10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report-
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2016

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to           

Commission File No. 333-171913

First Connecticut Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	45-1496206
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
One Farm Glen Boulevard, Farmington, CT	06032
(Address of Principal Executive Offices)	(Zip Code)

(860) 676-4600

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such requirements for the past 90 days.    YES    x    NO    ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES    x    NO    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer” and “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES    ¨    NO    x

As of October 24, 2016, there were 15,809,248 shares of First Connecticut Bancorp, Inc. common stock, par value $0.01, outstanding.

First Connecticut Bancorp, Inc.

Table of Contents

		Page
Part I. Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Statements of Financial Condition at September 30, 2016 (unaudited) and December 31, 2015	1
	Consolidated Statements of Income for the three and nine months ended September 30, 2016 and 2015 (unaudited)	2
	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015 (unaudited)	3
	Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2016 (unaudited)	4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 (unaudited)	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 4.	Controls and Procedures	69
Part II. Other Information
Item 1.	Legal Proceedings	69
Item1A.	Risk Factors	69
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3.	Defaults upon Senior Securities	69
Item 4.	Mine Safety Disclosure	70
Item 5.	Other Information	70
Item 6.	Exhibits	70
Signatures		72
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

First Connecticut Bancorp, Inc.

Consolidated Statements of Financial Condition (Unaudited)

	September 30,			December 31,
	2016			2015
(Dollars in thousands, except share and per share data)
Assets
Cash and due from banks	$	33,206		$	45,732
Interest bearing deposits with other institutions		56,734			13,407
Total cash and cash equivalents		89,940			59,139
Securities held-to-maturity, at amortized cost		7,338			32,246
Securities available-for-sale, at fair value		134,094			132,424
Loans held for sale		5,462			9,637
Loans(1)		2,476,364			2,361,796
Allowance for loan losses		(21,263	)		(20,198	)
Loans, net		2,455,101			2,341,598
Premises and equipment, net		18,383			18,565
Federal Home Loan Bank of Boston stock, at cost		15,139			21,729
Accrued income receivable		6,413			6,747
Bank-owned life insurance		51,364			50,618
Deferred income taxes, net		15,136			15,443
Prepaid expenses and other assets		33,590			20,400
Total assets	$	2,831,960		$	2,708,546
Liabilities and Stockholders' Equity
Deposits
Interest-bearing	$	1,828,209		$	1,589,970
Noninterest-bearing		419,664			401,388
		2,247,873			1,991,358
Federal Home Loan Bank of Boston advances		220,600			377,600
Repurchase agreement borrowings		10,500			10,500
Repurchase liabilities		35,036			35,769
Accrued expenses and other liabilities		62,336			47,598
Total liabilities		2,576,345			2,462,825
Stockholders' Equity
Common stock, $0.01 par value, 30,000,000 shares authorized; 17,947,647 shares issued and 15,805,748 shares outstanding at September 30, 2016 and 17,976,893 shares issued and 15,881,663 shares outstanding at December 31, 2015		181			181
Additional paid-in-capital		183,769			181,997
Unallocated common stock held by ESOP		(10,833	)		(11,626	)
Treasury stock, at cost (2,141,899 shares at September 30, 2016 and 2,095,230 shares at December 31, 2015)		(31,645	)		(30,602	)
Retained earnings		120,487			112,933
Accumulated other comprehensive loss		(6,344	)		(7,162	)
Total stockholders' equity		255,615			245,721
Total liabilities and stockholders' equity	$	2,831,960		$	2,708,546

(1) Loans include net deferred loan costs of $3.9 million and $4.0 million at September 30, 2016 and December 31, 2015, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

1 

First Connecticut Bancorp, Inc.

Consolidated Statements of Income (Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
(Dollars in thousands, except share and per share data)
Interest income
Interest and fees on loans
Mortgage	$	16,134	$	15,861	$	48,161	$	46,250
Other		4,983		4,594		14,555		12,853
Interest and dividends on investments
United States Government and agency obligations		419		401		1,285		1,109
Other bonds		13		13		40		66
Corporate stocks		210		217		681		493
Other interest income		46		8		104		19
Total interest income		21,805		21,094		64,826		60,790
Interest expense
Deposits		2,975		2,412		8,446		6,761
Federal Home Loan Bank of Boston advances		955		890		2,902		2,445
Repurchase agreement borrowings		98		96		289		351
Repurchase liabilities		22		24		56		87
Total interest expense		4,050		3,422		11,693		9,644
Net interest income		17,755		17,672		53,133		51,146
Provision for loan losses		698		386		1,716		1,664
Net interest income after provision for loan losses		17,057		17,286		51,417		49,482
Noninterest income
Fees for customer services		1,600		1,536		4,614		4,409
Gain on sales of investments		-		-		-		1,523
Net gain on loans sold		939		993		2,180		1,925
Brokerage and insurance fee income		58		54		166		163
Bank owned life insurance income		335		349		1,056		946
Other		753		309		1,186		1,013
Total noninterest income		3,685		3,241		9,202		9,979
Noninterest expense
Salaries and employee benefits		9,285		9,302		27,874		27,127
Occupancy expense		1,271		1,219		3,679		3,858
Furniture and equipment expense		1,020		1,034		3,099		3,147
FDIC assessment		392		413		1,179		1,227
Marketing		682		443		1,647		1,386
Other operating expenses		2,834		2,307		7,927		8,507
Total noninterest expense		15,484		14,718		45,405		45,252
Income before income taxes		5,258		5,809		15,214		14,209
Income tax expense		1,485		1,594		4,185		4,011
Net income	$	3,773	$	4,215	$	11,029	$	10,198
Net earnings per share (See Note 3):
Basic	$	0.25	$	0.28	$	0.74	$	0.68
Diluted		0.25		0.28		0.73		0.67
Dividends per share		0.08		0.06		0.22		0.16

The accompanying notes are an integral part of these consolidated financial statements.

2 

First Connecticut Bancorp, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
(Dollars in thousands)
Net income	$	3,773	$	4,215	$	11,029	$	10,198
Other comprehensive income, before tax
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period		8		103		776		(2,872	)
Less: reclassification adjustment for gains included in net income		-		-		-		1,523
Net change in unrealized gains (losses)		8		103		776		(1,349	)
Change related to pension and other postretirement benefit plans		164		170		491		361
Other comprehensive income (loss), before tax		172		273		1,267		(988	)
Income tax expense (benefit)		61		96		449		(348	)
Other comprehensive income (loss), net of tax		111		177		818		(640	)
Comprehensive income	$	3,884	$	4,392	$	11,847	$	9,558

The accompanying notes are an integral part of these consolidated financial statements.

3 

First Connecticut Bancorp, Inc.

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

									Unallocated									Accumulated
	Common Stock					Additional			Common									Other			Total
	Shares					Paid in			Shares Held			Treasury			Retained			Comprehensive			Stockholders'
	Outstanding			Amount		Capital			by ESOP			Stock			Earnings			Loss			Equity
(Dollars in thousands, except share data)
Balance at December 31, 2015		15,881,663		$	181	$	181,997		$	(11,626	)	$	(30,602	)	$	112,933		$	(7,162	)	$	245,721
ESOP shares released and committed to be released		-			-		392			793			-			-			-			1,185
Cash dividend paid ($0.22 per common share)		-			-		-			-			-			(3,475	)		-			(3,475	)
Treasury stock acquired		(156,800	)		-		-			-			(2,527	)		-			-			(2,527	)
Stock options exercised		110,131			-		(53	)		-			1,484			-			-			1,431
Cancelation of shares for tax withholding		(29,246	)		-		(516	)		-			-			-			-			(516	)
Tax expense from stock-based compensation		-			-		173			-			-			-			-			173
Share based compensation expense		-			-		1,776			-			-			-			-			1,776
Net income		-			-		-			-			-			11,029			-			11,029
Other comprehensive income		-			-		-			-			-			-			818			818
Balance at September 30, 2016		15,805,748		$	181	$	183,769		$	(10,833	)	$	(31,645	)	$	120,487		$	(6,344	)	$	255,615

The accompanying notes are an integral part of these consolidated financial statements.

4 

First Connecticut Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended September 30,
(Dollars in thousands)	2016			2015
Cash flows from operating activities
Net income	$	11,029		$	10,198
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses		1,716			1,664
(Reversal of) provision for off-balance sheet commitments		(415	)		38
Depreciation and amortization		1,783			1,990
Amortization of ESOP expense		1,185			1,107
Share based compensation expense		1,776			2,468
Gain on sale of investments		-			(1,523	)
Loans originated for sale		(127,615	)		(170,638	)
Proceeds from the sale of loans held for sale		133,970			166,564
Loss on disposal of premises and equipment		71			51
Gain on fair value adjustment for mortgage banking derivatives		(146	)		(52	)
Impairment losses on alternative investments		219			144
Mortgage servicing rights impairment		283			-
Writedowns on foreclosed real estate		21			-
Loss (gain) on sale of foreclosed real estate		71			(567	)
Net gain on loans sold		(2,180	)		(1,925	)
Accretion of investment security discounts and premuims, net		(82	)		(47	)
Change in net deferred loan costs		42			(205	)
Decrease (increase) in accrued income receivable		334			(528	)
Deferred income tax		(142	)		1,255
Increase in cash surrender value of bank-owned life insurance		(974	)		(947	)
Increase in prepaid expenses and other assets		(13,668	)		(8,721	)
Increase in accrued expenses and other liabilities		15,487			3,799
Net cash provided by operating activities		22,765			4,125
Cash flows from investing activities
Maturities, calls and principal payments of securities held-to-maturity		24,908			24,738
Maturities, calls and principal payments of securities available-for-sale		129,203			215,934
Purchases of securities held-to-maturity		-			(34,000	)
Purchases of securities available-for-sale		(130,015	)		(199,062	)
Loan originations, net of principal repayments		(115,449	)		(201,790	)
Redemptions (purchases) of Federal Home Loan Bank of Boston stock, net		6,590			(3,253	)
Proceeds from (purchase of) bank-owned life insurance		228			(10,000	)
Proceeds from sale of foreclosed real estate		375			2,620
Purchases of premises and equipment		(1,672	)		(1,038	)
Net cash used in investing activities		(85,832	)		(205,851	)
Cash flows from financing activities
Net payments on Federal Home Loan Bank of Boston advances		(157,000	)		(28,100	)
Decrease in repurchase agreement borrowings		-			(10,500	)
Net increase in demand deposits, NOW accounts, savings accounts and money market accounts		220,136			170,485
Net increase in time deposits		36,379			69,829
Net (decrease) increase in repurchase liabilities		(733	)		9,097
Stock options exercised		1,431			365
Excess tax expense from stock-based compensation		173			149
Cancellation of shares for tax withholding		(516	)		(498	)
Repurchase of common stock		(2,527	)		(1,963	)
Cash dividend paid		(3,475	)		(2,554	)
Net cash provided by financing activities		93,868			206,310
Net increase in cash and cash equivalents		30,801			4,584
Cash and cash equivalents at beginning of period		59,139			42,863
Cash and cash equivalents at end of period	$	89,940		$	47,447
Supplemental disclosure of cash flow information
Cash paid for interest	$	11,683		$	9,557
Cash paid for income taxes		4,337			4,007
Loans transferred to other real estate owned		189			1,991

The accompanying notes are an integral part of these consolidated financial statements.

5 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

1. Summary of Significant Accounting Policies

Organization and Business

First Connecticut Bancorp, Inc. is a Maryland-chartered bank holding company that wholly owns its only subsidiary, Farmington Bank (collectively with its subsidiary, the “Company”). Farmington Bank's main office is located in Farmington, Connecticut. Farmington Bank is a full-service, community bank with 24 branch locations throughout central Connecticut and western Massachusetts, offering commercial and residential lending as well as wealth management services. Farmington Bank's primary source of income is interest accrued on loans to customers, which include small and middle market businesses and individuals residing primarily in Connecticut and western Massachusetts. However, the Bank will selectively lend to borrowers in other northeastern states.

Wholly-owned subsidiaries of Farmington Bank are Farmington Savings Loan Servicing, Inc., a passive investment company that was established to service and hold loans collateralized by real property; Village Investments, Inc.; the Village Corp., Limited, and Village Square Holdings, Inc.; 28 Main Street Corp., is a subsidiary that was formed to hold residential other real estate owned and Village Management Corp., is a subsidiary that was formed to hold commercial other real estate owned, are presently inactive.

On June 21, 2013, the Company received regulatory approval to repurchase up to 1,676,452 shares, or 10% of its current outstanding common stock. During the nine months ended September 30, 2016, the Company had repurchased 156,800 of these shares at a cost of $2.5 million. Repurchased shares are held as treasury stock and are available for general corporate purposes. The Company has 600,945 shares remaining available to be repurchased at September 30, 2016.

Basis of Financial Statement Presentation

The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The Company has condensed or omitted certain information and footnote disclosures normally included in the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. All significant intercompany transactions and balances have been eliminated in consolidation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2015 included in the Company’s 10-K filed on March 11, 2016. The results of operations for the interim periods are not necessarily indicative of the results for the full year.

In preparing the consolidated financial statements, management is required to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of condition and revenues and expenses for the interim period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, investment security other-than-temporary impairment judgments and investment security valuation.

