SECURITIES AVAILABLE FOR SALE

The following is a summary of securities available for sale:



(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
December 31, 2019
Debt securities:
Mortgage-backed securities:
US Government-sponsored enterprises	$	319,064	$	4,985	$	(2,080	)	$	321,969
US Government agency	98,568		1,640		(547		)	99,661
Private label	20,212		68		(747		)	19,533
Obligations of states and political subdivisions thereof	139,240		3,034		(268		)	142,006
Corporate bonds	78,804		1,478		(221		)	80,061
Total securities available for sale	$	655,888	$	11,205	$	(3,863	)	$	663,230

December 31, 2018
Debt securities:
Mortgage-backed securities:
US Government-sponsored enterprises	$	413,492	$	904	$	(9,444	)	$	404,952
US Government agency	111,938		509		(1,935		)	110,512
Private label	20,353		113		(84		)	20,382
Obligations of states and political subdivisions thereof	133,260		1,081		(2,076		)	132,265
Corporate bonds	58,098		264		(636		)	57,726
Total securities available for sale	$	737,141	$	2,871	$	(14,175	)	$	725,837

The amortized cost and estimated fair value of available for sale (“AFS”) securities segregated by contractual maturity at December 31, 2019 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable.



	Available for sale
(in thousands)	Amortized Cost		Fair Value
Within 1 year	$	—	$	—
Over 1 year to 5 years	33,179		34,004
Over 5 years to 10 years	57,285		58,138
Over 10 years	127,580		129,925
Total bonds and obligations	218,044		222,067
Mortgage-backed securities	437,844		441,163
Total securities available for sale	$	655,888	$	663,230

The following table summarizes proceeds from the sale of AFS securities and realized gains and losses:



(in thousands)	Proceeds from Sale of Securities Available for Sale		Realized Gains		Realized Losses			Net
2019	$	92,315	$	993	$	(756	)	$	237
2018	29,107		—		(924		)	(924		)
2017	1,599		19		—			19

Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:



	Less Than Twelve Months				Over Twelve Months				Total
(in thousands)	Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value
December 31, 2019
Debt securities:
Mortgage-backed securities:
US Government-sponsored enterprises	$	1,074	$	43,429	$	1,006	$	49,712	$	2,080	$	93,141
US Government agency	432		19,717		115		9,120		547		28,837
Private label	380		9,843		367		9,411		747		19,254
Obligations of states and political subdivisions thereof	137		29,355		131		1,682		268		31,037
Corporate bonds	142		9,888		79		12,276		221		22,164
Total securities available for sale	$	2,165	$	112,232	$	1,698	$	82,201	$	3,863	$	194,433

December 31, 2018
Debt securities:
Mortgage-backed securities:
US Government-sponsored enterprises	$	155	$	19,367	$	9,289	$	297,569	$	9,444	$	316,936
US Government agency	16		2,570		1,919		68,266		1,935		70,836
Private label	79		10,393		5		47		84		10,440
Obligations of states and political subdivisions thereof	43		6,784		2,033		47,930		2,076		54,714
Corporate bonds	224		11,759		412		14,460		636		26,219
Total securities available for sale	$	517	$	50,873	$	13,658	$	428,272	$	14,175	$	479,145

A summary of securities pledged as collateral for certain deposits and borrowing arrangements as of the years ended December 31, 2019 and December 31, 2018 is as follows:



	December 31, 2019				December 31, 2018
(in thousands)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Securities pledged for deposits	$	217,009	$	220,054	$	128,949	$	126,649
Securities pledged for repurchase agreements	96,007		96,477		55,656		54,189
Securities pledged for other borrowings ⁽¹⁾	157,172		157,458		270,252		265,334
Total securities pledged	$	470,188	$	473,989	$	454,857	$	446,172

______________________________

(1) The Bank pledged securities as collateral for certain borrowing arrangements with the Federal Home Loan Bank of Boston and Federal Reserve Bank of Boston.

Securities Impairment

As a part of the Company’s ongoing security monitoring process, the Company identifies securities in an unrealized loss position that could potentially be other-than-temporarily impaired. For the twelve months ended December 31, 2019, 2018 and 2017 the Company did not record any other-than-temporary impairment (“OTTI”) losses.

The following table presents the remaining amount of historical credit losses on debt securities and changes reflected in the statement of income:



	Twelve Months Ended December 31,
(in thousands)	2019		2018		2017
Estimated credit losses as of prior year-end,	$	1,697	$	1,697	$	1,697
Reductions for securities paid off during the period	—		—		—
Estimated credit losses at end of the period	$	1,697	$	1,697	$	1,697

The Company expects to recover its amortized cost basis on all debt securities in its AFS portfolio, as unrealized losses are the result of changes in the interest rate environment and other market factors. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of December 31, 2019, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover.

The following summarizes, by investment security type, the basis for the conclusion that the debt securities in an unrealized loss position within the Company’s AFS were not other-than-temporarily impaired at December 31, 2019:

US Government-sponsored enterprises

163 out of the total 684 securities in the Company’s portfolios of AFS US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 2.3% of the amortized cost of securities in unrealized loss positions.The FNMA and FHLMC guarantee the contractual cash flows of all of the Company’s US Government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the year. All securities are performing.

US Government agencies

49 out of the total 182 securities in the Company’s portfolios of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 1.9% of the amortized cost of securities in unrealized loss positions. The Government National Mortgage Association (“GNMA”) guarantees the contractual cash flows of all of the Company’s US government agency securities. The securities are rated investment grade and there were no material underlying credit downgrades during the year. All securities are performing.

Private-label

9 of the total 19 securities in the Company’s portfolio of AFS private-label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 3.7% of the amortized cost of securities in unrealized loss positions. Based upon the foregoing considerations, and the expectation that the Company will receive all of the future contractual cash flows related to the amortized cost on these securities, the Company does not consider there to be any additional other-than-temporary impairment with respect to these securities.

Obligations of states and political subdivisions thereof

15 of the total 217 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 0.9% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company believes the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk. There were no material underlying credit downgrades during the year. All securities are performing.

Corporate bonds

7 of the total 27 securities in the Company’s portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 1.1% of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.