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Investment Securities
 6 Months Ended
Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
The following table summarizes the amortized cost and estimated fair value of investment securities at June 30, 2020:
Amortized
Cost		Unrealized GainsUnrealized LossesFair Value (Estimated)
Securities available for sale
U.S. Government-sponsored agencies$15,500,000  $68,000  $(12,000) $15,556,000  
Mortgage-backed securities267,805,000  7,937,000  (251,000) 275,491,000  
State and political subdivisions19,208,000  1,245,000  —  20,453,000  
$302,513,000  $9,250,000  $(263,000) $311,500,000  
Securities to be held to maturity
U.S. Government-sponsored agencies$31,144,000  $177,000  $—  $31,321,000  
Mortgage-backed securities50,983,000  1,089,000  (52,000) 52,020,000  
State and political subdivisions245,085,000  8,492,000  (32,000) 253,545,000  
Corporate securities14,750,000  589,000  —  15,339,000  
$341,962,000  $10,347,000  $(84,000) $352,225,000  
Restricted equity securities
Federal Home Loan Bank Stock$9,508,000  $—  $—  $9,508,000  
Federal Reserve Bank Stock1,037,000  —  —  1,037,000  
$10,545,000  $—  $—  $10,545,000  

The following table summarizes the amortized cost and estimated fair value of investment securities at December 31, 2019:
Amortized
Cost		Unrealized GainsUnrealized LossesFair Value (Estimated)
Securities available for sale
U.S. Government-sponsored agencies
$7,500,000  $—  $(102,000) $7,398,000  
Mortgage-backed securities323,277,000  4,173,000  (833,000) 326,617,000  
State and political subdivisions25,113,000  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 securities14,431,000  450,000  (16,000) 14,865,000  
State and political subdivisions219,585,000  4,936,000  (109,000) 224,412,000  
Corporate securities14,750,000  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 Stock1,037,000  —  —  1,037,000  
$8,982,000  $—  $—  $8,982,000  
The following table summarizes the amortized cost and estimated fair value of investment securities at June 30, 2019:
Amortized
Cost		Unrealized GainsUnrealized LossesFair Value (Estimated)
Securities available for sale
U.S. Government-sponsored agencies$5,000,000  $12,000  $—  $5,012,000  
Mortgage-backed securities309,133,000  4,249,000  (757,000) 312,625,000  
State and political subdivisions4,955,000  14,000  (36,000) 4,933,000  
$319,088,000  $4,275,000  $(793,000) $322,570,000  
Securities to be held to maturity
U.S. Government-sponsored agencies$35,995,000  $88,000  $—  $36,083,000  
Mortgage-backed securities16,569,000  500,000  (33,000) 17,036,000  
State and political subdivisions236,213,000  5,331,000  (460,000) 241,084,000  
Corporate securities13,750,000  122,000  —  13,872,000  
$302,527,000  $6,041,000  $(493,000) $308,075,000  
Restricted equity securities
Federal Home Loan Bank Stock$7,945,000  $—  $—  $7,945,000  
Federal Reserve Bank Stock1,037,000  —  —  1,037,000  
$8,982,000  $—  $—  $8,982,000  

The following table summarizes the contractual maturities of investment securities at June 30, 2020:
Securities available for saleSecurities to be held to maturity
Amortized
Cost		Fair Value (Estimated)Amortized
Cost		Fair Value (Estimated)
Due in 1 year or less$584,000  $573,000  $1,860,000  $1,863,000  
Due in 1 to 5 years26,736,000  27,310,000  32,303,000  33,367,000  
Due in 5 to 10 years63,422,000  65,575,000  179,877,000  185,994,000  
Due after 10 years211,771,000  218,042,000  127,922,000  131,001,000  
$302,513,000  $311,500,000  $341,962,000  $352,225,000  