6 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Investment Securities

Marketable equity and debt securities are classified as either trading, available-for-sale, or held-to-maturity (applies only to debt securities). Management determines the appropriate classifications of securities at the time of purchase. At September 30, 2016 and December 31, 2015, the Company had no debt or equity securities classified as trading. Held-to-maturity securities are debt securities for which the Company has the ability and intent to hold until maturity. All other securities not included in held-to-maturity are classified as available-for-sale. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts on debt securities are amortized or accreted into interest income over the term of the securities using the level yield method. Available-for-sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported in accumulated other comprehensive income, a separate component of equity, until realized. Further information relating to the fair value of securities can be found within Note 4 of the Notes to Consolidated Financial Statements. In accordance with Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 320 — “Debt and Equity Securities”, a decline in market value of a debt security below amortized cost that is deemed other-than-temporary is charged to earnings for the credit related other-than-temporary impairment ("OTTI"), resulting in the establishment of a new cost basis for the security, while the non-credit related OTTI is recognized in other comprehensive income if there is no intent or requirement to sell the security. The securities portfolio is reviewed on a quarterly basis for the presence of other-than-temporary impairment. If an equity security is deemed other-than-temporarily impaired, the full impairment is considered to be credit-related and a charge to earnings would be recorded. Gains and losses on sales of securities are recognized at the time of sale on a specific identification basis.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the lower of amortized cost or fair value, as determined by aggregate outstanding commitments from investors or current investor yield requirements. Net unrealized losses, if any, are recognized through a valuation allowance by charges to other noninterest income in the accompanying Consolidated Statements of Income. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold on the trade date to net gain on loans sold in the accompanying Consolidated Statements of Income.

Loans

The Company’s loan portfolio segments include residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity lines of credit, demand, revolving credit and resort. Construction includes classes for commercial and residential construction.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. When loans are prepaid, sold or participated out, the unamortized portion is recognized as income or expense at that time.

7 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Interest on loans is accrued and recognized in interest income based on contractual rates applied to principal amounts outstanding. Accrual of interest is discontinued, and previously accrued income is reversed, when loan payments are more than 90 days past due or when, in the judgment of management, collectability of the loan or loan interest becomes uncertain. Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within a reasonable period and there is a sustained period of repayment performance (generally a minimum of six months) by the borrower, in accordance with contractual terms involving payment of cash or cash equivalents. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. If a residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort loan is on non-accrual status cash payments are applied towards the reduction of principal.  If loans are considered impaired but accruing, cash payments are applied first to interest income and then as a reduction of principal as specified in the contractual agreement, unless the collection of the remaining principal amount due is considered doubtful.

The policy for determining past due or delinquency status for all loan portfolio segments is based on the number of days past due or the contractual terms of the loan. A loan is considered delinquent when the customer does not make their payments due according to their contractual terms. Generally, a loan can be demanded at any time if the loan is delinquent or if the borrower fails to meet any other agreed upon terms and conditions.

On a quarterly basis, our loan policy requires that we evaluate for impairment all commercial real estate, construction, commercial and resort loan segments that are classified as non-accrual, loans secured by real property in foreclosure or are otherwise likely to be impaired, non-accruing residential and installment loan segments greater than $100,000 and all troubled debt restructurings.

Nonperforming loans consist of non-accruing loans, non-accruing loans identified as trouble debt restructurings and loans past due more than 90 days and still accruing interest.

Allowance for Loan Losses

The allowance for loan losses is maintained at a level believed adequate by management to absorb potential losses inherent in the loan portfolio as of the statement of condition date. The allowance for loan losses consists of a formula allowance following FASB ASC 450 — “Contingencies” and FASB ASC 310 — “Receivables”. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a quarterly basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, allocated and unallocated components, as further described below. All reserves are available to cover any losses regardless of how they are allocated.

General component:

The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the following loan segments: residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort. Construction loans include classes for commercial investment real estate construction, commercial owner occupied construction, residential development, residential subdivision construction and residential owner occupied construction loans. Management uses a rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies and nonaccrual loans; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no material changes in the Company’s policies or methodology pertaining to the general component of the allowance for loan losses during the nine months ended September 30, 2016.

8 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows:

Residential real estate — Residential real estate loans are generally originated in amounts up to 95.0% of the lesser of the appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio in excess of 80.0%. The Company does not grant subprime loans. All loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. All residential mortgage loans are underwritten pursuant to secondary market underwriting guidelines which include minimum FICO standards. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Commercial real estate — Loans in this segment are primarily originated to finance income-producing properties throughout the northeastern states. The underlying cash flows generated by the properties may be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, may have an effect on the credit quality in this segment. Management generally obtains rent rolls and other financial information, as appropriate on an annual basis and continually monitors the cash flows of these loans.

Construction loans — Loans in this segment include commercial construction loans, real estate subdivision development loans to developers, licensed contractors and builders for the construction and development of commercial real estate projects and residential properties. Construction lending contains a unique risk characteristic as loans are originated under market and economic conditions that may change between the time of origination and the completion and subsequent purchaser financing of the property. In addition, construction subdivision loans and commercial and residential construction loans to contractors and developers entail additional risks as compared to single-family residential mortgage lending to owner-occupants. These loans typically involve large loan balances concentrated in single borrowers or groups of related borrowers. Real estate subdivision development loans to developers, licensed contractors and builders are generally speculative real estate development loans for which payment is derived from sale of the property. Credit risk may be affected by cost overruns, time to sell at an adequate price, and market conditions. Construction financing is generally considered to involve a higher degree of credit risk than longer-term financing on improved, owner-occupied real estate. Residential construction credit quality may be impacted by the overall health of the economy, including unemployment rates and housing prices.

Commercial — Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Home equity line of credit — Loans in this segment include home equity loans and lines of credit underwritten with a loan-to-value ratio generally limited to no more than 80%, including any first mortgage. Our home equity lines of credit have ten-year terms and adjustable rates of interest which are indexed to the prime rate. The overall health of the economy, including unemployment rates and housing prices, may have an effect on the credit quality in this segment.

Installment, Collateral, Demand, Revolving Credit and Resort – Loans in these segments include loans principally to customers residing in our primary market area with acceptable credit ratings. Our installment and collateral consumer loans generally consist of loans on new and used automobiles, loans collateralized by deposit accounts and unsecured personal loans. The overall health of the economy, including unemployment rates and housing prices, may have an effect on the credit quality in this segment. Excluding collateral loans which are fully collateralized by a deposit account, repayment for loans in these segments is dependent on the credit quality of the individual borrower. The resort portfolio consists of a direct receivable loan outside the Northeast which is amortizing to its contractual obligations. The Company has exited the resort financing market with a residual portfolio remaining.

9 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Allocated component:

The allocated component relates to loans that are classified as impaired. Impairment is measured on a loan by loan basis for commercial real estate, construction, commercial and resort loans by the present value of expected cash flows discounted at the effective interest rate; the fair value of the collateral, if applicable; or the observable market price for the loan. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan is lower than the carrying value of that loan. The Company does not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement or they are nonaccrual loans with outstanding balances greater than $100,000.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Management updates the analysis quarterly. The assumptions used in appraisals are reviewed for appropriateness. Updated appraisals or valuations are obtained as needed or adjusted to reflect the estimated decline in the fair value based upon current market conditions for comparable properties.

The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring ("TDR"). All TDRs are classified as impaired.

Unallocated component:

An unallocated component is maintained, when needed, to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. The Company’s Loan Policy allows management to utilize a high and low range of 0.0% to 5.0% of our total allowance for loan losses when establishing an unallocated allowance, when considered necessary. The unallocated allowance is used to provide for an unidentified loss that may exist in emerging problem loans that cannot be fully quantified or may be affected by conditions not fully understood as of the balance sheet date. There was no unallocated allowance at September 30, 2016 and December 31, 2015.

10 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Troubled Debt Restructuring

A loan is considered a troubled debt restructuring (“TDR”) when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower in modifying or renewing the loan the Company would not otherwise consider. In connection with troubled debt restructurings, terms may be modified to fit the ability of the borrower to repay in line with their current financial status, which may include a reduction in the interest rate to market rate or below, a change in the term or movement of past due amounts to the back-end of the loan or refinancing. A loan is placed on non-accrual status upon being restructured, even if it was not previously, unless the modified loan was current for the six months prior to its modification and we believe the loan is fully collectable in accordance with its new terms. The Company’s policy to restore a restructured loan to performing status is dependent on the receipt of regular payments, generally for a period of six months and one calendar year-end. All troubled debt restructurings are classified as impaired loans and are reviewed for impairment by management on a quarterly basis per Company policy.

Foreclosed Real Estate

Real estate acquired through foreclosure comprises properties acquired in partial or total satisfaction of problem loans. The properties are acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. At the time these properties are foreclosed, the properties are initially recorded at the fair value at the date of foreclosure less estimated selling costs. Losses arising at the time of acquisition of such properties are charged against the allowance for loan losses. Subsequent loss provisions are charged to the foreclosed real estate valuation allowance and expenses incurred to maintain the properties are charged to noninterest expense. Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and a charge to operations is recorded as necessary to reduce the carrying amount to fair value less estimated costs to dispose. Revenue and expense from the operation of other real estate owned and the provision to establish and adjust valuation allowances are included in noninterest expenses. Costs relating to the development and improvement of the property are capitalized, subject to the limit of fair value of the collateral. In the Consolidated Statements of Financial Condition, total prepaid expenses and other assets include foreclosed real estate of $-0- and $279,000 as of September 30, 2016 and December 31, 2015, with no specific valuation allowance. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction totaled $4.5 million at September 30, 2016.

Pension and Other Postretirement Benefit Plans

The Company’s non-contributory defined-benefit pension plan and certain defined benefit postretirement plans were frozen as of February 28, 2013 and no additional benefits will accrue.

The Company has a non-contributory defined benefit pension plan that provides benefits for substantially all employees hired before January 1, 2007 who meet certain requirements as to age and length of service. The benefits are based on years of service and average compensation, as defined in the Plan Document. The Company’s funding practice is to meet the minimum funding standards established by the Employee Retirement Income Security Act of 1974.

In addition to providing pension benefits, we provide certain health care and life insurance benefits for retired employees. Participants or eligible employees hired before January 1, 1993 become eligible for the benefits if they retire after reaching age 62 with fifteen or more years of service. A fixed percent of annual costs are paid depending on length of service at retirement. The Company accrues for the estimated costs of these other post-retirement benefits through charges to expense during the years that employees render service. The Company makes contributions to cover the current benefits paid under this plan. The Company believes the policy for determining pension and other post-retirement benefit expenses is critical because judgments are required with respect to the appropriate discount rate, rate of return on assets and other items. The Company reviews and updates the assumptions annually. If the Company’s estimate of pension and post-retirement expense is too low it may experience higher expenses in the future, reducing its net income. If the Company’s estimate is too high, it may experience lower expenses in the future, increasing its net income.

11 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Income Taxes

Deferred income taxes are provided for differences arising in the timing of income and expenses for financial reporting and for income tax purposes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides a deferred tax asset valuation allowance for the estimated future tax effects attributable to temporary differences and carryforwards when realization is determined not to be more likely than not.

FASB ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Pursuant to FASB ASC 740-10, the Company examines its financial statements, its income tax provision and its federal and state income tax returns and analyzes its tax positions, including permanent and temporary differences, as well as the major components of income and expense to determine whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties arising from income tax settlements as part of its provision for income taxes.

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 provides guidance in accounting principles generally accepted in the United States of America about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company does not expect ASU 2014-15 to have a significant impact on its financial statements.

In August 2015, the FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers (Topic 606)." In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), with an original effective date for annual reporting periods beginning after December 15, 2016. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2015-14 deferred the effective date of ASU 2014-09 to annual periods and interim periods within those annual periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. Early application is not permitted. The Company is assessing the impact of ASU 2015-14 on its accounting and disclosures.

12 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments — Overall (Topic 825-10): "Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends the guidance on the classification and measurement of financial instruments. Some of the amendments in ASU 2016-01 include the following: 1) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and 4) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value; among others. For public business entities, the amendments of ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is assessing the impact of ASU 2016-01 on its accounting and disclosures.

In February 2016, the FASB issued ASU No. 2016-02 "Leases (Topic 842)." ASU 2016-02 supersedes Topic 840, Leases. This ASU is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Some of the provisions in ASU 2016-02 include the following: 1) requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease), 2) requires lessor accounting to be updated to align with certain changes to the lessee model and the new revenue recognition standard, 3) an arrangement contains an embedded lease if property, plant, or equipment is explicitly or implicitly identified and its use is controlled by the customer, 4) in certain circumstances, the lessee is required to remeasure the lease payments, and 5) requires extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing contracts. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is assessing the impact of ASU 2016-02 on its accounting and disclosures.

In March 2016, the FASB issued ASU No. 2016-07 "Investments — Equity Method and Joint Ventures (Topic 323) Simplifying the Transition to the Equity Method of Accounting." This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. For public business entities, ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The Company is assessing the impact of ASU 2016-07 on its accounting and disclosures.

