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Investment Securities | 9 Months Ended
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Sep. 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 September 30, 2020:
| Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value (Estimated)
Securities available for sale |  |  |  |  |  |  |
U.S. Government-sponsored agencies | $ | 27,545,000 |  |  | $ | 180,000 |  |  | $ | (228,000) |  |  | $ | 27,497,000 |
Mortgage-backed securities | 270,336,000 |  |  | 6,737,000 |  |  | (649,000) |  |  | 276,424,000 |
State and political subdivisions | 35,271,000 |  |  | 1,240,000 |  |  | (292,000) |  |  | 36,219,000 |
| $ | 333,152,000 |  |  | $ | 8,157,000 |  |  | $ | (1,169,000) |  |  | $ | 340,140,000 |
Securities to be held to maturity |  |  |  |  |  |  |
U.S. Government-sponsored agencies | $ | 26,146,000 |  |  | $ | 294,000 |  |  | $ | — |  |  | $ | 26,440,000 |
Mortgage-backed securities | 43,414,000 |  |  | 844,000 |  |  | (119,000) |  |  | 44,139,000 |
State and political subdivisions | 245,152,000 |  |  | 8,660,000 |  |  | (69,000) |  |  | 253,743,000 |
Corporate securities | 17,250,000 |  |  | 490,000 |  |  | — |  |  | 17,740,000 |
| $ | 331,962,000 |  |  | $ | 10,288,000 |  |  | $ | (188,000) |  |  | $ | 342,062,000 |
Restricted equity securities |  |  |  |  |  |  |
Federal Home Loan Bank Stock | $ | 9,508,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 9,508,000 |
Federal Reserve Bank Stock | 1,037,000 |  |  | — |  |  | — |  |  | 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 Gains |  | Unrealized Losses |  | Fair Value (Estimated)
Securities available for sale |  |  |  |  |  |  |
U.S. Government-sponsored agencies | $ | 7,500,000 |  |  | $ | — |  |  | $ | (102,000) |  |  | $ | 7,398,000 |
Mortgage-backed securities | 323,277,000 |  |  | 4,173,000 |  |  | (833,000) |  |  | 326,617,000 |
State and political subdivisions | 25,113,000 |  |  | 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 securities | 14,431,000 |  |  | 450,000 |  |  | (16,000) |  |  | 14,865,000 |
State and political subdivisions | 219,585,000 |  |  | 4,936,000 |  |  | (109,000) |  |  | 224,412,000 |
Corporate securities | 14,750,000 |  |  | 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 Stock | 1,037,000 |  |  | — |  |  | — |  |  | 1,037,000 |
| $ | 8,982,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,982,000 |
The following table summarizes the amortized cost and estimated fair value of investment securities at September 30, 2019:
| Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value (Estimated)
Securities available for sale |  |  |  |  |  |  |
Mortgage-backed securities | $ | 317,553,000 |  |  | $ | 5,327,000 |  |  | $ | (690,000) |  |  | $ | 322,190,000 |
State and political subdivisions | 4,580,000 |  |  | 28,000 |  |  | — |  |  | 4,608,000 |
| $ | 322,133,000 |  |  | $ | 5,355,000 |  |  | $ | (690,000) |  |  | $ | 326,798,000 |
Securities to be held to maturity |  |  |  |  |  |  |
U.S. Government-sponsored agencies | $ | 32,840,000 |  |  | $ | 93,000 |  |  | $ | — |  |  | $ | 32,933,000 |
Mortgage-backed securities | 15,584,000 |  |  | 502,000 |  |  | (16,000) |  |  | 16,070,000 |
State and political subdivisions | 236,612,000 |  |  | 7,136,000 |  |  | (48,000) |  |  | 243,700,000 |
Corporate securities | 13,750,000 |  |  | 194,000 |  |  | — |  |  | 13,944,000 |
| $ | 298,786,000 |  |  | $ | 7,925,000 |  |  | $ | (64,000) |  |  | $ | 306,647,000 |
Restricted equity securities |  |  |  |  |  |  |
Federal Home Loan Bank Stock | $ | 7,945,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,945,000 |
Federal Reserve Bank Stock | 1,037,000 |  |  | — |  |  | — |  |  | 1,037,000 |
| $ | 8,982,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,982,000 |
The following table summarizes the contractual maturities of investment securities at September 30, 2020:
| 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 | $ | 7,097,000 |  |  | $ | 7,159,000 |  |  | $ | 2,454,000 |  |  | $ | 2,462,000 |
Due in 1 to 5 years | 23,789,000 |  |  | 24,260,000 |  |  | 32,595,000 |  |  | 33,683,000 |
Due in 5 to 10 years | 58,430,000 |  |  | 60,086,000 |  |  | 176,400,000 |  |  | 182,370,000 |
Due after 10 years | 243,836,000 |  |  | 248,635,000 |  |  | 120,513,000 |  |  | 123,547,000 |
| $ | 333,152,000 |  |  | $ | 340,140,000 |  |  | $ | 331,962,000 |  |  | $ | 342,062,000 |
The following table summarizes the contractual maturities of investment securities at December 31, 2019:
| 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 | $ | 127,000 |  |  | $ | 127,000 |  |  | $ | 1,334,000 |  |  | $ | 1,338,000 |
