
	Amortized		Unrealized		Unrealized		Fair Value
As of December 31, 2023	Cost		Gains		Losses		(Estimated)
Securities available for sale
U.S. Treasury & Agency securities	$	26,033,000	$	—	$	(6,203,000)	$	19,830,000
Mortgage-backed securities	262,823,000		265,000		(38,491,000)		224,597,000
State and political subdivisions	40,306,000		41,000		(5,702,000)		34,645,000
Asset-backed securities	2,986,000		4,000		(9,000)		2,981,000

	$	332,148,000	$	310,000	$	(50,405,000)	$	282,053,000
Securities to be held to maturity
U.S. Treasury & Agency securities	$	40,100,000	$	—	$	(9,601,000)	$	30,499,000
Mortgage-backed securities	56,401,000		70,000		(10,398,000)		46,073,000
State and political subdivisions	254,418,000		313,000		(24,213,000)		230,518,000

Corporate securities	34,750,000		—		(3,270,000)		31,480,000
	$	385,669,000	$	383,000	$	(47,482,000)	$	338,570,000
Less allowance for credit losses	(434,000)		—		—		—
Net securities to be held to maturity	$	385,235,000	$	383,000	$	(47,482,000)	$	338,570,000
Restricted equity securities
Federal Home Loan Bank Stock	$	2,348,000	$	—	$	—	$	2,348,000
Federal Reserve Bank Stock	1,037,000		—		—		1,037,000
	$	3,385,000	$	—	$	—	$	3,385,000

AFS securities, as shown in the table above, consist of securities issued by U.S. Government Agencies, U.S. Government Sponsored Entities, State or Local Municipal Governments, or are backed by collateral that is guaranteed by the U.S. Government. We monitor the credit quality of these investments through credit ratings issued by major rating providers and through substantial price changes not consistent with general market movements. Each of the AFS securities is deemed to be investment grade, and no ACL was established for AFS securities.

Similarly, the agency and mortgage-backed securities in the HTM portfolio were determined to all be investment grade with no ACL required. Municipal securities within HTM include two private activity bonds issued by well-known customers of the Bank with total balances of $19.6 million as of December 31, 2023. These bonds carry similar risk characteristics to the commercial real estate - owner occupied segment of the Bank's loan portfolio described in Note 5 to the accompanying financial statements; management has elected to apply a loss rate matching the loan segment to the balance of these bonds for purposes of establishing an ACL. Corporate securities in HTM consist of thirteen individual companies in the banking industry. Management reviewed the collectability of these securities taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, and other performance factors. It was concluded that aggregate credit risk of the corporate securities was very low and an immaterial ACL was established. The total ACL for HTM securities was $434,000 as of December 31, 2023; there was no reserve as of December 31, 2022.


	Amortized		Unrealized		Unrealized		Fair Value
As of December 31, 2022	Cost		Gains		Losses		(Estimated)
Securities available for sale
U.S. Treasury & Agency securities	$	26,025,000	$	—	$	(6,878,000)	$	19,147,000
Mortgage-backed securities	271,068,000		55,000		(42,447,000)		228,676,000
State and political subdivisions	40,472,000		2,000		(7,283,000)		33,191,000
Asset-backed securities	3,548,000		—		(53,000)		3,495,000

	$	341,113,000	$	57,000	$	(56,661,000)	$	284,509,000
Securities to be held to maturity
U.S. Treasury & Agency securities	$	40,100,000	$	4,000	$	(10,477,000)	$	29,627,000
Mortgage-backed securities	60,497,000		42,000		(11,392,000)		49,147,000
State and political subdivisions	258,549,000		154,000		(30,733,000)		227,970,000
Corporate securities	34,750,000		—		(2,483,000)		32,267,000
	$	393,896,000	$	200,000	$	(55,085,000)	$	339,011,000
Restricted equity securities
Federal Home Loan Bank Stock	$	2,846,000	$	—	$	—	$	2,846,000
Federal Reserve Bank Stock	1,037,000		—		—		1,037,000
	$	3,883,000	$	—	$	—	$	3,883,000


	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	$	—	$	—	$	1,674,000	$	1,672,000
Due in 1 to 5 years	3,489,000		3,373,000		16,387,000		15,814,000
Due in 5 to 10 years	28,551,000		25,089,000		99,942,000		93,894,000
Due after 10 years	300,108,000		253,591,000		267,666,000		227,190,000

	$	332,148,000	$	282,053,000	$	385,669,000	$	338,570,000


	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	$	—	$	—	$	1,787,000	$	1,782,000
Due in 1 to 5 years	3,609,000		3,409,000		14,998,000		14,480,000
Due in 5 to 10 years	18,591,000		15,203,000		86,833,000		81,443,000
Due after 10 years	318,913,000		265,897,000		290,278,000		241,306,000