In March 2016, the FASB issued ASU No. 2016-09 “Compensation — Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” This ASU requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election for forfeitures as they occur. For public business entities, ASU No. 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is assessing the impact of ASU 2016-09 on its accounting and disclosures.

13 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments — Credit Losses (Topic 326)" requires an entity to utilize a new impairment model known as the current expected credit loss ("CECL") model to estimate its lifetime "expected credit loss" and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This ASU also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. ASU 2016-13 is effective for public business entities for annual periods beginning after December 13, 2019, including interim periods within those fiscal years. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is assessing the impact of ASU 2016-13 on its accounting and disclosures.

In August 2016, the FASB issued ASU No. 2016-15 “Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides cash flow statement classification guidance for certain transactions including how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company is assessing the impact of ASU 2016-15 its accounting and disclosures.

2. Restrictions on Cash and Due from Banks

The Company is required to maintain a percentage of transaction account balances on deposit in non-interest-earning reserves with the Federal Reserve Bank, offset by the Company’s average vault cash. The Company also is required to maintain cash balances to collateralize the Company’s position with certain third parties. The Company had cash and liquid assets of approximately $30.4 million and $17.7 million to meet these requirements at September 30, 2016 and December 31, 2015, respectively.

3. Earnings Per Share

The following table sets forth the calculation of basic and diluted earnings per share:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands, except per share data):
Net income	$	3,773		$	4,215		$	11,029		$	10,198
Less:  Dividends to participating shares		-			(8	)		(18	)		(33	)
Income allocated to participating shares		(15	)		(63	)		(58	)		(127	)
Net income allocated to common stockholders	$	3,758		$	4,144		$	10,953		$	10,038
Weighted-average shares issued		17,968,628			17,998,820			17,974,118			18,003,666
Less:  Average unallocated ESOP shares		(897,948	)		(993,416	)		(921,630	)		(1,017,019	)
Average treasury stock		(2,156,167	)		(2,084,182	)		(2,167,900	)		(2,031,904	)
Average unvested restricted stock		(90,599	)		(288,271	)		(114,306	)		(247,835	)
Weighted-average basic shares outstanding		14,823,914			14,632,951			14,770,282			14,706,908
Plus: Average dilutive shares		368,092			254,510			322,827			176,454
Weighted-average diluted shares outstanding		15,192,006			14,887,461			15,093,109			14,883,362
Net earnings per share(1):
Basic	$	0.25		$	0.28		$	0.74		$	0.68
Diluted	$	0.25		$	0.28		$	0.73		$	0.67

(1)  Certain per share amounts may not appear to reconcile due to rounding.

For the nine months ended September 30, 2016 and 2015, respectively, 44,000 and 79,500 options were anti-dilutive and therefore excluded from the earnings per share calculation.

14 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

4. Investment Securities

Investment securities are summarized as follows:

	September 30, 2016
			Recognized in OCI							Not Recognized in OCI
			Gross		Gross					Gross		Gross
	Amortized		Unrealized		Unrealized			Carrying		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses			Value		Gains		Losses		Value
Available-for-sale
Debt securities:
U.S. Treasury obligations	$	19,814	$	275	$	-		$	20,089	$	-	$	-	$	20,089
U.S. Government agency obligations		102,986		168		(35	)		103,119		-		-		103,119
Government sponsored residential mortgage-backed securities		3,751		183		-			3,934		-		-		3,934
Corporate debt securities		1,000		24		-			1,024		-		-		1,024
Preferred equity securities		2,000		-		(132	)		1,868		-		-		1,868
Marketable equity securities		108		61		(2	)		167		-		-		167
Mutual funds		4,042		-		(149	)		3,893		-		-		3,893
Total securities available-for-sale	$	133,701	$	711	$	(318	)	$	134,094	$	-	$	-	$	134,094
Held-to-maturity
Government sponsored residential mortgage-backed securities	$	7,338	$	-	$	-		$	7,338	$	281	$	-	$	7,619
Total securities held-to-maturity	$	7,338	$	-	$	-		$	7,338	$	281	$	-	$	7,619

	December 31, 2015
			Recognized in OCI							Not Recognized in OCI
			Gross		Gross					Gross		Gross
	Amortized		Unrealized		Unrealized			Carrying		Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost		Gains		Losses			Value		Gains		Losses			Value
Available-for-sale
Debt securities:
U.S. Treasury obligations	$	38,782	$	83	$	(6	)	$	38,859	$	-	$	-		$	38,859
U.S. Government agency obligations		82,002		43		(240	)		81,805		-		-			81,805
Government sponsored residential mortgage-backed securities		4,958		195		-			5,153		-		-			5,153
Corporate debt securities		1,000		48		-			1,048		-		-			1,048
Preferred equity securities		2,000		-		(368	)		1,632		-		-			1,632
Marketable equity securities		108		54		(2	)		160		-		-			160
Mutual funds		3,957		-		(190	)		3,767		-		-			3,767
Total securities available-for-sale	$	132,807	$	423	$	(806	)	$	132,424	$	-	$	-		$	132,424
Held-to-maturity
U.S. Government agency obligations	$	24,000	$	-	$	-		$	24,000	$	28	$	(20	)	$	24,008
Government sponsored residential mortgage-backed securities		8,246		-		-			8,246		103		-			8,349
Total securities held-to-maturity	$	32,246	$	-	$	-		$	32,246	$	131	$	(20	)	$	32,357

15 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables summarize gross unrealized losses and fair value, aggregated by investment category and length of time the investments have been in a continuous unrealized loss position at September 30, 2016 and December 31, 2015:

	September 30, 2016
			Less than 12 Months					12 Months or More					Total
					Gross					Gross					Gross
	Number of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Securities		Value		Loss			Value		Loss			Value		Loss
Available-for-sale:
U.S. Government agency obligations		3	$	26,965	$	(35	)	$	-	$	-		$	26,965	$	(35	)
Preferred equity securities		1		-		-			1,868		(132	)		1,868		(132	)
Marketable equity securities		1		-		-			5		(2	)		5		(2	)
Mutual funds		1		-		-			3,893		(149	)		3,893		(149	)
Total investment securities in an unrealized loss position		6	$	26,965	$	(35	)	$	5,766	$	(283	)	$	32,731	$	(318	)

	December 31, 2015
			Less than 12 Months					12 Months or More					Total
					Gross					Gross					Gross
	Number of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Securities		Value		Loss			Value		Loss			Value		Loss
Available-for-sale:
U.S. Treasury obligations		4	$	19,935	$	(6	)	$	-	$	-		$	19,935	$	(6	)
U.S. Government agency obligations		7		56,762		(240	)		-		-			56,762		(240	)
Preferred equity securities		1		-		-			1,632		(368	)		1,632		(368	)
Marketable equity securities		1		-		-			5		(2	)		5		(2	)
Mutual funds		1		-		-			2,768		(190	)		2,768		(190	)
		14	$	76,697	$	(246	)	$	4,405	$	(560	)	$	81,102	$	(806	)
Held-to-maturity
U.S. Government agency obligations		1	$	6,980	$	(20	)	$	-	$	-		$	6,980	$	(20	)
		1		6,980		(20	)		-		-			6,980		(20	)
Total investment securities in an unrealized loss position		15	$	83,677	$	(266	)	$	4,405	$	(560	)	$	88,082	$	(826	)

Management believes that no individual unrealized loss as of September 30, 2016 represents an other-than-temporary impairment (“OTTI”), based on its detailed review of the securities portfolio. The Company has no intent to sell nor is it more likely than not that the Company will be required to sell any of the securities in a loss position during the period of time necessary to recover the unrealized losses, which may be until maturity.

The following summarizes the conclusions from our OTTI evaluation for those security types that incurred significant gross unrealized losses greater than twelve months as of September 30, 2016:

Preferred equity securities — The unrealized loss on preferred equity securities in a loss position for 12 months or more relates to one preferred equity security. This investment is in a global financial institution. When estimating the recovery period for securities in an unrealized loss position, management utilizes analyst forecasts, earnings assumptions and other company-specific financial performance metrics. In addition, this assessment incorporates general market data, industry and sector cycles and related trends to determine a reasonable recovery period. Management evaluated the near-term prospects of the issuer in relation to the severity and duration of the impairment. Management concluded that the preferred equity security is not other-than-temporarily impaired at September 30, 2016.

Mutual funds — The unrealized loss on mutual funds in a loss position for 12 months or more relates to one mutual fund. The fund invests primarily in high quality debt securities and other debt instruments supporting the affordable housing industry in areas of the United States designated by fund shareholders. When estimating the recovery period for securities in an unrealized loss position, management utilizes analyst forecasts, earnings assumptions and other fund-specific financial performance metrics. In addition, this assessment incorporates general market data, industry and sector cycles and related trends to determine a reasonable recovery period. Management evaluated the near-term prospects of the fund in relation to the severity and duration of the impairment. Management concluded that the mutual fund is not other-than-temporarily impaired at September 30, 2016.

16 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The Company recorded no other-than-temporary impairment charges to the investment securities portfolios for the three and nine months ended September 30, 2016 and 2015.

There were no gross realized gains on sales of securities available-for-sale for the three and nine months ended September 30, 2016. There were gross realized gains on sales of securities available-for-sale totaling $-0- and $1.5 million for the three and nine months ended September 30, 2015, respectively

As of September 30, 2016 and December 31, 2015, U.S. Treasury, U.S. Government agency obligations and Government sponsored residential mortgage-backed securities with a fair value of $115.8 million and $112.4 million, respectively, were pledged as collateral for loan derivatives, public funds, repurchase liabilities and repurchase agreement borrowings.

The amortized cost and estimated fair value of debt securities at September 30, 2016 and December 31, 2015 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or repayment penalties:

	September 30, 2016
	Available-for-Sale				Held-to-Maturity
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(Dollars in thousands)
Due in one year or less	$	42,485	$	42,494	$	-	$	-
Due after one year through five years		81,315		81,738		-		-
Due after five years through ten years		-		-		-		-
Due after ten years		-		-		-		-
Government sponsored residential mortgage-backed securities		3,751		3,934		7,338		7,619
	$	127,551	$	128,166	$	7,338	$	7,619

	December 31, 2015
	Available-for-Sale				Held-to-Maturity
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(Dollars in thousands)
Due in one year or less	$	54,499	$	54,511	$	-	$	-
Due after one year through five years		67,285		67,201		24,000		24,008
Due after five years through ten years		-		-		-		-
Due after ten years		-		-		-		-
Government sponsored residential mortgage-backed securities		4,958		5,153		8,246		8,349
	$	126,742	$	126,865	$	32,246	$	32,357

17 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Federal Home Loan Bank of Boston (“FHLBB”) Stock

The Company, as a member of the FHLBB, owned $15.1 million and $21.7 million of FHLBB capital stock at September 30, 2016 and December 31, 2015, respectively, which is equal to its FHLBB capital stock requirement. The Company evaluated its FHLBB capital stock for potential other-than-temporary impairment at September 30, 2016. Capital adequacy, credit ratings, the value of the stock, overall financial condition of the FHLB system and FHLBB as well as current economic factors were analyzed in the impairment analysis. The Company concluded that its position in FHLBB capital stock is not other-than-temporarily impaired at September 30, 2016.

Alternative Investments

Alternative investments, which totaled $2.3 million at September 30, 2016 and December 31, 2015, are included in other assets in the accompanying Consolidated Statements of Financial Condition. The Company’s alternative investments include investments in certain non-public funds, which include limited partnerships, an equity fund and membership stocks. These investments are held at cost and were evaluated for potential other-than-temporary impairment at September 30, 2016. The Company recognized a $219,000 and $144,000 other-than-temporary impairment charge on its limited partnerships for the nine months ended September 30, 2016 and 2015, respectively, included in other noninterest income in the accompanying Consolidated Statements of Income. The Company recognized profit distributions in its limited partnerships of $179,000 and $26,000 for the nine months ended September 30, 2016 and 2015, respectively. See a further discussion of fair value in Note 15 — Fair Value Measurements. The Company has $619,000 in unfunded commitments remaining for its alternative investments as of September 30, 2016.