The following table summarizes the contractual maturities of investment securities at December 31, 2019:
Securities available for saleSecurities 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 years36,534,000  36,778,000  25,860,000  26,323,000  
Due in 5 to 10 years93,134,000  95,014,000  179,133,000  182,834,000  
Due after 10 years226,095,000  228,601,000  75,279,000  76,550,000  
$355,890,000  $360,520,000  $281,606,000  $287,045,000  
The following table summarizes the contractual maturities of investment securities at June 30, 2019:
Securities available for saleSecurities to be held to maturity
Amortized
Cost		Fair Value (Estimated)Amortized
Cost		Fair Value (Estimated)
Due in 1 year or less$268,000  $269,000  $1,337,000  $1,339,000  
Due in 1 to 5 years21,771,000  21,976,000  21,857,000  22,026,000  
Due in 5 to 10 years102,117,000  104,238,000  186,409,000  189,984,000  
Due after 10 years194,932,000  196,087,000  92,924,000  94,726,000  
$319,088,000  $322,570,000  $302,527,000  $308,075,000  
At June 30, 2020, securities with a fair value of $245,917,000 were pledged to secure public deposits, repurchase agreements, and for other purposes as required by law. This compares to securities with a fair value of $214,173,000 as of December 31, 2019 and $190,725,000 at June 30, 2019, pledged for the same purposes.
Gains and losses on the sale of securities 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 the six months ended June 30, 2020 and 2019:
For the six months ended June 30,For the quarter ended June 30,
2020201920202019
Proceeds from sales of securities$79,469,000  $—  $10,849,000  $—  
Gross realized gains1,526,000  —  428,000  —  
Gross realized losses(347,000) —  (1,000) —  
Net gain$1,179,000  $—  $427,000  $—  
Related income taxes$248,000  $—  $90,000  $—  

Sales include 28 municipal securities sold in the second quarter of 2020 that had been designated as Held to Maturity. Proceeds from these sales totaled $8,600,000 against a cumulative book value of $8,313,000 resulting in a net realized gain of $268,000. The economic potential impact of COVID-19 is considered to be an isolated and unusual event that could not be reasonably anticipated as outlined in Accounting Standards Codification (ASC) Section 320-10-25. Management conducted a review of its municipal bond portfolio in conjunction with risk mitigation efforts related to the onset of the COVID-19 virus; the intent of the review was to identify investment exposures with lower relative credit ratings, locales with perceived above average economic risk, municipal entities with reliance upon sales tax or income tax revenue, or any combination of these factors. Each of the sold positions met one or more of the criteria.
Management reviews securities with unrealized losses for other than temporary impairment. As of June 30, 2020, there were 52 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. The Company has the ability and intent to hold its impaired securities until a recovery of their amortized cost, which may be at maturity.
Information regarding securities temporarily impaired as of June 30, 2020 is summarized below:
Less than 12 months12 months or moreTotal
Fair Value (Estimated)Unrealized LossesFair Value (Estimated)Unrealized LossesFair Value (Estimated)Unrealized Losses
U.S. Government-sponsored agencies$7,988,000  $(12,000) $—  $—  $7,988,000  $(12,000) 
Mortgage-backed securities28,116,000  (160,000) 4,771,000  (143,000) 32,887,000  (303,000) 
State and political subdivisions7,623,000  (32,000) —  —  7,623,000  (32,000) 
$43,727,000  $(204,000) $4,771,000  $(143,000) $48,498,000  $(347,000) 
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.
Information regarding securities temporarily impaired as of December 31, 2019 is summarized below:
Less than 12 months12 months or moreTotal
Fair Value (Estimated)Unrealized LossesFair Value (Estimated)Unrealized LossesFair Value (Estimated)Unrealized Losses
U.S. Government-sponsored agencies$12,372,000  $(128,000) $—  $—  $12,372,000  $(128,000) 
Mortgage-backed securities54,244,000  (359,000) 18,696,000  (490,000) 72,940,000  (849,000) 
State and political subdivisions10,532,000  (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 June 30, 2019, there were 133 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 127 had been temporarily impaired for 12 months or more. In the first quarter of 2019, one issuer of securities held in the portfolio was downgraded by a rating agency to less than investment grade. These securities totaled approximately 0.06% of overall state and municipal security holdings and were subsequently sold during the third quarter 2019.
Information regarding securities temporarily impaired as of June 30, 2019 is summarized below:
Less than 12 months12 months or moreTotal
Fair Value (Estimated)Unrealized LossesFair Value (Estimated)Unrealized LossesFair Value (Estimated)Unrealized Losses
Mortgage-backed securities$4,150,000  $—  $49,270,000  $(790,000) $53,420,000  $(790,000) 
State and political subdivisions998,000  (9,000) 30,325,000  (487,000) 31,323,000  (496,000) 
$5,148,000  $(9,000) $79,595,000  $(1,277,000) $84,743,000  $(1,286,000) 

During the third quarter of 2014, the Company transferred securities with a total amortized cost of $89,780,000 with 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 $146,000, net of tax, at June 30, 2020. This compares to $182,000 and $190,000, net of taxes, at December 31, 2019 and June 30, 2019, respectively. 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 a portion of its wholesale funding needs. As of June 30, 2020 and 2019, and December 31, 2019, the Bank's investment in FHLB stock totaled $9,508,000, $7,945,000 and $7,945,000, respectively. FHLB stock is a non-marketable 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 June 30, 2020. The Company will continue to monitor its investment in FHLB stock.