

	Amortized		Unrealized		Unrealized			Fair Value
As of December 31, 2019	Cost		Gains		Losses			(Estimated)
Securities available for sale
U.S. government-sponsored agencies	$	7,500,000	$	—	$	(102,000	)	$	7,398,000
Mortgage-backed securities	323,277,000		4,173,000		(833,000)			326,617,000
State and political subdivisions	25,113,000		1,392,000		—			26,505,000
	$	355,890,000	$	5,565,000	$	(935,000	)	$	360,520,000
Securities to be held to maturity
U.S. Government-sponsored agencies	$	32,840,000	$	47,000	$	(26,000	)	$	32,861,000
Mortgage-backed securities	14,431,000		450,000		(16,000		)	14,865,000
State and political subdivisions	219,585,000		4,936,000		(109,000		)	224,412,000
Corporate securities	14,750,000		157,000		—			14,907,000
	$	281,606,000	$	5,590,000	$	(151,000	)	$	287,045,000
Restricted equity securities
Federal Home Loan Bank Stock	$	7,945,000	$	—	$	—		$	7,945,000
Federal Reserve Bank Stock	1,037,000		—		—			1,037,000
	$	8,982,000	$	—	$	—		$	8,982,000



	Amortized		Unrealized		Unrealized			Fair Value
As of December 31, 2018	Cost		Gains		Losses			(Estimated)
Securities available for sale
U.S. government-sponsored agencies	$	5,000,000	$	7,000	$	—		$	5,007,000
Mortgage-backed securities	313,854,000		571,000		(6,732,000		)	307,693,000
State and political subdivisions	4,955,000		—		(239,000		)	4,716,000
	$	323,809,000	$	578,000	$	(6,971,000	)	$	317,416,000
Securities to be held to maturity
U.S. Government-sponsored agencies	$	11,155,000	$	—	$	(472,000	)	$	10,683,000
Mortgage-backed securities	18,250,000		336,000		(255,000		)	18,331,000
State and political subdivisions	221,958,000		1,046,000		(5,418,000		)	217,586,000
Corporate securities	4,300,000		—		—			4,300,000
	$	255,663,000	$	1,382,000	$	(6,145,000	)	$	250,900,000
Restricted equity securities
Federal Home Loan Bank Stock	$	10,549,000	$	—	$	—		$	10,549,000
Federal Reserve Bank Stock	1,037,000		—		—			1,037,000
	$	11,586,000	$	—	$	—		$	11,586,000



	Securities available for sale				Securities to be held to maturity
	Amortized Cost		Fair Value (Estimated)		Amortized Cost		Fair Value (Estimated)
Due in 1 year or less	$	127,000	$	127,000	$	1,334,000	$	1,338,000
Due in 1 to 5 years	36,534,000		36,778,000		25,860,000		26,323,000
Due in 5 to 10 years	93,134,000		95,014,000		179,133,000		182,834,000
Due after 10 years	226,095,000		228,601,000		75,279,000		76,550,000
	$	355,890,000	$	360,520,000	$	281,606,000	$	287,045,000



	Securities available for sale				Securities to be held to maturity
	Amortized Cost		Fair Value (Estimated)		Amortized Cost		Fair Value (Estimated)
Due in 1 year or less	$	—	$	—	$	1,432,000	$	1,433,000
Due in 1 to 5 years	13,501,000		13,518,000		20,717,000		20,778,000
Due in 5 to 10 years	83,954,000		83,326,000		157,544,000		155,313,000
Due after 10 years	226,354,000		220,572,000		75,970,000		73,376,000
	$	323,809,000	$	317,416,000	$	255,663,000	$	250,900,000

At December 31, 2019, securities with a fair value of $214,173,000 were pledged to secure borrowings from the Federal Home Loan Bank of Boston, public deposits, repurchase agreements, and for other purposes as required by law. This compares to securities with a fair value of $222,829,000 as of December 31, 2018 pledged for the same purposes.

Gains and losses on the sale of securities available for sale are computed by subtracting the amortized cost at the time of sale from the security's selling price, net of accrued interest to be received.