5. Loans and Allowance for Loan Losses

Loans consisted of the following:

	September 30,			December 31,
	2016			2015
(Dollars in thousands)
Real estate:
Residential	$	864,054		$	849,722
Commercial		931,703			887,431
Construction		50,083			30,895
Installment		3,211			2,970
Commercial		449,008			409,550
Collateral		1,621			1,668
Home equity line of credit		172,148			174,701
Revolving credit		82			91
Resort		512			784
Total loans		2,472,422			2,357,812
Net deferred loan costs		3,942			3,984
Loans		2,476,364			2,361,796
Allowance for loan losses		(21,263	)		(20,198	)
Loans, net	$	2,455,101		$	2,341,598

18 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Changes in the allowance for loan losses by segments for the three and nine months ended September 30, 2016 and 2015 are as follows:

	For the Three Months Ended September 30, 2016
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses		Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	3,744	$	(57	)	$	-	$	157	$	3,844
Commercial		10,489		-			-		151		10,640
Construction		327		-			-		102		429
Installment		39		(2	)		-		1		38
Commercial		4,630		(28	)		-		177		4,779
Collateral		-		-			-		-		-
Home equity line of credit		1,491		(13	)		-		55		1,533
Revolving credit		-		(62	)		7		55		-
Resort		-		-			-		-		-
	$	20,720	$	(162	)	$	7	$	698	$	21,263

	For the Three Months Ended September 30, 2015
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,452	$	(2	)	$	95	$	(432	)	$	4,113
Commercial		9,001		-			-		464			9,465
Construction		361		-			-		(135	)		226
Installment		36		-			-		(2	)		34
Commercial		3,745		(4	)		6		348			4,095
Collateral		-		-			-		-			-
Home equity line of credit		1,986		-			-		91			2,077
Revolving credit		-		(58	)		6		52			-
Resort		-		-			-		-			-
	$	19,581	$	(64	)	$	107	$	386		$	20,010

19 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

	For the Nine Months Ended September 30, 2016
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,084	$	(81	)	$	1	$	(160	)	$	3,844
Commercial		10,255		-			-		385			10,640
Construction		231		-			-		198			429
Installment		39		(3	)		-		2			38
Commercial		4,119		(370	)		10		1,020			4,779
Collateral		-		(10	)		-		10			-
Home equity line of credit		1,470		(13	)		-		76			1,533
Revolving credit		-		(209	)		24		185			-
Resort		-		-			-		-			-
	$	20,198	$	(686	)	$	35	$	1,716		$	21,263

	For the Nine Months Ended September 30, 2015
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,382	$	(195	)	$	111	$	(185	)	$	4,113
Commercial		8,949		(213	)		-		729			9,465
Construction		478		-			-		(252	)		226
Installment		41		(3	)		-		(4	)		34
Commercial		3,250		(24	)		6		863			4,095
Collateral		-		-			-		-			-
Home equity line of credit		1,859		(138	)		-		356			2,077
Revolving credit		-		(179	)		21		158			-
Resort		1		-			-		(1	)		-
	$	18,960	$	(752	)	$	138	$	1,664		$	20,010

20 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table lists the allocation of the allowance by impairment methodology and by loan segment at September 30, 2016 and December 31, 2015:

	September 30, 2016				December 31, 2015
(Dollars in thousands)	Total		Reserve Allocation		Total		Reserve Allocation
Loans individually evaluated for impairment:
Real estate:
Residential	$	12,577	$	141	$	12,377	$	139
Commercial		15,089		19		16,152		26
Construction		4,719		-		4,719		-
Installment		230		7		259		8
Commercial		2,604		297		6,023		361
Collateral		-		-		-		-
Home equity line of credit		1,867		-		703		-
Revolving credit		-		-		-		-
Resort		512		-		784		-
		37,598		464		41,017		534
Loans collectively evaluated for impairment:
Real estate:
Residential	$	856,224	$	3,703	$	841,921	$	3,945
Commercial		915,861		10,621		870,757		10,229
Construction		45,364		429		26,176		231
Installment		2,974		31		2,695		31
Commercial		446,359		4,482		403,473		3,758
Collateral		1,621		-		1,668		-
Home equity line of credit		170,281		1,533		173,998		1,470
Revolving credit		82		-		91		-
Resort		-		-		-		-
		2,438,766		20,799		2,320,779		19,664
Total	$	2,476,364	$	21,263	$	2,361,796	$	20,198

21 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following is a summary of loan delinquencies at recorded investment values at September 30, 2016 and December 31, 2015:

	September 30, 2016
	30-59 Days				60-89 Days				> 90 Days								Past Due 90 Days or More
(Dollars in thousands)	Past Due				Past Due				Past Due				Total				and Still
	Number		Amount		Number		Amount		Number		Amount		Number		Amount		Accruing
Real estate:
Residential		12	$	2,476		12	$	1,445		16	$	7,382		40	$	11,303	$	-
Commercial		-		-		-		-		1		914		1		914		-
Construction		-		-		1		4,532		1		187		2		4,719		-
Installment		-		-		1		24		-		-		1		24		-
Commercial		2		45		1		64		2		458		5		567		-
Collateral		4		32		-		-		-		-		4		32		-
Home equity line of credit		3		317		-		-		2		327		5		644		-
Demand		1		35		-		-		-		-		1		35		-
Revolving credit		-		-		-		-		-		-		-		-		-
Resort		-		-		-		-		-		-		-		-		-
Total		22	$	2,905		15	$	6,065		22	$	9,268		59	$	18,238	$	-

	December 31, 2015
	30-59 Days				60-89 Days				> 90 Days								Past Due 90 Days or More
(Dollars in thousands)	Past Due				Past Due				Past Due				Total				and Still
	Number		Amount		Number		Amount		Number		Amount		Number		Amount		Accruing
Real estate:
Residential		18	$	3,379		5	$	863		15	$	6,304		38	$	10,546	$	-
Commercial		2		318		-		-		1		994		3		1,312		-
Construction		-		-		-		-		1		187		1		187		-
Installment		3		38		-		-		-		-		3		38		-
Commercial		4		153		-		-		2		1,752		6		1,905		-
Collateral		7		68		-		-		1		10		8		78		-
Home equity line of credit		3		280		2		360		2		210		7		850		-
Demand		1		29		-		-		-		-		1		29		-
Revolving credit		-		-		-		-		-		-		-		-		-
Resort		-		-		-		-		-		-		-		-		-
Total		38	$	4,265		7	$	1,223		22	$	9,457		67	$	14,945	$	-

22 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Nonperforming assets consist of non-accruing loans including non-accruing loans identified as troubled debt restructurings, loans past due more than 90 days and still accruing interest and other real estate owned. The following table lists nonperforming assets at:

	September 30,		December 31,
(Dollars in thousands)	2016		2015
Nonaccrual loans:
Real estate:
Residential	$	9,575	$	9,773
Commercial		1,008		1,106
Construction		4,719		187
Installment		24		32
Commercial		1,677		3,232
Collateral		11		10
Home equity line of credit		815		573
Revolving credit		-		-
Resort		-		-
Total nonaccruing loans		17,829		14,913
Loans 90 days past due and still accruing		-		-
Other real estate owned		-		279
Total nonperforming assets	$	17,829	$	15,192

23 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following is a summary of information pertaining to impaired loans at September 30, 2016 and December 31, 2015:

	September 30, 2016						December 31, 2015
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans without a valuation allowance:
Real estate:
Residential	$	11,616	$	13,168	$	-	$	11,530	$	12,878	$	-
Commercial		12,208		12,336		-		13,233		13,303		-
Construction		4,719		4,964		-		4,719		4,965		-
Installment		205		222		-		202		202		-
Commercial		2,029		2,255		-		3,921		4,066		-
Collateral		-		-		-		-		-		-
Home equity line of credit		1,867		1,910		-		703		719		-
Revolving credit		-		-		-		-		-		-
Resort		512		512		-		784		784		-
Total		33,156		35,367		-		35,092		36,917		-
Impaired loans with a valuation allowance:
Real estate:
Residential		961		980		141		847		881		139
Commercial		2,881		2,881		19		2,919		2,919		26
Construction		-		-		-		-		-		-
Installment		25		25		7		57		72		8
Commercial		575		1,267		297		2,102		2,457		361
Collateral		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-
Revolving credit		-		-		-		-		-		-
Resort		-		-		-		-		-		-
Total		4,442		5,153		464		5,925		6,329		534
Total impaired loans	$	37,598	$	40,520	$	464	$	41,017	$	43,246	$	534

24 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table summarizes average recorded investment and interest income recognized on impaired loans:

			Three Months		Nine Months				Three Months		Nine Months
			Ended		Ended				Ended		Ended
	September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	2016		2016		2016		2015		2015		2015
	Average		Interest		Interest		Average		Interest		Interest
	Recorded		Income		Income		Recorded		Income		Income
(Dollars in thousands)	Investment		Recognized		Recognized		Investment		Recognized		Recognized
Impaired loans without a valuation allowance:
Real estate:
Residential	$	11,394	$	22	$	71	$	9,204	$	25	$	78
Commercial		12,850		125		396		13,817		144		433
Construction		4,719		-		69		4,719		35		103
Installment		211		3		9		243		3		11
Commercial		2,552		8		27		4,083		27		82
Collateral		-		-		-		-		-		-
Home equity line of credit		1,417		9		18		1,010		2		3
Revolving Credit		-		-		-		-		-		-
Resort		648		5		17		841		5		20
Total		33,791		172		607		33,917		241		730
Impaired loans with a valuation allowance:
Real estate:
Residential		876		8		33		2,308		9		27
Commercial		2,900		35		105		4,086		36		122
Construction		-		-		-		-		-		-
Installment		33		-		1		29		-		-
Commercial		1,256		1		3		1,694		3		13
Collateral		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-
Revolving Credit		-		-		-		-		-		-
Resort		-		-		-		-		-		-
Total		5,065		44		142		8,117		48		162
Total impaired loans	$	38,856	$	216	$	749	$	42,034	$	289	$	892

There was no interest income recognized on a cash basis method of accounting for the three and nine months ended September 30, 2016 and 2015.

25 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables present information on loans whose terms had been modified in a troubled debt restructuring at September 30, 2016 and December 31, 2015:

	September 30, 2016
	TDRs on Accrual Status				TDRs on Nonaccrual Status				Total TDRs
(Dollars in thousands)	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Real estate:
Residential		14	$	2,549		9	$	4,691		23	$	7,240
Commercial		3		5,972		-		-		3		5,972
Construction		-		-		2		4,719		2		4,719
Installment		4		206		1		24		5		230
Commercial		3		600		8		1,220		11		1,820
Collateral		-		-		-		-		-		-
Home equity line of credit		8		1,076		1		58		9		1,134
Revolving credit		-		-		-		-		-		-
Resort		1		512		-		-		1		512
Total		33	$	10,915		21	$	10,712		54	$	21,627

	December 31, 2015
	TDRs on Accrual Status				TDRs on Nonaccrual Status				Total TDRs
(Dollars in thousands)	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Real estate:
Residential		14	$	2,242		11	$	5,557		25	$	7,799
Commercial		4		6,664		-		-		4		6,664
Construction		1		4,532		1		187		2		4,719
Installment		4		227		2		32		6		259
Commercial		6		2,350		8		1,482		14		3,832
Collateral		-		-		-		-		-		-
Home equity line of credit		3		153		-		-		3		153
Revolving credit		-		-		-		-		-		-
Resort		1		784		-		-		1		784
Total		33	$	16,952		22	$	7,258		55	$	24,210

The recorded investment balance of TDRs were $21.6 million and $24.2 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016 and December 31, 2015, the majority of the Company’s TDRs are on accrual status. TDRs on accrual status were $10.9 million and $17.0 million while TDRs on nonaccrual status were $10.7 million and $7.3 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016, 100% of the accruing TDRs have been performing in accordance with the restructured terms. At September 30, 2016 and December 31, 2015, the allowance for loan losses included specific reserves of $282,000 and $340,000 related to TDRs, respectively. For the nine months ended September 30, 2016 and 2015, the Bank had charge-offs totaling $28,000 and $204,000, respectively, related to portions of TDRs deemed to be uncollectible. The Bank may provide additional funds to borrowers in TDR status. The amount of additional funds available to borrowers in TDR status was $87,000 and $272,000 at September 30, 2016 and December 31, 2015, respectively.

26 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables include the recorded investment and number of modifications for modified loans. The Company reports the recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured for the three and nine months ended September 30, 2016 and 2015:

	For the Three Months Ended September 30, 2016						For the Nine Months Ended September 30, 2016
(Dollars in thousands)	Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)		Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)
Troubled Debt Restructurings:
Real estate
Residential		1	$	231	$	231		1	$	231	$	231
Commercial		1		117		117		1		117		117
Home equity line of credit		-		-		-		6		985		982
Total		2	$	348	$	348	$	8	$	1,333	$	1,330

	For the Three Months Ended September 30, 2015						For the Nine Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)		Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)
Troubled Debt Restructurings:
Real estate
Residential		2	$	507	$	507		8	$	1,549	$	1,536
Commercial		-		-		-		1		493		487
Installment		-		-		-		1		44		41
Commercial		-		-		-		3		133		129
Home equity line of credit		-		-		-		3		153		153
Total		2	$	507	$	507		16	$	2,372	$	2,346

(1)  The period end balances are inclusive of all partial paydowns and charge-offs since the modification date.  TDRs fully paid off, charged-off or foreclosed upon

by period end are not included.

