INVESTMENTS

AFS and HTM Investments

The following table summarizes the amortized cost and estimated fair values of AFS and HTM investments, as of the dates indicated:



(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
September 30, 2019
AFS Investments (carried at fair value):
Obligations of states and political subdivisions	$	109,519	$	2,649	$	(169	)	$	111,999
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	449,112		5,799		(838		)	454,073
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	335,797		3,653		(1,734		)	337,716
Subordinated corporate bonds	9,560		175		—			9,735
Total AFS investments	$	903,988	$	12,276	$	(2,741	)	$	913,523
HTM Investments (carried at amortized cost):
Obligations of states and political subdivisions	$	1,303	$	49	$	—		$	1,352
Total HTM investments	$	1,303	$	49	$	—		$	1,352
December 31, 2018
AFS Investments (carried at fair value):
Obligations of states and political subdivisions	$	94,430	$	216	$	(894	)	$	93,752
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	466,613		583		(13,524		)	453,672
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	351,958		1,007		(10,071		)	342,894
Subordinated corporate bonds	20,398		23		(47		)	20,374
Total AFS investments	$	933,399	$	1,829	$	(24,536	)	$	910,692
HTM Investments (carried at amortized cost):
Obligations of states and political subdivisions	$	1,307	$	8	$	(24	)	$	1,291
Total HTM investments	$	1,307	$	8	$	(24	)	$	1,291

Net unrealized gains on AFS investments reported within AOCI at September 30, 2019, were $7.5 million, net of a deferred tax liability of $2.0 million. Net unrealized losses on AFS investments reported within AOCI at December 31, 2018, were $17.8 million, net of a deferred tax benefit of $4.9 million.

Impaired AFS and HTM Investments:

Quarterly, management reviews the Company’s AFS and HTM investments to determine the cause, magnitude and duration of declines in the fair value of each security. Thorough evaluations of the causes of the unrealized losses are performed to determine whether the impairment is temporary or other-than-temporary in nature. Considerations such as the ability of the securities to meet cash flow requirements, levels of credit enhancements, risk of curtailment, and recoverability of invested amount over a reasonable period of time, and the length of time the security is in a loss position, for example, are applied in determining OTTI. Once a decline in value is determined to be other-than-temporary, the cost basis of the security is permanently reduced and a corresponding charge to earnings is recognized.

The following table presents the estimated fair values and gross unrealized losses on AFS and HTM investments that were in a continuous loss position that was considered temporary, by length of time that an individual security in each category has been in a continuous loss position as of the dates indicated:



		Less Than 12 Months					12 Months or More					Total
(In thousands, except number of holdings)	Number of Holdings	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2019
AFS Investments:
Obligations of states and political subdivisions	9	$	24,439	$	(169	)	$	—	$	—		$	24,439	$	(169	)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	40	36,108		(50		)	86,109		(788		)	122,217		(838		)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	29	34,972		(85		)	73,709		(1,649		)	108,681		(1,734		)
Total AFS investments	78	$	95,519	$	(304	)	$	159,818	$	(2,437	)	$	255,337	$	(2,741	)
December 31, 2018
AFS Investments:
Obligations of states and political subdivisions	114	$	36,218	$	(281	)	$	28,437	$	(613	)	$	64,655	$	(894	)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	117	46,459		(252		)	364,430		(13,272		)	410,889		(13,524		)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	63	5,956		(40		)	227,461		(10,031		)	233,417		(10,071		)
Subordinated corporate bonds	6	11,378		(26		)	966		(21		)	12,344		(47		)
Total AFS investments	300	$	100,011	$	(599	)	$	621,294	$	(23,937	)	$	721,305	$	(24,536	)
HTM Investments:
Obligations of states and political subdivisions	2	$	509	$	(5	)	$	411	$	(19	)	$	920	$	(24	)
Total HTM investments	2	$	509	$	(5	)	$	411	$	(19	)	$	920	$	(24	)

At September 30, 2019 and December 31, 2018, unrealized losses within the AFS and HTM investment portfolios were reflective of current interest rates in excess of the yield received on debt investments, and were not indicative of an overall change in credit quality or other factors. At September 30, 2019 and December 31, 2018, gross unrealized losses on the Company's AFS and HTM investments were 1% and 3%, respectively, of their respective fair values.

At September 30, 2019, the Company had the intent and ability to retain its debt investments in an unrealized loss position until the decline in value has recovered.

Sale of AFS Investments:

The following table details the Company's sales of AFS investments for the periods indicated below:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2019			2018			2019			2018
Proceeds from sales of investments⁽¹⁾	$	97,042		$	22,830		$	142,868		$	32,728
Gross realized gains	1,015			—			1,386			31
Gross realized losses	(1,014		)	(275		)	(1,358		)	(275		)

(1) The Company had not previously recorded any OTTI on these investments sold.

AFS and HTM Investments Pledged:

At September 30, 2019 and December 31, 2018, AFS and HTM investments with an amortized cost of $704.6 million and $734.1 million and estimated fair values of $711.5 million and $714.4 million, respectively, were pledged to secure FHLBB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law.

Contractual Maturities:

The amortized cost and estimated fair values of the Company's AFS and HTM investments by contractual maturity at September 30, 2019, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



(In thousands)	Amortized Cost		Fair Value
AFS Investments
Due in one year or less	$	—	$	—
Due after one year through five years	82,995		83,568
Due after five years through ten years	186,981		189,976
Due after ten years	634,012		639,979
	$	903,988	$	913,523
HTM Investments
Due in one year or less	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	1,303		1,352
Due after ten years	—		—
	$	1,303	$	1,352

Other Investments

The following table summarizes the cost and estimated fair values of the Company's investment in equity securities, FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:



(In thousands)	Cost		Unrealized Gains		Unrealized Losses		Fair Value / Carrying Value
September 30, 2019
Equity securities - bank stock (carried at fair value)	$	544	$	264	$	—	$	808
FHLBB (carried at cost)	5,436		—		—		5,436
FRB (carried at cost)	5,374		—		—		5,374
Total other investments	$	11,354	$	264	$	—	$	11,618
December 31, 2018
Equity securities - bank stock (carried at fair value)	$	544	$	202	$	—	$	746
FHLBB (carried at cost)	8,559		—		—		8,559
FRB (carried at cost)	5,374		—		—		5,374
Total other investments	$	14,477	$	202	$	—	$	14,679

For the three months ended September 30, 2019 and 2018, the Company recognized an unrealized (loss) gain of ($22,000) and $11,000, respectively, due to the change in fair value of its bank stock equity securities, which was presented within other income on the consolidated statements of income. For the nine months ended September 30, 2019 and 2018, the Company recognized an unrealized gain (loss) of $62,000 and ($13,000), respectively, due to the change in fair value of its bank stock equity securities, which was presented within other income on the consolidated statements of income.

For the three and nine months ended September 30, 2018, the Company sold its remaining shares of Visa Inc. Class B common stock, with a carrying value of $441,000 that was presented within other assets on the consolidated statements of condition. The sale resulted in a gain of $939,000 that has been presented within net gain on sale of securities on the consolidated statements of income.

The Company did not record any OTTI on its FHLBB and FRB stock for the three or nine months ended September 30, 2019 and 2018.