	Amortized		Unrealized		Unrealized			Fair Value
As of December 31, 2011	Cost		Gains		Losses			(Estimated)
Securities available for sale
U.S. Government sponsored agencies	$	-	$	-	$	-		$	-
Mortgage-backed securities		191,924,000		6,486,000		(178,000	)		198,232,000
State and political subdivisions		80,259,000		5,484,000		(17,000	)		85,726,000
Corporate securities		1,098,000		-		(287,000	)		811,000
Other equity securities		1,535,000		37,000		(139,000	)		1,433,000
	$	274,816,000	$	12,007,000	$	(621,000	)	$	286,202,000
Securities to be held to maturity
U.S. Government sponsored agencies	$	19,390,000	$	132,000	$	-		$	19,522,000
Mortgage-backed securities		56,800,000		3,900,000		(3,000	)		60,697,000
State and political subdivisions		46,171,000		4,159,000		(172,000	)		50,158,000
Corporate securities		300,000		-		-			300,000
	$	122,661,000	$	8,191,000	$	(175,000	)	$	130,677,000
Non-marketable securities
Federal Home Loan Bank Stock	$	14,031,000	$	-	$	-		$	14,031,000
Federal Reserve Bank Stock		1,412,000		-		-			1,412,000
	$	15,443,000	$	-	$	-		$	15,443,000

	Amortized		Unrealized		Unrealized			Fair Value
As of December 31, 2010	Cost		Gains		Losses			(Estimated)
Securities available for sale
U.S. Government sponsored agencies	$	15,380,000	$	665,000	$	-		$	16,045,000
Mortgage-backed securities		236,126,000		1,024,000		(2,736,000	)		234,414,000
State and political subdivisions		43,404,000		171,000		(2,051,000	)		41,524,000
Corporate securities		1,113,000		-		(247,000	)		866,000
Other equity securities		371,000		19,000		(10,000	)		380,000
	$	296,394,000	$	1,879,000	$	(5,044,000	)	$	293,229,000
Securities to be held to maturity
U.S. Government sponsored agencies	$	2,190,000	$	35,000	$	-		$	2,225,000
Mortgage-backed securities		55,710,000		2,656,000		(144,000	)		58,222,000
State and political subdivisions		49,330,000		1,102,000		(663,000	)		49,769,000
Corporate securities		150,000		-		-			150,000
	$	107,380,000	$	3,793,000	$	(807,000	)	$	110,366,000
Non-marketable securities
Federal Home Loan Bank Stock	$	14,031,000	$	-	$	-		$	14,031,000
Federal Reserve Bank Stock		1,412,000		-		-			1,412,000
	$	15,443,000	$	-	$	-		$	15,443,000

	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	$	6,617,000	$	6,773,000	$	5,179,000	$	5,227,000
Due in 1 to 5 years		18,792,000		19,473,000		10,085,000		10,654,000
Due in 5 to 10 years		23,219,000		24,065,000		23,027,000		24,694,000
Due after 10 years		224,653,000		234,458,000		84,370,000		90,102,000
Equity securities		1,535,000		1,433,000		-		-
	$	274,816,000	$	286,202,000	$	122,661,000	$	130,677,000

	Securities available for sale				Securities to be held to maturity
In thousands of dollars	Amortized Cost		Fair Value (Estimated)		Amortized Cost		Fair Value (Estimated)
Due in 1 year or less	$	-	$	-	$	1,195,000	$	1,203,000
Due in 1 to 5 years		2,950,000		3,099,000		5,475,000		5,749,000
Due in 5 to 10 years		2,385,000		2,404,000		13,838,000		14,435,000
Due after 10 years		290,688,000		287,346,000		86,872,000		88,979,000
Equity securities		371,000		380,000		-		-
	$	296,394,000	$	293,229,000	$	107,380,000	$	110,366,000

At December 31, 2011, securities with a fair value of $141,506,000 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 $113,023,000, as of December 31, 2010 pledged for the same purpose.