The following tables provide TDR loans that were modified by means of extended maturity, below market adjusted interest rates, a combination of rate and maturity, or by other means including covenant modifications, forbearance and/or the concessions and borrowers discharged in bankruptcy for the three and nine months ended September 30, 2016 and 2015:

	For the Three Months Ended September 30, 2016
(Dollars in thousands)	Number of Modifications		Extended Maturity		Adjusted Interest Rates		Combination of Rate and Maturity		Other		Total
Real estate
Residential		1	$	-	$	-	$	-	$	231	$	231
Commercial		1		117		-		-		-		117
Total		2	$	117	$	-	$	-	$	231	$	348

	For the Nine Months Ended September 30, 2016
(Dollars in thousands)	Number of Modifications		Extended Maturity		Adjusted Interest Rates		Combination of Rate and Maturity		Other		Total
Real estate
Residential		1	$	-	$	-	$	-	$	231	$	231
Commercial		1		117		-		-		-		117
Home equity line of credit		6		-		-		-		982		982
Total		8	$	117	$	-	$	-	$	1,213	$	1,330

27 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

	For the Three Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Extended Maturity		Adjusted Interest Rates		Combination of Rate and Maturity		Other		Total
Real estate
Residential		2	$	-	$	-	$	-	$	507	$	507
Total		2	$	-	$	-	$	-	$	507	$	507

	For the Nine Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Extended Maturity		Adjusted Interest Rates		Combination of Rate and Maturity		Other		Total
Real estate
Residential		8	$	-	$	-	$	-	$	1,536	$	1,536
Commercial		1		-		-		-		487		487
Installment		1		-		-		-		41		41
Commercial		3		-		-		34		95		129
Home equity line of credit		3		-		-		-		153		153
Total		16	$	-	$	-	$	34	$	2,312	$	2,346

A TDR is considered to be in re-default once it is more than 30 days past due following a modification. There were no loans that defaulted during the twelve month period preceding the modification date during the three and nine months ended September 30, 2016. The following loans defaulted during the twelve month period preceding the modification date during the three and nine months ended September 30, 2015.

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2015				September 30, 2015
(Dollars in thousands)	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(1)
Real estate
Residential		1	$	319		1	$	319
Installment		1		33		1		33
Total		2	$	352		2	$	352

(1) The period end balances are inclusive of all partial paydowns and charge-offs since the modification date. TDRs fully paid off, charged-off or foreclosed upon by period end are not included.

28 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Credit Quality Information

At the time of loan origination, a risk rating based on a nine point grading system is assigned to each commercial-related loan based on the loan officer’s and management’s assessment of the risk associated with each particular loan. This risk assessment is based on an in depth analysis of a variety of factors. More complex loans and larger commitments require the Company’s internal credit risk management department further evaluate the risk rating of the individual loan or relationship, with credit risk management having final determination of the appropriate risk rating. These more complex loans and relationships receive ongoing periodic review to assess the appropriate risk rating on a post-closing basis with changes made to the risk rating as the borrower’s and economic conditions warrant. The Company’s risk rating system is designed to be a dynamic system and we grade loans on a “real time” basis. The Company places considerable emphasis on risk rating accuracy, risk rating justification, and risk rating triggers. The Company’s risk rating process has been enhanced with its implementation of industry-based risk rating “cards.” The cards are used by the loan officers and promote risk rating accuracy and consistency on an institution-wide basis. Most loans are reviewed annually as part of a comprehensive portfolio review conducted by management and/or by an independent loan review firm. More frequent reviews of loans rated low pass, special mention, substandard and doubtful are conducted by the credit risk management department. The Company utilizes an independent loan review consulting firm to review its rating accuracy and the overall credit quality of its loan portfolio. The review is designed to provide an evaluation of the portfolio with respect to risk rating profile as well as with regard to the soundness of individual loan files. The individual loan reviews include an analysis of the creditworthiness of obligors, via appropriate key ratios and cash flow analysis and an assessment of collateral protection. The consulting firm conducts two loan reviews per year aiming at a 65.0% or higher commercial and industrial loans and commercial real estate portfolio penetration. Summary findings of all loan reviews performed by the outside consulting firm are reported to the board of directors and senior management of the Company upon completion.

The Company utilizes a point risk rating scale as follows:

Risk Rating Definitions

Residential and consumer loans are not rated unless they are 45 days or more delinquent, in which case, depending on past-due days, they will be rated 6, 7 or 8.

Loans rated 1 – 5, 55:	Commercial loans in these categories are considered “pass” rated loans with low to average risk.
Loans rated 6:	Residential, Consumer and Commercial loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management.
Loans rated 7:	Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected.
Loans rated 8:	Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.
Loans rated 9:	Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted.

29 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table presents the Company’s loans by risk rating at September 30, 2016 and December 31, 2015:

	September 30, 2016
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Real estate:
Residential	$	853,388	$	762	$	9,904	$	-	$	864,054
Commercial		917,459		4,610		9,634		-		931,703
Construction		45,364		-		4,719		-		50,083
Installment		3,161		26		24		-		3,211
Commercial		429,921		5,772		13,198		117		449,008
Collateral		1,610		-		11		-		1,621
Home equity line of credit		171,105		39		1,004		-		172,148
Revolving credit		82		-		-		-		82
Resort		512		-		-		-		512
Total Loans	$	2,422,602	$	11,209	$	38,494	$	117	$	2,472,422

	December 31, 2015
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Real estate:
Residential	$	838,314	$	1,154	$	10,254	$	-	$	849,722
Commercial		867,531		10,861		9,039		-		887,431
Construction		26,176		-		4,719		-		30,895
Installment		2,886		52		32		-		2,970
Commercial		390,719		10,354		8,311		166		409,550
Collateral		1,647		-		21		-		1,668
Home equity line of credit		173,879		229		593		-		174,701
Revolving credit		91		-		-		-		91
Resort		784		-		-		-		784
Total Loans	$	2,302,027	$	22,650	$	32,969	$	166	$	2,357,812

The Company places considerable emphasis on the early identification of problem assets, problem-resolution and minimizing loss exposure. Delinquency notices are mailed monthly to all delinquent borrowers, advising them of the amount of their delinquency. Residential and consumer lending borrowers are typically given 30 days to pay the delinquent payments or to contact us to make arrangements to bring the loan current over a longer period of time. Generally, if a residential or consumer lending borrower fails to bring the loan current within 90 days from the original due date or to make arrangements to cure the delinquency over a longer period of time, the matter is referred to legal counsel and foreclosure or other collection proceedings are initiated. The Company may consider forbearance or a loan restructuring in certain circumstances where a temporary loss of income is the primary cause of the delinquency, and if a reasonable plan is presented by the borrower to cure the delinquency in a reasonable period of time after his or her income resumes. Problem or delinquent borrowers in our commercial real estate, commercial business and resort portfolios are handled on a case-by-case basis, typically by our Special Assets Department. Appropriate problem-resolution and workout strategies are formulated based on the specific facts and circumstances.

30 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

6. Mortgage Servicing Rights

The Company services residential real estate mortgage loans that it has sold without recourse to third parties. The carrying value of mortgage servicing rights was $4.4 million and $4.4 million at September 30, 2016 and December 31, 2015, respectively, and the balance is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Financial Condition. The fair value of mortgage servicing rights approximated $4.4 million and $5.0 million at September 30, 2016 and December 31, 2015, respectively. Mortgage servicing rights impairment totaling $283,000 and $-0- for the nine months ended September 30, 2016 and 2015, respectively, is included as a component of other noninterest income in the accompanying Consolidated Statements of Income. Total loans sold with servicing rights retained were $106.9 million and $149.2 million for the nine months ended September 30, 2016 and 2015, respectively. The net gain on loans sold totaled $2.2 million and $1.9 million for the nine months ended September 30, 2016 and 2015, respectively, and is included in the accompanying Consolidated Statements of Income.

The principal balance of loans serviced for others, which are not included in the accompanying Consolidated Statements of Financial Condition, totaled $522.4 million and $457.5 million at September 30, 2016 and December 31, 2015, respectively. Loan servicing fees for others totaling $897,000 and $653,000 for the nine months ended September 30, 2016 and 2015, respectively, are included as a component of other noninterest income in the accompanying Consolidated Statements of Income.

7. Credit Arrangements

The Company has access to a pre-approved line of credit with the Federal Home Loan Bank of Boston (“FHLBB”) for $8.8 million, which was undrawn at September 30, 2016 and December 31, 2015. The Company has access to pre-approved unsecured lines of credit with financial institutions totaling $55.0 million and $45.0 million, which were undrawn at September 30, 2016 and December 31, 2015, respectively. The Company has access to a $3.5 million unsecured line of credit agreement with a bank which expires on August 31, 2017. The line was undrawn at September 30, 2016 and December 31, 2015. The Company maintains a cash balance of $512,500 with certain financial institutions to avoid fees associated with the lines.

In accordance with an agreement with the FHLBB, the Company is required to maintain qualified collateral, as defined in the FHLBB Statement of Credit Policy, free and clear of liens, pledges and encumbrances, as collateral for the advances, if any, and the preapproved line of credit. The Company is in compliance with these collateral requirements.

FHLBB advances totaled $220.6 million and $377.6 million at September 30, 2016 and December 31, 2015, respectively. Advances from the FHLBB are collateralized by first residential and commercial mortgages and home equity lines of credit with an estimated eligible collateral value of $1.2 billion and $1.3 billion at September 30, 2016 and December 31, 2015, respectively. The Company had available borrowings of $518.5 million and $407.8 million at September 30, 2016 and December 31, 2015, respectively, subject to collateral requirements of the FHLBB. The Company also had letters of credit of $95.5 million and $63.0 million at September 30, 2016 and December 31, 2015, respectively, subject to collateral requirements of the FHLBB. The Company is required to acquire and hold shares of capital stock in the FHLBB in an amount at least equal to the sum of 0.35% of the aggregate principal amount of its unpaid residential mortgage loans and similar obligations at the beginning of each year, or up to 4.5% of its advances (borrowings) from the FHLBB. The carrying value of FHLBB stock approximates fair value based on the redemption provisions of the stock.

The Company participates in the Federal Reserve Bank’s discount window loan collateral program that enables the Company to borrow up to $66.6 million and $63.2 million on an overnight basis at September 30, 2016 and December 31, 2015, respectively, and was undrawn as of September 30, 2016 and December 31, 2015. The funding arrangement was collateralized by $135.1 million and $136.6 million in pledged commercial real estate loans as of September 30, 2016 and December 31, 2015, respectively.

31 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The Bank has a Master Repurchase Agreement borrowing facility with a broker. Borrowings under the Master Repurchase Agreement are secured by the Company’s investments in certain securities with a fair value of $11.0 million and $11.3 million at September 30, 2016 and December 31, 2015, respectively. Outstanding borrowings totaled $10.5 million at September 30, 2016 and December 31, 2015.

The Bank offers overnight repurchase liability agreements to commercial or municipal customers whose excess deposit account balances are swept daily into collateralized repurchase liability accounts. The overnight repurchase liability agreements do not contain master netting arrangements. The Bank had repurchase liabilities outstanding of $35.0 million and $35.8 million at September 30, 2016 and December 31, 2015, respectively. They are secured by the Company’s investment in specific issues of U.S. Treasury obligations, Government sponsored residential mortgage-backed securities and U.S. Government agency obligations with a market value of $41.4 million and $40.4 million as of September 30, 2016 and December 31, 2015, respectively.

8. Deposits

Deposit balances are as follows:

	September 30,		December 31,
	2016		2015
(Dollars in thousands)
Noninterest-bearing demand deposits	$	419,664	$	401,388
Interest-bearing
NOW accounts		590,213		468,054
Money market		536,979		460,737
Savings accounts		223,848		220,389
Time deposits		477,169		440,790
Total interest-bearing deposits		1,828,209		1,589,970
Total deposits	$	2,247,873	$	1,991,358

The Company has established a relationship to participate in a reciprocal deposit program with other financial institutions as a service to our customers. This program provides enhanced FDIC insurance to participating customers. The Company also has established a relationship for brokered deposits. There were brokered deposits totaling $43.2 million and $44.3 million at September 30, 2016 and December 31, 2015, respectively.

Time certificates of deposit in denominations of $250,000 or more approximated $106.3 million and $89.6 million at September 30, 2016 and December 31, 2015, respectively.

32 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

9. Pension and Other Postretirement Benefit Plans

The following tables set forth the components of net periodic pension and benefit costs.

	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands)
Service cost	$	-		$	-		$	14		$	14
Interest cost		264			259			30			30
Expected return on plan assets		(279	)		(362	)		-			-
Amortization:		-						-
Loss		176			178			-			3
Prior service cost		-			-			(13	)		(13	)
Net periodic benefit cost	$	161		$	75		$	31		$	34

	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands)
Service cost	$	-		$	-		$	42		$	43
Interest cost		789			777			90			91
Expected return on plan assets		(835	)		(1,086	)		-			-
Amortization:								-
Loss		528			532			-			9
Prior service cost		-			-			(38	)		(38	)
Net periodic benefit cost	$	482		$	223		$	94		$	105

The Company’s non-contributory defined-benefit pension plan and certain defined benefit postretirement plans were frozen as of February 28, 2013 and no additional benefits will accrue.

The Company’s funding practice is to meet the minimum funding standards established by the Employee Retirement Income Security Act of 1974. Since the supplemental plan and the postretirement benefit plans are unfunded, the Company accrues for the estimated costs of these plans through charges to expense during the year that employees render service. The Company makes contributions to cover the current benefits paid under these plans.