	$	341,113,000	$	284,509,000	$	393,896,000	$	339,011,000

At December 31, 2023, securities with a carrying value of $340,623,000 were pledged to secure borrowings from the FRBB, public deposits, repurchase agreements, and for other purposes as required by law. This compares to securities with a fair value of $350,411,000 as of December 31, 2022 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. The following table shows securities gains and losses for 2023, 2022 and 2021:

As of December 31, 2023, there were 226 AFS securities with unrealized losses held in the Company's portfolio. The Company has the ability and intent to hold its securities which are in an unrealized loss position until a recovery of their amortized cost, which may be at maturity.


	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of December 31, 2023	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury & Agency securities	$	—	$	—	$	19,830,000	$	(6,203,000)	$	19,830,000	$	(6,203,000)
Mortgage-backed securities	1,712,000		(14,000)		208,717,000		(38,477,000)		210,429,000		(38,491,000)
State and political subdivisions	2,082,000		(49,000)		27,700,000		(5,653,000)		29,782,000		(5,702,000)
Asset-backed securities	—		—		1,464,000		(9,000)		1,464,000		(9,000)

	$	3,794,000	$	(63,000)	$	257,711,000	$	(50,342,000)	$	261,505,000	$	(50,405,000)

As of December 31, 2022, there were 869 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 300 had been temporarily impaired for 12 months or more. Information regarding securities temporarily impaired as of December 31, 2022 is summarized below:


	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of December 31, 2022	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury & Agency securities	$	4,804,000	$	(675,000)	$	41,965,000	$	(16,680,000)	$	46,769,000	$	(17,355,000)
Mortgage-backed securities	73,509,000		(6,486,000)		197,102,000		(47,353,000)		270,611,000		(53,839,000)
State and political subdivisions	149,517,000		(13,769,000)		67,932,000		(24,247,000)		217,449,000		(38,016,000)
Asset-backed securities	3,495,000		(53,000)		—		—		3,495,000		(53,000)
Corporate securities	19,857,000		(2,143,000)		3,160,000		(340,000)		23,017,000		(2,483,000)
	$	251,182,000	$	(23,126,000)	$	310,159,000	$	(88,620,000)	$	561,341,000	$	(111,746,000)

Credit Quality Indicators: Agency and Government Sponsored Enterprise securities have a long history with no credit losses, including during times of severe stress. The principal and interest payments on agency-guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. All of the Mortgage-backed securities owned were issued either by a U.S. Government Agency (GNMA) or a Government Sponsored Enterprise (FNMA or FHLMC). HTM municipal debt holdings are comprised primarily of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. HTM holdings also include two unrated private activity bonds issued by well known customers of the Bank and corporate debt issued by various companies in the banking industry. These securities are regularly monitored by the Bank for collectibility and all issuers were in good standing as of December 31, 2023.


	State and Political Subdivisions		Corporate Securities		Total
Allowance for credit losses:
Beginning balance	$	—	$	—	$	—
Impact of adopting ASC 326	229,000		209,000		438,000
Credit loss (reversal) provision	(7,000)		3,000		(4,000)
Securities charged-off	—		—		—
Recoveries	—		—		—
Total ending allowance balance	$	222,000	$	212,000	$	434,000

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 AFS to HTM. 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 AOCI, 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 AOCI 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 $56,000, net of taxes, at December 31, 2023. This compares to $64,000, net of taxes, at December 31, 2022. These securities were transferred as a part of the Company's overall investment and balance sheet strategies.

The Bank is a member of the FHLBB, a cooperatively owned wholesale bank for housing and finance in the six New England States. As a requirement of membership in the FHLBB, the Bank must own a minimum required amount of FHLBB stock, calculated periodically based primarily on its level of borrowings from the FHLBB. The Bank uses the FHLBB for a portion of its wholesale funding needs. As of December 31, 2023 and 2022, the Bank's investment in FHLBB stock totaled $2,348,000 and $2,846,000, respectively. FHLBB stock is a non-marketable equity security and therefore is reported at cost, which equals par value.

The Bank is also a member of the FRBB. As a requirement for membership in the FRBB, the Bank must own a minimum required amount of FRBB stock. The Bank uses FRBB for certain correspondent banking services and maintains borrowing capacity at its discount window. The Bank's investment in FRBB stock totaled $1,037,000 at December 31, 2023 and 2022.

The Company periodically evaluates its investment in FHLBB and FRBB stock for impairment based on, among other factors, the capital adequacy of each institution and their overall financial condition. No impairment losses have been recorded through December 31, 2023. The Bank will continue to monitor its investment in these restricted equity securities.