company's consolidated statement of income and the noncredit portion is recognized in accumulated other comprehensive income. The credit portion of the OTTI impairment represents the difference between the amortized cost and the present value of the expected future cash flows of the investment security. If the Company determines that a decline in fair value is OTTI and it is more likely than not that it will sell or be required to sell the investment security before recovery of its amortized cost, the entire difference between the amortized cost and the fair value of the security will be recognized in the Company's consolidated statement of income.

The following discussion summarizes, by investment security type, the basis for evaluating if the applicable investment securities within the Company’s available-for-sale portfolio were OTTI as of December 31, 2019. Based on the analysis below and the determination that, it is more likely than not that the Company will not sell or be required to sell the investment securities before recovery of its amortized cost. The Company's ability and intent to hold these investment securities until recovery is supported by the Company's strong capital and liquidity positions as well as its historically low portfolio turnover. As such, management has determined that the investment securities are not OTTI as of December 31, 2019. If market conditions for investment securities worsen or the creditworthiness of the underlying issuers deteriorates, it is possible that the Company may recognize additional OTTI in future periods.

The Company invests in securities issued by U.S. Government-sponsored enterprises ("GSEs"), including GSE debentures, mortgage-backed securities ("MBSs"), and collateralized mortgage obligations ("CMOs"). GSE securities include obligations issued by the Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC"), the Government National Mortgage Association ("GNMA"), the Federal Home Loan Banks ("FHLB") and the Federal Farm Credit Bank. As of December 31, 2019, only GNMA MBSs and CMOs, and Small Business Administration ("SBA") commercial loan asset-backed securities in our available-for-sale portfolio with an estimated fair value of $17.4 million were backed explicitly by the full faith and credit of the U.S. Government, compared to $20.6 million as of December 31, 2018.

As of December 31, 2019, the Company owned 60 GSE debentures with a total fair value of $185.8 million, and a net unrealized gain of $2.9 million. As of December 31, 2018, the Company held 60 GSE debentures with a total fair value of $181.1 million, and a net unrealized loss of $3.0 million. As of December 31, 2019, 5 of the 60 securities in this portfolio were in an unrealized loss position. As of December 31, 2018, 51 of the 60 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA/SBA) guarantee of the U.S. Government. For the year ended December 31, 2019, the Company did not purchase any GSE debentures, compared to the year ended December 31, 2018, when the Company purchased a total of $33.9 million of GSE debentures.

As of December 31, 2019, the Company owned 61 GSE CMOs with a total fair value of $85.9 million and a net unrealized loss of $1.1 million. As of December 31, 2018, the Company held 61 GSE CMOs with a total fair value of $103.1 million with a net unrealized loss of $4.2 million. As of December 31, 2019, 45 of the 61 securities in this portfolio were in an unrealized loss position. As of December 31, 2018, 46 of the 61 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government. For the years ended December 31, 2019 and 2018, the Company did not purchase any GSE CMOs.

As of December 31, 2019, the Company owned 150 GSE MBSs with a total fair value of $153.3 million and a net unrealized gain of $0.3 million. As of December 31, 2018, the Company held 162 GSE MBSs with a total fair value of $165.1 million with a net unrealized loss of $4.2 million. As of December 31, 2019, 48 of the 150 securities in this portfolio were in an unrealized loss position. As of December 31, 2018, 93 of the 162 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government. For the years ended December 31, 2019 and 2018, the Company purchased a total of $19.6 million and $15.2 million, respectively, of GSE MBSs.

As of December 31, 2019, the Company owned 4 SBA securities with a total fair value of $34.0 thousand, which approximated amortized cost. As of December 31, 2018, the Company owned 4 SBA securities with a total fair value of $51.0 thousand which approximated amortized cost. As of December 31, 2019, 3 of the 4 securities in this portfolio were in an unrealized loss position. As of December 31, 2018, all of the securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the explicit (SBA) guarantee of the U.S Government. For the years ended December 31, 2019 and 2018, the Company did not purchase any SBA securities.

The Company may invest in high-quality corporate obligations to provide portfolio diversification and improve the overall yield on the portfolio. As of December 31, 2019, the Company owned 8 corporate obligation securities with a total fair value of $29.0 million and a net unrealized gain of $0.5 million. This compares to 11 corporate obligation securities with a total fair value of $39.7 million and a net unrealized loss of $0.9 million as of December 31, 2018. As of December 31, 2019, none of the securities in this portfolio were in an unrealized loss position. As of December 31, 2018, all 11 of the securities in this portfolio were in an unrealized loss position. Full collection of the obligations is expected because the financial condition of the issuers is sound, they have not defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the ability and intent to hold the obligations for a period of time to recover the amortized cost. For the years ended December 31, 2019 and 2018, the Company did not purchase any corporate obligations.

The Company invests in securities issued by the U.S. government. As of December 31, 2019, the Company owned 9 U.S. Treasury bonds with a total fair value of $44.9 million and a net unrealized gain of $0.2 million. As of December 31, 2018, the Company owned 7 U.S. Treasury bonds with a total fair value of $13.7 million and a net unrealized loss of $0.1 million. As of December 31, 2019, 5 of the 9 securities in this portfolio were in an unrealized loss position. As of December 31, 2018, 2 of the 7 securities in this portfolio were in unrealized loss positions. For the years ended December 31, 2019 and 2018, the Company purchased $30.8 million and $24.7 million in U.S. Treasury bonds, respectively.