Employee Stock Ownership Plan

The Company established the ESOP to provide eligible employees the opportunity to own Company stock. The Company provided a loan to the Farmington Bank Employee Stock Ownership Plan Trust in the amount needed to purchase up to 1,430,416 shares of the Company’s common stock. The loan bears an interest rate equal to the Wall Street Journal Prime Rate plus one percentage point, adjusted annually, and provides for annual payments of interest and principal over the 15 year term of the loan. At September 30, 2016, the loan had an outstanding balance of $12.0 million and an interest rate of 4.50%. The Bank has committed to make contributions to the ESOP sufficient to support the debt service of the loan. The loan is secured by the unallocated shares purchased. The ESOP compensation expense was $1.2 million and $1.1 million for the nine months ended September 30, 2016 and 2015, respectively.

33 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Shares held by the ESOP include the following as of September 30, 2016:

Allocated	476,805
Committed to be released	71,391
Unallocated	882,220
	1,430,416

The fair value of unallocated ESOP shares was $15.7 million at September 30, 2016.

10. Stock Incentive Plans

In May 2016, the Company’s shareholders approved the First Connecticut Bancorp, Inc. 2016 Stock Incentive Plan (the “2016 Plan”). The 2016 Plan provides for a total of 300,000 shares of common stock for issuance upon the grant or exercise of awards. The Company has not issued any shares from the 2016 Plan as of September 30, 2016.

In August 2012, the Company implemented the First Connecticut Bancorp, Inc. 2012 Stock Incentive Plan (the “2012 Plan”). The 2012 Plan provides for a total of 2,503,228 shares of common stock for issuance upon the grant or exercise of awards. The Plan allows for the granting of 1,788,020 non-qualified stock options and 715,208 shares of restricted stock.

In accordance with generally accepted accounting principles for Share-Based Payments, the Company expenses the fair value of all share-based compensation grants over the requisite service periods. Under the 2012 Plan, stock options granted vested 20% immediately and will vest 20% at each annual anniversary of the grant date through 2016 and expire ten years after grant date. The Company recognizes compensation expense for the fair values of these awards, which vest on a straight-line basis over the requisite service period of the awards. Restricted shares granted vested 20% immediately and will vest 20% at each annual anniversary of the grant date through 2016. The product of the number of shares granted and the grant date market price of the Company’s common stock determines the fair value of restricted shares under the Company’s restricted stock plan. The Company recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period for the entire award.

The Company classifies share-based compensation for employees within “Salaries and employee benefits” and share-based payments for outside directors within “Other operating expenses” in the Consolidated Statements of Income. For the nine months ended September 30, 2016 and 2015, the Company recorded $1.8 million and $2.5 million of share-based compensation expense, respectively, comprised of $726,000 and $1.0 million of stock option expense, respectively and $1.1 million and $1.5 million of restricted stock expense, respectively. Expected future compensation expense relating to the 49,150 non-vested options outstanding at September 30, 2016, is $150,000 over the remaining weighted-average period of 2.32 years.

The fair value of the options awarded is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table. Expected volatility is based on the Company’s historical volatility and the historical volatility of a peer group as the Company does not have reliably determined stock price for the period needed that is at least equal to its expected term and the Company’s recent historical volatility may not reflect future expectations. The peer group consisted of financial institutions located in New England and the Mid-Atlantic regions of the United States based on whose common stock is traded on a national securities exchange, asset size, tangible capital ratio and earnings factors. The expected term of options granted is derived from using the simplified method due to the Company not having sufficient historical share option experience upon which to estimate an expected term. The risk-free rate is based on the grant date for a traded zero-coupon U.S. Treasury bond with a term equal to the option’s expected term.

34 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Weighted-average assumptions for the nine months ended September 30, 2016 and 2015:

	2016			2015
Weighted per share average fair value of options granted	$	3.00		$	3.33
Weighted-average assumptions:
Risk-free interest rate		1.53	%		1.61	%
Expected volatility		22.88	%		24.96	%
Expected dividend yield		2.13	%		1.99	%
Weighted-average dividend yield		1.91 - 2.25	%		1.50% - 2.35	%
Expected life of options granted		6.0 years			6.0 years

The following is a summary of the Company’s stock option activity and related information for its option grants for the nine months ended September 30, 2016.

	Number of Stock Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2015		1,656,157		$	13.11
Granted		9,000			16.52
Exercised		(110,131	)		13.00
Forfeited		(2,700	)		14.59
Expired		-			-
Outstanding at September 30, 2016		1,552,326		$	13.14		6.06	$	7,218
Exercisable at September 30, 2016		1,503,176		$	13.05		5.99	$	7,128

The total intrinsic value of options exercised during the nine months ended September 30, 2016 was $416,000.

The following is a summary of the status of the Company’s restricted stock for the nine months ended September 30, 2016.

	Number of Restricted Stock			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2015		126,290		$	12.95
Granted		-			-
Vested		(126,290	)		12.95
Forfeited		-			-
Unvested at September 30, 2016		-		$	-

35 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

11. Derivative Financial Instruments

Non-Hedge Accounting Derivatives/Non-designated Hedges:

The Company does not use derivatives for trading or speculative purposes. Interest rate swap derivatives not designated as hedges are offered to certain qualifying commercial customers and to manage the Company’s exposure to interest rate movements but do not meet the strict hedge accounting under FASB ASC 815, “Derivatives and Hedging”. The interest rate swap agreements enable these customers to synthetically fix the interest rate on variable interest rate loans. The customers pay a variable rate and enter into a fixed rate swap agreement with the Company. The credit risk associated with the interest rate swap derivatives executed with these customers is essentially the same as that involved in extending loans and is subject to the Company’s normal credit policies. The Company obtains collateral, if needed, based upon its assessment of the customers’ credit quality. Generally, interest rate swap agreements are offered to “pass” rated customers requesting long-term commercial loans or commercial mortgages in amounts generally of at least $1.0 million. The interest rate swap agreement with our customers is cross-collateralized by the loan collateral. The interest rate swap agreements do not have any embedded interest rate caps or floors.

For every variable interest rate swap agreement entered into with a commercial customer, the Company simultaneously enters into a fixed rate interest rate swap agreement with a correspondent bank, agreeing to pay a fixed income stream and receive a variable interest rate swap. The Company is party to master netting agreements with its correspondent banks; however, the Company does not offset assets and liabilities for financial statement presentation purposes. The master netting agreements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of cash is received or posted by the counterparty with the net liability position, in accordance with contract thresholds. As of September 30, 2016, the Company maintained a cash balance of $26.7 million with a correspondent bank to collateralize its position. The Company has an agreement with a correspondent bank to secure any outstanding receivable in excess of $10.0 million.

Credit-risk-related Contingent Features

The Company’s agreements with its derivative counterparties contain the following provisions:

· if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations;

· if the Company fails to maintain its status as a well/adequately capitalized institution, then the counterparty could terminate the derivative positions, and the Company would be required to settle its obligations under the agreements;

· if the Company fails to maintain a specified minimum leverage ratio, then the Company could be declared in default on its derivative obligations; and

· if a specified event or condition occurs that materially changes the Company’s creditworthiness in an adverse manner, it may be required to fully collateralize its obligations under the derivative instrument.

The Company is in compliance with the above provisions as of September 30, 2016.

36 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The Company has established a derivatives policy which sets forth the parameters for such transactions (including underwriting guidelines, rate setting process, maximum maturity, approval and documentation requirements), as well as identifies internal controls for the management of risks related to these hedging activities (such as approval of counterparties, limits on counterparty credit risk, maximum loan amounts, and limits to single dealer counterparties).

The interest rate swap derivatives executed with our customers and our counterparties, are marked to market and are included with prepaid expenses and other assets and accrued expenses and other liabilities on the Consolidated Statements of Financial Condition at fair value. The Company had the following outstanding interest rate swaps that were not designated for hedge accounting:

		September 30, 2016							December 31, 2015
(Dollars in thousands)	Consolidated Balance Sheet Location	# of Instruments		Notional Amount		Estimated Fair Values			# of Instruments		Notional Amount		Estimated Fair Values
Commercial loan customer interest rate swap position	Other Assets		81	$	371,691	$	23,952			60	$	257,693	$	10,564
Commercial loan customer interest rate swap position	Other Liabilities		-		-		-			6		23,411		(78	)
Counterparty interest rate swap position	Other Liabilities		81		371,691		(24,246	)		66		281,104		(10,599	)

The Company recorded the changes in the fair value of non-hedge accounting derivatives as a component of other noninterest income except for interest received and paid which is reported in interest income in the accompanying Consolidated Statements of Income as follows:

	For The Three Months Ended September 30,
	2016									2015
	Interest Income Recorded in Interest Income			MTM Gain (Loss) Recorded in Noninterest Income			Net Impact			Interest Income Recorded in Interest Income			MTM Gain (Loss) Recorded in Noninterest Income			Net Impact
(Dollars in thousands)
Commercial loan customer interest rate swap position	$	(1,468	)	$	(1,594	)	$	(3,062	)	$	(1,462	)	$	6,923		$	5,461
Counterparty interest rate swap position		1,468			1,594			3,062			1,462			(6,923	)		(5,461	)
Total	$	-		$	-		$	-		$	-		$	-		$	-

	For The Nine Months Ended September 30,
	2016									2015
	Interest Income Recorded in Interest Income			MTM Gain (Loss) Recorded in Noninterest Income			Net Impact			Interest Income Recorded in Interest Income			MTM Gain (Loss) Recorded in Noninterest Income			Net Impact
(Dollars in thousands)
Commercial loan customer interest rate swap position	$	(4,281	)	$	13,388		$	9,107		$	(3,799	)	$	6,148		$	2,349
Counterparty interest rate swap position		4,281			(13,388	)		(9,107	)		3,799			(6,148	)		(2,349	)
Total	$	-		$	-		$	-		$	-		$	-		$	-

37 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Mortgage Banking Derivatives

Certain derivative instruments, primarily forward sales of mortgage loans and mortgage-backed securities (“MBS”) are utilized by the Company in its efforts to manage risk of loss associated with its mortgage loan commitments and mortgage loans held for sale. Prior to closing and funding certain single-family residential mortgage loans, an interest-rate lock commitment is generally extended to the borrower. During the period from commitment date to closing date, the Company is subject to the risk that market rates of interest may change. If market rates rise, investors generally will pay less to purchase such loans resulting in a reduction in the gain on sale of the loans or, possibly, a loss. In an effort to mitigate such risk, forward delivery sales commitments, under which the Company agrees to deliver whole mortgage loans to various investors or issue MBS, are established. At September 30, 2016, the notional amount of outstanding rate locks totaled approximately $37.7 million. The notional amount of outstanding commitments to sell residential mortgage loans totaled approximately $38.5 million, which included mandatory forward commitments totaling approximately $31.4 million at September 30, 2016. The forward commitments establish the price to be received upon the sale of the related mortgage loan, thereby mitigating certain interest rate risk. There is, however, still certain execution risk specifically related to the Company’s ability to close and deliver to its investors the mortgage loans it has committed to sell.

12. Offsetting of Financial Assets and Liabilities

The following tables present the remaining contractual maturities of the Company’s repurchase agreement borrowings and repurchase liabilities as of September 30, 2016 and December 31, 2015, disaggregated by the class of collateral pledged.

	September 30, 2016								December 31, 2015
	Remaining Contractual Maturity of the Agreements								Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight and Continuous		Up to One Year		One Year to Three Years		Total		Overnight and Continuous		Up to One Year		One Year to Three Years		Total
Repurchase agreement borrowings
U.S. Government agency obligations	$	-	$	-	$	6,000	$	6,000	$	-	$	-	$	6,000	$	6,000
Government sponsored residential mortgage-backed securities		-		-		4,500		4,500		-		-		4,500		4,500
Total repurchase agreement borrowings		-		-		10,500		10,500		-		-		10,500		10,500
Repurchase liabilities
U.S. Government agency obligations		35,036		-		-		35,036		35,769		-		-		35,769
Total repurchase liabilities		35,036		-		-		35,036		35,769		-		-		35,769
Total	$	35,036	$	-	$	10,500	$	45,536	$	35,769	$	-	$	10,500	$	46,269

The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreements should the Company be in default (e.g., fail to make an interest payment to the counterparty). The collateral is held by a third party financial institution in the Company's trustee account. The counterparty has the right to sell or repledge the investment securities if the Company defaults. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional securities. The Company closely monitors collateral levels to ensure adequate levels are maintained, while mitigating the potential risk of over-collateralization in the event of counterparty default.