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 2011, 2010 and 2009:

	2011			2010		2009
Proceeds from sales	$	140,417,000		$	202,000	$	4,051,000
Gross gains		4,020,000			2,000		20,000
Gross losses		(727,000	)		-		(170,000	)
Net gain (loss)	$	3,293,000		$	2,000	$	(150,000	)
Related income taxes	$	1,153,000		$	1,000	$	(52,000	)

Years ended December 31,	2011			2010			2009
Balance at beginning of year	$	(2,057,000	)	$	(125,000	)	$	(819,000	)
Unrealized gains (losses) arising during the period		17,844,000			(2,971,000	)		918,000
Realized (gains) losses during the period		(3,293,000	)		(2,000	)		150,000
Related deferred taxes		(5,093,000	)		1,041,000			(374,000	)
Net change		9,458,000			(1,932,000	)		694,000
Balance at end of year	$	7,401,000		$	(2,057,000	)	$	(125,000	)

Management reviews securities with unrealized losses for other than temporary impairment. As of December 31, 2011, there were 29 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 11 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. Information regarding securities temporarily impaired as of December 31, 2011 is summarized below:

	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
As of December 31, 2011	Value		Losses			Value		Losses			Value		Losses
U.S. Government sponsored agencies	$	-	$	-		$	-	$	-		$	-	$	-
Mortgage-backed securities		12,489,000		(25,000	)		6,780,000		(156,000	)		19,269,000		(181,000	)
State and political subdivisions		1,984,000		(17,000	)		1,667,000		(172,000	)		3,651,000		(189,000	)
Corporate securities		-		-			811,000		(287,000	)		811,000		(287,000	)
Other equity securities		154,000		(120,000	)		34,000		(19,000	)		188,000		(139,000	)
	$	14,627,000	$	(162,000	)	$	9,292,000	$	(634,000	)	$	23,919,000	$	(796,000	)

As of December 31, 2010, there were 136 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 13 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. Information regarding securities temporarily impaired as of December 31, 2010 is summarized below:

	Less than 12 months					12 months or more					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
As of December 31, 2010	Value		Losses			Value		Losses			Value		Losses
U.S. Government sponsored agencies	$	-	$	-		$	-	$	-		$	-	$	-
Mortgage-backed securities		160,767,000		(2,654,000	)		5,348,000		(226,000	)		166,115,000		(2,880,000	)
State and political subdivisions		44,513,000		(2,307,000	)		1,355,000		(407,000	)		45,868,000		(2,714,000	)
Corporate securities		-		-			866,000		(247,000	)		866,000		(247,000	)
Other equity securities		-		-			56,000		(10,000	)		56,000		(10,000	)
	$	205,280,000	$	(4,961,000	)	$	7,625,000	$	(890,000	)	$	212,905,000	$	(5,851,000	)

Federal Home Loan Bank stock and Federal Reserve Bank stock have also been evaluated for impairment. The Bank is a member of the Federal Home Loan Bank ("FHLB") of Boston. The FHLB is a cooperatively owned wholesale bank for housing and finance in the six New England States. Its mission is to support the residential mortgage and community-development lending activities of its members, which include over 450 financial institutions across New England. As a requirement of membership in the FHLB, the Bank must own a minimum required amount of

FHLB stock, calculated periodically based primarily on the Bank's level of borrowings from the FHLB. The Company uses the FHLB for much of its wholesale funding needs. As of December 31, 2011 and 2010, the Company's investment in FHLB stock totaled $14.0 million.

FHLB stock is a non-marketable equity security and therefore is reported at cost, which equals par value. Shares held in excess of the minimum required amount are generally redeemable at par value. However, in the first quarter of 2009 the FHLB announced a moratorium on such redemptions in order to preserve its capital in response to current market conditions and declining retained earnings. The minimum required shares are redeemable, subject to certain limitations, five years following termination of FHLB membership. The Bank has no intention of terminating its FHLB membership.

Although the Company had no dividend income on its FHLB stock in 2010, in each of the four quarters of 2011, FHLB's board of directors declared a dividend equal to an annual yield of 0.30%. FHLB's board of directors anticipates that it will continue to declare modest cash dividends through 2012, but cautioned that adverse events such as a negative trend in credit losses on the FHLB's private-label mortgage-backed securities or mortgage portfolio, a meaningful decline in income, or regulatory disapproval could lead to reconsideration of this plan.

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, 2011. The Bank will continue to monitor its investment in FHLB stock.