FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2017

Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis Segregated by the Level of the Valuation Inputs Within the Fair Value Hierarchy Utilized to Measure Fair Value

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.



	March 31, 2017
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Available for sale securities:
Obligations of US Government sponsored enterprises	$	—	$	6,976	—		$	6,976
Mortgage-backed securities:
US Government-sponsored enterprises	—		461,821		—		461,821
US Government agency	—		82,449		—		82,449
Private label	—		1,021		—		1,021
Obligations of states and political subdivisions thereof	—		148,623		—		148,623
Corporate bonds	—		23,334		—		23,334
Derivative assets	—		1,387		98		1,485
Derivative liabilities	—		—		(55	)	(55		)



	December 31, 2016
	Level 1		Level 2		Level 3	Total
(In thousands)	Inputs		Inputs		Inputs	Fair Value
Available for sale securities:
Obligations of US Government sponsored enterprises	$	—	$	—	—	$	—
Mortgage-backed securities:						—
US Government-sponsored enterprises	—		328,452		—	328,452
US Government agency	—		76,906		—	76,906
Private label	—		1,132		—	1,132
Obligations of states and political subdivisions thereof	—		122,366		—	122,366
Corporate bonds	—		—		—	—
Derivative assets	—		1,748		—	1,748

Schedule of Changes in Level 3 Assets and Liabilities That Were Measured at Fair Value on a Recurring Basis

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three months ended March 31, 2017 and 2016.



	Assets (Liabilities)
	Interest Rate Lock		Forward
(In thousands)	Commitments		Commitments
Three Months Ended March 31, 2017
December 31, 2016	$	—	$	—
Acquisition of Lake Sunapee Bank, January 13, 2017	96		23
Realized gain (loss) recognized in non-interest income	2		(78		)
March 31, 2017	$	98	$	(55	)

Schedule of Quantitative Information About the Significant Unobservable Inputs Within Level 3

The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.



	March 31, 2017		December 31, 2016		Three months ended March 31, 2017		Fair Value Measurement Date as of March 31, 2017
(In thousands)	Level 3 Inputs		Level 3 Inputs		Total Gains (Losses)		Level 3 Inputs
Assets
Impaired loans	$	7,254	$	6,709	$	—	March 2017
Capitalized servicing rights	3,393		5		—		January 2017
Other real estate owned	363		90		—		January 2017-March 2017
Total	$	11,010	$	6,804	$	—

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:



(In thousands, except ratios)	Fair Value March 31, 2017			Valuation Techniques	Unobservable Inputs	Significant Unobservable Input Value
Assets (Liabilities)
Interest Rate Lock Commitment	$	98		Quoted prices for similar loans in active markets.	Closing Ratio	80	%
				Pricing Model	Freddie Mac pricing system	Pair-off contract price

Forward Commitments	(55		)	Quoted prices for similar loans in active markets.	Closing Ratio	80	%
				Pricing Model	Freddie Mac pricing system	Pair-off contract price
Total	$	43

Summary of Applicable Non-Recurring Fair Value Measurements

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is as follows:



	Fair Value
(in thousands, except ratios)	March 31, 2017		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Impaired loans	$	3,037	Fair value of collateral - appraised value	Loss severity	0% to 75%
				Appraised value	$0 to $1,732

Impaired loans	4,217		Discount cash flow	Discount rate	2.88% to 18.25%
				Cash flows	$5 to $852

Capitalized servicing rights	3,393		Discounted cash flow	Constant prepayment rate (CPR)	14.33	%
				Discount rate	7.55	%

Other real estate owned	363		Fair value of collateral	Appraised value	$120 to $215
Total	$	11,010


(a)	Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.



	Fair Value
(in thousands)	December 31, 2016		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Impaired loans	$	3,268	Fair value of collateral - appraised value	Loss severity	0% to 51%
				Appraised value	$0 to $1,732

Impaired loans	3,441		Discount cash flow	Discount rate	3.25% to 18.25%
				Cash flows	$6 to $861

Capitalized servicing rights	5		Discounted cash flow	Constant prepayment rate (CPR)	17.09	%
				Discount rate	7.55	%

Other real estate owned	90		Fair value of collateral	Appraised value	$120
Total	$	6,804


(a)	Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

Summary of Estimated Fair Values, and Related Carrying Amounts, of Financial Instruments

The estimated fair values, and related carrying amounts, of the Company’s financial instruments follow. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company.



	March 31, 2017
(In thousands)	Carrying Amount			Fair Value			Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	42,026		$	42,026		$	42,026	$	—	$	—
Securities available for sale	724,224			724,224			—		724,224		—
FHLBB bank stock	42,404			42,404			—		42,404		—
Net loans	2,361,553			2,334,432			—		—		2,334,432
Accrued interest receivable	9,215			9,215			—		9,215		—
Cash surrender value of bank-owned life insurance policies	56,627			56,627			—		56,627		—
Derivative assets	1,387			1,387			—		1,387		98

Financial Liabilities
Total deposits	$	2,174,253		$	2,147,132		$	—	$	2,147,132	$	—
Securities sold under agreements to repurchase	33,557			33,543			—		33,543		—
Federal Home Loan Bank advances	808,593			808,509			—		808,509		—
Subordinated borrowings	37,921			37,921			—		37,921		—
Junior subordinated borrowings	5,000			3,550			—		3,550		—
Derivative liabilities	(55		)	(55		)	—		—		(55		)



	December 31, 2016
(In thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	8,439	$	8,439	$	8,439	$	—	$	—
Securities available for sale	528,856		528,856		—		528,856		—
FHLBB bank stock	25,331		25,331		—		25,331		—
Net loans	1,118,645		1,100,601		—		—		1,100,601
Accrued interest receivable	6,051		6,051		—		6,051		—
Cash surrender value of bank-owned life insurance policies	24,450		24,450		—		24,450		—
Derivative assets	1,748		1,748		—		1,748		—

Financial Liabilities
Total deposits	$	1,050,300	$	1,048,932	$	—	$	1,048,932	$	—
Securities sold under agreements to repurchase	21,780		21,773		—		21,773		—
Federal Home Loan Bank advances	509,816		509,793		—		509,793		—
Subordinated borrowings	—		—		—		—		—
Junior subordinated borrowings	—		3,560		—		3,560		—