38 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables present the potential effect of rights of setoff associated with the Company’s recognized financial assets and liabilities at September 30, 2016 and December 31, 2015:

	September 30, 2016
							Gross Amounts Not Offset in the Statement of Financial Condition
	Gross Amount of Recognized Assets		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Assets Presented in the Statement of Financial Condition		Financial Instruments		Securities Collateral Received		Cash Collateral Received		Net Amount
(Dollars in thousands)
Interest rate swap derivatives	$	23,952	$	-	$	23,952	$	-	$	-	$	23,952	$	-
Total	$	23,952	$	-	$	23,952	$	-	$	-	$	23,952	$	-
	September 30, 2016
							Gross Amounts Not Offset in the Statement of Financial Condition
	Gross Amount of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Liabilities Presented in the Statement of Financial Condition		Financial Instruments		Securities Collateral Pledged		Cash Collateral Pledged		Net Amount
(Dollars in thousands)
Interest rate swap derivatives	$	24,246	$	-	$	24,246	$	-	$	-	$	24,246	$	-
Repurchase agreement borrowings		10,500		-		10,500		-		10,500		-		-
Total	$	34,746	$	-	$	34,746	$	-	$	10,500	$	24,246	$	-
	December 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Condition
	Gross Amount of Recognized Assets		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Assets Presented in the Statement of Financial Condition		Financial Instruments		Securities Collateral Received		Cash Collateral Received		Net Amount
(Dollars in thousands)
Interest rate swap derivatives	$	10,564	$	-	$	10,564	$	-	$	-	$	10,564	$	-
Total	$	10,564	$	-	$	10,564	$	-	$	-	$	10,564	$	-
	December 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Condition
	Gross Amount of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Liabilities Presented in the Statement of Financial Condition		Financial Instruments		Securities Collateral Pledged		Cash Collateral Pledged		Net Amount
(Dollars in thousands)
Interest rate swap derivatives	$	10,677	$	-	$	10,677	$	-	$	-	$	10,677	$	-
Repurchase agreement borrowings		10,500		-		10,500		-		10,500		-		-
Total	$	21,177	$	-	$	21,177	$	-	$	10,500	$	10,677	$	-

39 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

13. Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and unused lines of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated Statements of Financial Condition. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Financial instruments whose contract amounts represent credit risk are as follows:

	September 30,		December 31,
	2016		2015
(Dollars in thousands)
Approved loan commitments	$	73,531	$	46,144
Unadvanced portion of construction loans		63,581		44,457
Unused lines for home equity loans		193,845		204,983
Unused revolving lines of credit		68		365
Unused commercial letters of credit		3,970		3,558
Unused commercial lines of credit		221,373		187,819
	$	556,368	$	487,326

Financial instruments with off-balance sheet risk had a valuation allowance of $86,000 and $501,000 as of September 30, 2016 and December 31, 2015, respectively.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company upon extension of credit is based on management’s credit evaluation of the counterparty. Collateral held is primarily residential property and commercial assets.

At September 30, 2016 and December 31, 2015, the Company had no off-balance sheet special purpose entities and participated in no securitizations of assets.

14. Significant Group Concentrations of Credit Risk

The Company primarily grants commercial, residential and consumer loans to customers located within its primary market area in the state of Connecticut and western Massachusetts. The majority of the Company’s loan portfolio is comprised of commercial and residential mortgages. The Company has no negative amortization or option adjustable rate mortgage loans.

40 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

15. Fair Value Measurements

Fair value estimates are made as of a specific point in time based on the characteristics of the financial instruments and relevant market information. In accordance with FASB ASC 820-10, the fair value estimates are measured within the fair value hierarchy. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820-10 are described as follows:

· Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

· Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability;

· Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. When available, quoted market prices are used. In other cases, fair values are based on estimates using present value or other valuation techniques. These techniques involve uncertainties and are significantly affected by the assumptions used and judgments made regarding risk characteristics of various financial instruments, discount rates, and estimates of future cash flows, future expected loss experience and other factors. Changes in assumptions could significantly affect these estimates. Derived fair value estimates cannot be substantiated by comparison to independent markets and, in certain cases, could not be realized in an immediate sale of the instrument.

Fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not financial instruments. Accordingly, the aggregate fair value amounts presented do not purport to represent the underlying market value of the Company. There were no transfers between levels during the nine months ended September 30, 2016 and 2015.

41 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following is a description of the valuation methodologies used for instruments measured at fair value:

Securities Available-for-Sale: Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models. Level 1 securities are those traded on active markets for identical securities including U.S. treasury obligations, preferred equity securities and marketable equity securities. Level 2 securities include U.S. treasury obligations, U.S. government agency obligations, government-sponsored residential mortgage-backed securities, corporate debt securities, trust preferred debt securities, and mutual funds. When a market is illiquid or there is a lack of transparency around the inputs to valuation, the respective securities are classified as level 3 and reliance is placed upon internally developed models and management judgment and evaluation for valuation. The Company had no Level 3 securities at September 30, 2016 and December 31, 2015.

The Company utilizes a third party, nationally-recognized pricing service (“pricing service”); subject to review by management, to estimate fair value measurements for the majority of its investment securities portfolio. The pricing service evaluates each asset class based on relevant market information considering observable data that may include dealer quotes, reported trades, market spreads, cash flows, the U.S. Treasury yield curve, the LIBOR swap yield curve, trade execution data, market prepayment speeds, credit information and the bond’s terms and conditions, among other things. The fair value prices on all investment securities are reviewed for reasonableness by management. Also, management assessed the valuation techniques used by the pricing service based on a review of their pricing methodology to ensure proper pricing and hierarchy classifications. Management employs procedures to monitor the pricing service’s assumptions and establishes processes to challenge the pricing service’s valuations that appear unusual or unexpected.

Interest Rate Swap Derivatives: The fair values of interest rate swap agreements are calculated using a discounted cash flow approach and utilize observable inputs such as the LIBOR swap curve, effective date, maturity date, notional amount, stated interest rate and are classified within Level 2 of the valuation hierarchy. Such derivatives are basic interest rate swaps that do not have any embedded interest rate caps and floors.

Forward loan sale commitments and derivative loan commitments: Forward loan sale commitments and derivative loan commitments are based on fair values of the underlying mortgage loans and the probability of such commitments being exercised. Significant management judgment and estimation is required in determining these fair value measurements therefore are classified within Level 3 of the valuation hierarchy. The Company recognized a gain of $146,000 and $52,000 for the nine months ended September 30, 2016 and 2015, respectively, included in other noninterest income in the accompanying Consolidated Statements of Income.

42 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables detail the financial instruments carried at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:

	September 30, 2016
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
U.S. Treasury obligations	$	20,089	$	3,000	$	17,089	$	-
U.S. Government agency obligations		103,119		-		103,119		-
Government sponsored residential mortgage-backed securities		3,934		-		3,934		-
Corporate debt securities		1,024		-		1,024		-
Preferred equity securities		1,868		1,868		-		-
Marketable equity securities		167		167		-		-
Mutual funds		3,893		-		3,893		-
Securities available-for-sale		134,094		5,035		129,059		-
Interest rate swap derivative		23,952		-		23,952		-
Derivative loan commitments		510		-		-		510
Total	$	158,556	$	5,035	$	153,011	$	510
Liabilities
Interest rate swap derivative	$	24,246	$	-	$	24,246	$	-
Forward loan sales commitments		227		-		-		227
Total	$	24,473	$	-	$	24,246	$	227
	December 31, 2015
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
U.S. Treasury obligations	$	38,859	$	21,996	$	16,863	$	-
U.S. Government agency obligations		81,805		-		81,805		-
Government sponsored residential mortgage-backed securities		5,153		-		5,153		-
Corporate debt securities		1,048		-		1,048		-
Preferred equity securities		1,632		1,632		-		-
Marketable equity securities		160		160		-		-
Mutual funds		3,767		-		3,767		-
Securities available-for-sale		132,424		23,788		108,636		-
Interest rate swap derivative		10,564		-		10,564		-
Derivative loan commitments		207		-		-		207
Total	$	143,195	$	23,788	$	119,200	$	207
Liabilities
Interest rate swap derivative	$	10,677	$	-	$	10,677	$	-
Forward loan sales commitments		70		-		-		70
Total	$	10,747	$	-	$	10,677	$	70

43 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table presents additional information about assets measured at fair value for which the Company has utilized Level 3 inputs.

	Derivative and Forward Loan Sales Commitments, Net
	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2016		2015			2016		2015
(Dollars in thousands)
Balance, at beginning of period	$	177	$	140		$	137	$	14
Total realized gain (loss):    Included in earnings		106		(74	)		146		52
Balance, at the end of period	$	283	$	66		$	283	$	66

The following tables present the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015:

September 30, 2016
				Significant
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Input
Derivative and forward loan sales  commitments, net	$	283	Adjusted quoted prices in active markets	Embedded servicing value		1.01	%
December 31, 2015
				Significant
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Input
Derivative and forward loan sales  commitments, net	$	137	Adjusted quoted prices in active markets	Embedded servicing value		1.28	%

The embedded servicing value represents the value assigned for mortgage servicing rights and based on management’s judgment. When the embedded servicing value increases or decreases there is a direct correlation with fair value.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a non-recurring basis in accordance with generally accepted accounting principles. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period as well as assets that are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

The following table details the financial instruments carried at fair value on a nonrecurring basis at September 30, 2016 and December 31, 2015 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:

	September 30, 2016						December 31, 2015
	Quoted Prices in		Significant		Significant		Quoted Prices in		Significant		Significant
	Active Markets for		Observable		Unobservable		Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
(Dollars in thousands)
Impaired loans	$	-	$	-	$	1,990	$	-	$	-	$	4,225
Mortgage servicing rights		-		-		4,401		-		-		-
Other real estate owned		-		-		-		-		-		279

44 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following is a description of the valuation methodologies used for instruments measured on a non-recurring basis:

Mortgage Servicing Rights: A mortgage servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans are expected to more than adequately compensate the Company for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Mortgage servicing rights impairment totaling $283,000 and $-0- for the nine months ended September 30, 2016 and 2015, respectively, is included as a component of other noninterest income in the accompanying Consolidated Statements of Income. As such, measurement at fair value is on a nonrecurring basis. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

Loans Held for Sale: Loans held for sale are accounted for at the lower of cost or market and are considered to be recognized at fair value when recorded at below cost. The fair value of loans held for sale is based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted as required for changes in loan characteristics.

Impaired Loans: Impaired loans for which repayment of the loan is expected to be provided solely by the value of the underlying collateral are considered collateral dependent and are valued based on the estimated fair value of such collateral using Level 3 inputs based on customized discounting criteria. As appraisals on impaired loans are not necessarily completed on the period end dates presented in the table above, the fair value information presented may not reflect the actual fair value as of September 30, 2016 and December 31, 2015.

Other Real Estate Owned: The Company classifies property acquired through foreclosure or acceptance of deed-in-lieu of foreclosure as other real estate owned in its financial statements. Upon foreclosure, the property securing the loan is written down to fair value less selling costs. The write down is based upon the difference between the appraised value and the book value. Appraisals are based on observable market data such as comparable sales within the real estate market, however assumptions made in determining comparability are unobservable and therefore these assets are classified as Level 3 within the valuation hierarchy. As appraisals on foreclosed real estate are not necessarily completed on the period end dates presented in the table above, the fair value information presented may not reflect the actual fair value as of December 31, 2015.

45 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables present the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at September 30, 2016 and December 31, 2015:

September 30, 2016
				Significant		Weighted
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs	Average Inputs
Impaired loans	$	1,990	Appraisals	Discount for dated appraisal	5% - 20%		12.50	%
				Discount for costs to sell	8% - 15%		11.50	%
Mortgage servicing rights	$	4,401	Discounted Cash Flows	Prepayment speeds	7.46% - 20.72%		14.04	%
				Discount rate	n/a		9.00	%
December 31, 2015
				Significant		Weighted
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs	Average Inputs
Impaired loans	$	4,225	Appraisals	Discount for dated appraisal	5% - 20%		12.50	%
				Discount for costs to sell	8% - 15%		11.50	%
Other real estate owned	$	279	Appraisals	Discount for costs to sell	8% - 15%		11.50	%
				Discount for condition	10% - 30%		20.00	%

Disclosures about Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:

Cash and cash equivalents: The carrying amounts reported in the statement of condition for cash and cash equivalents approximate those assets’ fair values.

Investment in Federal Home Loan Bank of Boston (“FHLBB”) stock: FHLBB stock does not have a readily determinable fair value and is assumed to have a fair value equal to its carrying value. Ownership of FHLBB stock is restricted to the FHLBB, and can only be purchased and redeemed at par value.

Alternative Investments: The Company accounts for its percentage ownership of alternative investment funds at cost, subject to impairment testing. These are non-public investments which include limited partnerships, an equity fund and membership stocks. These alternative investments totaled $2.3 million at September 30, 2016 and December 31, 2015. The Company recognized a $219,000 and $144,000 other-than-temporary impairment charge on its limited partnerships for the nine months ended September 30, 2016 and 2015, respectively, included in other noninterest income in the accompanying Consolidated Statements of Income. The Company recognized profit distributions in its limited partnerships of $179,000 and $26,000 for the nine months ended September 30, 2016 and 2015, respectively. The Company has $619,000 in unfunded commitments remaining for its alternative investments as of September 30, 2016.

Loans: In general, discount rates used to calculate values for loan products were based on the Company’s pricing at the respective period end and included appropriate adjustments for expected credit losses. A higher discount rate was assumed with respect to estimated cash flows associated with nonaccrual loans. Projected loan cash flows were adjusted for estimated credit losses. However, such estimates made by the Company may not be indicative of assumptions and adjustments that a purchaser of the Company’s loans would seek.

Deposits: The fair values disclosed for demand deposits and savings accounts (e.g., interest and noninterest checking and passbook savings) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts for variable-rate, fixed-term certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregate expected monthly maturities of time deposits.

46 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Borrowed funds: The fair values for borrowed funds, including FHLBB advances and repurchase borrowings, are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rate for similar types of agreements.