Due in 1 to 5 years | 36,534,000 |  |  | 36,778,000 |  |  | 25,860,000 |  |  | 26,323,000 |
Due in 5 to 10 years | 93,134,000 |  |  | 95,014,000 |  |  | 179,133,000 |  |  | 182,834,000 |
Due after 10 years | 226,095,000 |  |  | 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 September 30, 2019:
| 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 | $ | 189,000 |  |  | $ | 189,000 |  |  | $ | 1,241,000 |  |  | $ | 1,245,000 |
Due in 1 to 5 years | 36,304,000 |  |  | 36,703,000 |  |  | 23,460,000 |  |  | 23,920,000 |
Due in 5 to 10 years | 91,242,000 |  |  | 93,419,000 |  |  | 184,234,000 |  |  | 188,811,000 |
Due after 10 years | 194,398,000 |  |  | 196,487,000 |  |  | 89,851,000 |  |  | 92,671,000 |
| $ | 322,133,000 |  |  | $ | 326,798,000 |  |  | $ | 298,786,000 |  |  | $ | 306,647,000 |
At September 30, 2020, securities with a fair value of $285,253,000 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 $216,903,000 at September 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 nine months and quarters ended September 30, 2020 and 2019:
| For the nine months ended September 30, |  | For the quarter ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Proceeds from sales of securities | $ | 79,469,000 |  |  | $ | 4,725,000 |  |  | $ | — |  |  | $ | 4,725,000 |
Gross realized gains | 1,526,000 |  |  | 82,000 |  |  | — |  |  | 82,000 |
Gross realized losses | (347,000) |  |  | (67,000) |  |  | — |  |  | (67,000) |
Net gain | $ | 1,179,000 |  |  | $ | 15,000 |  |  | $ | — |  |  | $ | 15,000 |
Related income taxes | $ | 248,000 |  |  | $ | 3,000 |  |  | $ | — |  |  | $ | 3,000 |
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 September 30, 2020, there were 75 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 10 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 September 30, 2020 is summarized below:
| Less than 12 months |  | 12 months or more |  | Total
| Fair Value (Estimated) |  | Unrealized Losses |  | Fair Value (Estimated) |  | Unrealized Losses |  | Fair Value (Estimated) |  | Unrealized Losses
U.S. Government-sponsored agencies | $ | 16,817,000 |  |  | $ | (228,000) |  |  | $ | — |  |  | $ | — |  |  | $ | 16,817,000 |  |  | $ | (228,000) |
Mortgage-backed securities | 79,816,000 |  |  | (654,000) |  |  | 4,216,000 |  |  | (114,000) |  |  | 84,032,000 |  |  | (768,000) |
State and political subdivisions | 19,201,000 |  |  | (361,000) |  |  | — |  |  | — |  |  | 19,201,000 |  |  | (361,000) |
| $ | 115,834,000 |  |  | $ | (1,243,000) |  |  | $ | 4,216,000 |  |  | $ | (114,000) |  |  | $ | 120,050,000 |  |  | $ | (1,357,000) |
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 months |  | 12 months or more |  | Total
| Fair Value (Estimated) |  | Unrealized Losses |  | Fair Value (Estimated) |  | Unrealized Losses |  | Fair Value (Estimated) |  | Unrealized Losses
U.S. Government-sponsored agencies | $ | 12,372,000 |  |  | $ | (128,000) |  |  | $ | — |  |  | $ | — |  |  | $ | 12,372,000 |  |  | $ | (128,000) |
Mortgage-backed securities | 54,244,000 |  |  | (359,000) |  |  | 18,696,000 |  |  | (490,000) |  |  | 72,940,000 |  |  | (849,000) |
State and political subdivisions | 10,532,000 |  |  | (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 September 30, 2019, there were 60 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 29 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 0.13% of overall state and municipal security holdings and were subsequently sold during the third quarter 2019. Information regarding securities temporarily impaired as of September 30, 2019 is summarized below:
| Less than 12 months |  | 12 months or more |  | Total
| Fair Value (Estimated) |  | Unrealized Losses |  | Fair Value (Estimated) |  | Unrealized Losses |  | Fair Value (Estimated) |  | Unrealized Losses
Mortgage-backed securities | $ | 30,249,000 |  |  | $ | (233,000) |  |  | $ | 22,569,000 |  |  | $ | (473,000) |  |  | $ | 52,818,000 |  |  | $ | (706,000) |
State and political subdivisions | 5,073,000 |  |  | (42,000) |  |  | 306,000 |  |  | (6,000) |  |  | 5,379,000 |  |  | (48,000) |
| $ | 35,322,000 |  |  | $ | (275,000) |  |  | $ | 22,875,000 |  |  | $ | (479,000) |  |  | $ | 58,197,000 |  |  | $ | (754,000) |
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 $139,000, net of tax, at September 30, 2020. This compares to $182,000 and $189,000, net of taxes, at December 31, 2019 and September 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 September 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 September 30, 2020. The Company will continue to monitor its investment in FHLB stock.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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