	2019		2018		2017
Proceeds from sales of securities	$	9,229,000	$	459,000	$	15,587,000
Gross realized gains	224,000		137,000		471,000
Gross realized losses	—		—		—
Net gain	$	224,000	$	137,000	$	471,000
Related income taxes	$	47,000	$	29,000	$	165,000

Management reviews securities with unrealized losses for other than temporary impairment. As of December 31, 2019, there were 86 securities with unrealized losses held in the Company's portfolio. These securities were temporarily impaired as a result of changes in interest rates reducing their fair value, of which 28 had been temporarily impaired for 12 months or more. At the present time, there have been no material changes in the credit quality of these securities resulting in other than temporary impairment, and in Management's opinion, no additional write-down for other-than-temporary impairment is warranted.



	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
As of December 31, 2019	Value		Losses			Value		Losses			Value		Losses
U.S. Government-sponsored agencies	$	12,372,000	$	(128,000	)	$	—	$	—		$	12,372,000	$	(128,000	)
Mortgage-backed securities	54,244,000		(359,000		)	18,696,000		(490,000		)	72,940,000		(849,000		)
State and political subdivisions	10,532,000		(101,000		)	304,000		(8,000		)	10,836,000		(109,000		)
	$	77,148,000	$	(588,000	)	$	19,000,000	$	(498,000	)	$	96,148,000	$	(1,086,000	)

As of December 31, 2018, there were 511 securities with unrealized losses held in the Company's portfolio. These securities were temporarily impaired as a result of changes in interest rates reducing their fair value, of which 232 had been temporarily impaired for 12 months or more. Information regarding securities temporarily impaired as of December 31, 2018 is summarized below:



	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
As of December 31, 2018	Value		Losses			Value		Losses			Value		Losses
U.S. Government-sponsored agencies	$	—	$	—		$	10,683,000	$	(472,000	)	$	10,683,000	$	(472,000	)
Mortgage-backed securities	76,050,000		(1,061,000		)	185,136,000		(5,926,000		)	261,186,000		(6,987,000		)
State and political subdivisions	76,809,000		(1,784,000		)	45,052,000		(3,873,000		)	121,861,000		(5,657,000		)
	$	152,859,000	$	(2,845,000	)	$	240,871,000	$	(10,271,000	)	$	393,730,000	$	(13,116,000	)

As disclosed in Note 25, the FASB issued Accounting Standards Update (“ASU”) No. 2019–04 in April 2019. In December 2019, the Company elected to early adopt the amendments to Topic 815, Derivatives and Hedging, which allowed the Company a one–time reclassification of certain prepayable debt securities from held to maturity to available for sale. In December 2019, prepayable debt securities with a carrying value of $24.9 million and a net unrealized gain of $1.6 million were transferred from held to maturity to available for sale. The reclassified securities consisted of state and political subdivision municipal debt securities. The Company subsequently sold approximately $4.3 million of those securities at a gain of $209,000 recognized in 2019.

During the third quarter of 2014, the Company transferred securities with a total amortized cost of $89,780,000 and a corresponding fair value of $89,757,000 from available for sale to held to maturity. The net unrealized loss, net of taxes, on these securities at the date of the transfer was $15,000. The net unrealized holding loss at the time of transfer continues to be reported in accumulated other comprehensive income (loss), net of tax, and is amortized over the remaining lives of the securities as an adjustment of the yield. The amortization of the net unrealized loss reported in accumulated other comprehensive income (loss) will offset the effect on interest income of the discount for the transferred securities. The remaining unamortized balance of the net unrealized losses for the securities transferred from available for sale to held to maturity was $182,000 at December 31, 2019. These securities were transferred as a part of the Company's overall investment and balance sheet strategies.

The Bank is a member of the Federal Home Loan Bank ("FHLB") of Boston, a cooperatively owned wholesale bank for housing and finance in the six New England States. As a requirement of membership in the FHLB, the Bank must own a minimum required amount of FHLB stock, calculated periodically based primarily on its level of borrowings from the FHLB. The Bank uses the FHLB for much of its wholesale funding needs. As of December 31, 2019 and 2018, the Bank's investment in FHLB stock totaled $7,945,000 and $10,549,000, respectively. FHLB stock is a restricted equity security and therefore is reported at cost, which equals par value.

The Company periodically evaluates its investment in FHLB stock for impairment based on, among other factors, the capital adequacy of the FHLB and its overall financial condition. No impairment losses have been recorded through December 31, 2019. The Bank will continue to monitor its investment in FHLB stock.