The following discussion summarizes by investment security type, the basis for evaluating if the applicable investment securities within the Company's held-to-maturity portfolio were OTTI at December 31, 2019. Management does not intend to sell these securities prior to maturity.

As of December 31, 2019, the Company owned 10 GSE debentures with a total fair value of $31.3 million and a net unrealized gain of $0.1 million. As of December 31, 2018, the Company owned 17 GSE debentures with a total fair value of $49.6 million and a net unrealized loss of $0.9 million. As of December 31, 2019, 4 of the 10 securities in this portfolio were in an unrealized loss position. At December 31, 2018, 14 of the 17 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government. For the year ended December 31, 2019, the Company did not purchase any GSE debentures, compared to the year ended December 31, 2018, when the Company purchased a total of $8.9 million of GSE debentures.

As of December 31, 2019, the Company owned 8 GSE MBSs with a total fair value of $9.3 million and a net unrealized loss of $0.1 million. As of December 31, 2018, the Company owned 8 GSE MBSs with a total fair value of $11.1 million and an unrealized loss of $0.3 million. As of December 31, 2019 and 2018, all securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government. During the year ended December 31, 2019 and 2018, the Company did not purchase any GSE MBSs.

The Company invests in certain state and municipal securities with high credit ratings for portfolio diversification and tax planning purpose. As of December 31, 2019, the Company owned 93 municipal obligation securities with a total fair value and total amortized cost of $46.5 million and $45.7 million, respectively. As of December 31, 2018, the Company owned 98 municipal obligation securities with a total fair value of $51.6 million and an amortized cost of $52.3 million, respectively. As of December 31, 2019, 6 of the 93 securities in this portfolio were in an unrealized loss position as compared to December 31, 2018, when 94 of the 98 securities were in an unrealized loss position. During the year ended December 31, 2019, the Company purchased a total of $0.9 million of municipal obligations, compared to the year ended December 31, 2018, when the Company did not purchase any municipal obligations.

As of December 31, 2019 and 2018, the Company owned one foreign government obligation security with a fair value and amortized cost of $0.5 million. During the year ended December 31, 2019, the Company repurchased the foreign government obligation security that matured during the first quarter of 2019. As of December 31, 2019 and 2018, the security was in an unrealized loss position. During the year ended December 31, 2019 and 2018, the Company did not purchase any additional foreign government obligation securities.



	At December 31,
	2019					2018
	Amortized Cost		Estimated Fair Value		Weighted Average Rate	Amortized Cost		Estimated Fair Value		Weighted Average Rate
	(Dollars in Thousands)
Investment securities available-for-sale:
Within 1 year	$	12,797	$	12,804	1.76%	$	12,041	$	12,007	2.03%
After 1 year through 5 years	217,569		220,757		2.19%	195,701		192,692		2.14%
After 5 years through 10 years	93,805		94,212		2.04%	115,665		112,819		2.18%
Over 10 years	171,994		171,222		2.12%	191,843		185,275		2.17%
	$	496,165	$	498,995	2.13%	$	515,250	$	502,793	2.16%
Investment securities held-to-maturity:
Within 1 year	$	6,366	$	6,381	1.33%	$	7,640	$	7,618	1.17%
After 1 year through 5 years	63,898		64,559		1.81%	72,735		71,492		1.84%
After 5 years through 10 years	7,177		7,364		1.79%	23,025		22,640		2.20%
Over 10 years	9,339		9,257		1.90%	11,376		11,080		2.13%
	$	86,780	$	87,561	1.82%	$	114,776	$	112,830	1.89%

Actual maturities of debt securities will differ from those presented above since certain obligations amortize and may also provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty. MBSs and CMOs are included above based on their final stated maturities; the actual maturities, however, may occur earlier due to anticipated prepayments and stated amortization of cash flows.

As of December 31, 2019, issuers of debt securities with an estimated fair value of $37.6 million had the right to call or prepay the obligations. Of the $37.6 million, approximately $3.0 million matures within 1 year, $34.6 million matures in 1 - 5 years, and none mature after five years. As of December 31, 2018, issuers of debt securities with an estimated fair value of approximately $19.1 million had the right to call or prepay the obligations. Of the $19.1 million, none of the obligations mature within 1 year, $8.4 million mature in 1-5 years, $10.7 million mature in 6-10 years, and none mature after ten years.

On March 6, 2018, the Company, through its wholly owned subsidiary, BSC, received $0.6 million in cash and 11,303 shares of Community Bank Systems, Inc. ("CBU") common stock as settlement for the indemnification escrow on the 12 month anniversary date of the merger between Northeast Retirement Securities, Inc. and CBU. The Company subsequently sold all 11,303 shares of the CBU stock and recognized a gain on the sale of $0.6 million.

During the month of March 2018, the Company, through Brookline Bank’s wholly owned subsidiary, LSC, sold three trust preferred securities with a book value of $1.5 million for a loss of $0.1 million. The table below includes the activity with respect to the sale of the trust preferred securities and restricted equity securities.



	Year Ended December 31,
	2019			2018			2017
	(In Thousands)
Proceeds from sales of debt securities	$	—		$	20,000		$	—
Proceeds from sales of marketable and restricted equity securities	1,212			2,700			11,393

Gross gains from sales	—			1,472			11,612
Gross losses from sales	(232		)	(68		)	(219		)
Gain on sales of securities, net	$	(232	)	$	1,404		$	11,393