Repurchase liabilities: Repurchase liabilities represent a short-term customer sweep account product. Because of the short-term nature of these liabilities, the carrying amount approximates its fair value.

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2016 and December 31, 2015. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. 

		September 30, 2016				December 31, 2015
				Estimated				Estimated
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy Level	Amount		Value		Amount		Value
(Dollars in thousands)
Financial assets
Securities held-to-maturity	Level 2	$	7,338	$	7,619	$	32,246	$	32,357
Securities available-for-sale	See previous table		134,094		134,094		132,424		132,424
Loans	Level 3		2,476,364		2,469,126		2,361,796		2,336,293
Loans held-for-sale	Level 2		5,462		5,574		9,637		9,686
Mortgage servicing rights	Level 3		4,401		4,401		4,406		5,029
Federal Home Loan Bank of Boston stock	Level 2		15,139		15,139		21,729		21,729
Alternative investments	Level 3		2,327		2,335		2,508		2,409
Interest rate swap derivatives	Level 2		23,952		23,952		10,564		10,564
Derivative loan commitments	Level 3		510		510		207		207
Financial liabilities
Deposits other than time deposits	Level 1		1,770,704		1,770,704		1,550,568		1,550,568
Time deposits	Level 2		477,169		481,334		440,790		444,803
Federal Home Loan Bank of Boston advances	Level 2		220,600		222,666		377,600		376,626
Repurchase agreement borrowings	Level 2		10,500		10,651		10,500		10,539
Repurchase liabilities	Level 2		35,036		35,031		35,769		35,765
Interest rate swap derivatives	Level 2		24,246		24,246		10,677		10,677
Forward loan sales commitments	Level 3		227		227		70		70

16. Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on their financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classifications are also subject to quantitative judgments by the regulators about components, risk weightings and other factors.

47 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

In July 2013, the Federal Reserve published final rules for the adoption of the Basel III regulatory capital framework (the "Basel III Capital Rules"). The Basel III Capital Rules, among other things, (i) introduced a new capital measure called "Common Equity Tier 1", (ii) specify that Tier 1 capital consists of Common Equity Tier 1 and "Additional Tier 1 Capital" instruments meeting specified requirements, (iii) define Common Equity Tier 1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to Common Equity Tier 1 and not to the other components of capital and (iv) expand the scope of the deductions/adjustments as compared to existing regulations and a higher minimum Tier I capital requirement. Additionally, institutions must maintain a capital conservation buffer of common equity Tier 1 capital in an amount greater than 2.5% of total risk-weighted assets to avoid being subject to limitations on capital distributions and discretionary bonus payments to executive officers. The Basel III Capital Rules became effective for the Company beginning on January 1, 2015 with certain transition provisions fully phased in through January 1, 2019.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier I capital and common equity Tier I capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations) and of Tier I capital (as defined in the regulations) to average assets (as defined in the regulations).

Management believes, as of September 30, 2016 and December 31, 2015 that the Company and the Bank meet all capital adequacy requirements to which they are subject. The Federal Deposit Insurance Corporation categorizes the Company and the Bank as well capitalized under the regulatory framework for prompt corrective action as of September 30, 2016. To be categorized as well capitalized, the Company and the Bank must maintain minimum total risk-based, Tier I risk-based, common equity Tier I capital and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the institution’s category.

The following table provides information on the capital amounts and ratios for the Company and the Bank:

						Minimum Required for Capital Adequacy					To Be Well Capitalized Under Prompt Corrective
	Actual					Purposes					Action
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Farmington Bank:
At September 30, 2016
Total Capital (to Risk Weighted Assets)	$	249,304		11.07	%	$	180,118		8.00	%	$	225,148		10.00	%
Tier I Capital (to Risk Weighted Assets)		227,955		10.12			135,088		6.00			180,118		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		227,955		10.12			101,316		4.50			146,346		6.50
Tier I Leverage Capital (to Average Assets)		227,955		8.19			111,397		4.00			139,247		5.00
At December 31, 2015
Total Capital (to Risk Weighted Assets)	$	236,486		11.16	%	$	169,524		8.00	%	$	211,905		10.00	%
Tier I Capital (to Risk Weighted Assets)		215,787		10.18			127,183		6.00			169,577		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		215,787		10.18			95,387		4.50			137,781		6.50
Tier I Leverage Capital (to Average Assets)		215,787		8.03			107,490		4.00			134,363		5.00
First Connecticut Bancorp, Inc.:
At September 30, 2016
Total Capital (to Risk Weighted Assets)	$	283,164		12.57	%	$	180,196		8.00	%	$	225,245		10.00	%
Tier I Capital (to Risk Weighted Assets)		261,815		11.62			135,147		6.00			180,195		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		261,815		11.62			101,360		4.50			146,409		6.50
Tier I Leverage Capital (to Average Assets)		261,815		9.40			111,438		4.00			139,297		5.00
At December 31, 2015
Total Capital (to Risk Weighted Assets)	$	273,255		12.88	%	$	169,724		8.00	%	$	212,155		10.00	%
Tier I Capital (to Risk Weighted Assets)		252,556		11.91			127,232		6.00			169,643		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		252,556		11.91			95,424		4.50			137,835		6.50
Tier I Leverage Capital (to Average Assets)		252,556		9.39			107,585		4.00			134,481		5.00

48 

First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

17. Other Comprehensive Income

The following tables present the changes in accumulated other comprehensive loss, net of tax by component:

	For the Three Months Ended September 30, 2016
	Investment Securities Available-for-Sale			Employee Benefit Plans			Accumulated Other Comprehensive (Loss) Income
(Dollars in thousands)
Balance at June 30, 2016	$	247		$	(6,702	)	$	(6,455	)
Other comprehensive income during the period		5			-			5
Amount reclassified from accumulated other comprehensive income, net of tax		-			106			106
Net change		5			106			111
Balance at September 30, 2016	$	252		$	(6,596	)	$	(6,344	)
	For the Three Months Ended September 30, 2015
	Investment Securities Available-for-Sale			Employee Benefit Plans			Accumulated Other Comprehensive (Loss) Income
(Dollars in thousands)
Balance at June 30, 2015	$	105		$	(7,433	)	$	(7,328	)
Other comprehensive income during the period		67			-			67
Amount reclassified from accumulated other comprehensive income, net of tax		-			110			110
Net change		67			110			177
Balance at September 30, 2015	$	172		$	(7,323	)	$	(7,151	)
	For the Nine Months Ended September 30, 2016
	Investment Securities Available-for-Sale			Employee Benefit Plans			Accumulated Other Comprehensive (Loss) Income
(Dollars in thousands)
Balance at December 31, 2015	$	(249	)	$	(6,913	)	$	(7,162	)
Other comprehensive income during the period		501			-			501
Amount reclassified from accumulated other comprehensive income, net of tax		-			317			317
Net change		501			317			818
Balance at September 30, 2016	$	252		$	(6,596	)	$	(6,344	)
	For the Nine Months Ended September 30, 2015
	Investment Securities Available-for-Sale			Employee Benefit Plans			Accumulated Other Comprehensive (Loss) Income
(Dollars in thousands)
Balance at December 31, 2014	$	1,046		$	(7,557	)	$	(6,511	)
Other comprehensive loss during the period Amount reclassified from accumulated		(1,861	)		-			(1,861	)
other comprehensive income, net of tax		987			234			1,221
Net change		(874	)		234			(640	)
Balance at September 30, 2015	$	172		$	(7,323	)	$	(7,151	)

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First Connecticut Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables present a reconciliation of the changes in components of other comprehensive income (loss) for the three and nine months ended September 30, 2016 and 2015, including the amount of income tax expense allocated to each component of other comprehensive income (loss):

	For the Three Months Ended September 30, 2016
	Pre Tax Amount			Tax Benefit (Expense)			After Tax Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	8		$	(3	)	$	5
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		8			(3	)		5
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		164			(58	)		106
Total other comprehensive income	$	172		$	(61	)	$	111
	For the Three Months Ended September 30, 2015
	Pre Tax Amount			Tax Benefit (Expense)			After Tax Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	103		$	(36	)	$	67
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		103			(36	)		67
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		170			(60	)		110
Total other comprehensive income	$	273		$	(96	)	$	177
	For the Nine Months Ended September 30, 2016
	Pre Tax Amount			Tax Benefit (Expense)			After Tax Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	776		$	(275	)	$	501
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		776			(275	)		501
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		491			(174	)		317
Total other comprehensive income	$	1,267		$	(449	)	$	818
	For the Nine Months Ended September 30, 2015
	Pre Tax Amount			Tax Benefit (Expense)			After Tax Amount
(Dollars in thousands)
Unrealized losses on available-for-sale securities	$	(2,872	)	$	1,011		$	(1,861	)
Less: net security gains reclassified into other noninterest income		1,523			(536	)		987
Net change in fair value of securities available-for-sale		(1,349	)		475			(874	)
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		361			(127	)		234
Total other comprehensive loss	$	(988	)	$	348		$	(640	)

(1) Amounts are included in salaries and employee benefits in the unaudited Consolidated Statements of Income.

18. Legal Actions

The Company and its subsidiary are involved in various legal proceedings which have arisen in the normal course of business. The Company believes the resolution of these legal actions is not expected to have a material adverse effect on the Company’s consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Form 10-Q contains “forward-looking statements.” You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. These forward-looking statements include, but are not limited to:

· statements of our goals, intentions and expectations;

· statements regarding our business plans, prospects, growth and operating strategies;

· statements regarding the asset quality of our loan and investment portfolios; and

· estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

· Local, regional and national business or economic conditions may differ from those expected.

· The effects of and changes in trade, monetary and fiscal policies and laws, including the U.S. Federal Reserve Board’s interest rate policies, may adversely affect our business.

· The ability to increase market share and control expenses may be more difficult than anticipated.

· Changes in laws and regulatory requirements (including those concerning taxes, banking, securities and insurance) may adversely affect us or our business.

· Changes in accounting policies and practices, as may be adopted by regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board, may affect expected financial reporting.

· Future changes in interest rates may reduce our profits which could have a negative impact on the value of our stock.

· We are subject to lending risk and could incur losses in our loan portfolio despite our underwriting practices. Changes in real estate values could also increase our lending risk.

· Changes in demand for loan products, financial products and deposit flow could impact our financial performance.

· Strong competition within our market area may limit our growth and profitability.

· If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

· Our stock value may be negatively affected by federal regulations and articles of incorporation provisions restricting takeovers.

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· Implementation of stock benefit plans will increase our costs, which will reduce our income.

· The Dodd-Frank Act has resulted in dramatic regulatory changes that affects the industry in general, and may impact our competitive position in ways that cannot be predicted at this time.

· The increased cost of maintaining or the Company’s ability to maintain adequate liquidity and capital, based on the requirements adopted by the Basel Committee on Banking Supervision and U.S. regulators.

· Changes to the amount and timing of proposed common stock repurchases.

· Computer systems on which we depend could fail or experience a security breach, implementation of new technologies may not be successful; and our ability to anticipate and respond to technological changes can affect our ability to meet customer needs.

· We may not manage the risks involved in the foregoing as well as anticipated.

Any forward-looking statements made by or on behalf of us in this Form 10-Q speak only as of the date of this Form 10-Q. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. The reader should, however, consider any further disclosures of a forward-looking nature we may make in future filings. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

General

First Connecticut Bancorp, Inc. is a Maryland-chartered stock holding company that wholly owns Farmington Bank. Farmington Bank is a full-service, community bank with 24 branch locations throughout central Connecticut and western Massachusetts, offering commercial and residential lending as well as wealth management services. Established in 1851, Farmington Bank is a diversified consumer and commercial bank with an ongoing commitment to contribute to the betterment of the communities in our region.

Our business strategy is to operate as a well-capitalized and profitable community bank for businesses, individuals and local governments, with an ongoing commitment to provide quality customer service.

· Maintaining a strong capital position in excess of the well-capitalized standards set by our banking regulators to support our current operations and future growth. The FDIC’s requirement for a “well-capitalized” bank is a total risk-based capital ratio of 10.0% or greater. As of September 30, 2016 our total risk-based capital ratio was 12.57%.

· Increasing our focus on commercial lending and continuing to expand commercial banking operations. We will continue to focus on commercial lending and the origination of commercial loans using prudent lending standards. We plan to continue to grow our commercial lending portfolio, while enhancing our complementary business products and services.

· Continuing to focus on residential and consumer lending in conjunction with our secondary market residential lending program. We offer traditional residential and consumer lending products and plan to continue to build a strong residential and consumer lending program that supports our secondary market residential lending program. Under our expanding secondary market residential lending program, we may sell a portion of our fixed rate residential originations while retaining the loan servicing function and mitigating our interest rate risk.

· Maintaining asset quality and prudent lending standards. We will continue to originate all loans utilizing prudent lending standards in an effort to maintain strong asset quality. While our delinquencies and charge-offs have decreased, we continue to diligently manage our collection function to minimize loan losses and non-performing assets. We will continue to employ sound risk management practices as we continue to expand our lending portfolio.

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· Expanding our existing products and services and developing new products and services to meet the changing needs of consumers and businesses in our market area. We will continue to evaluate our consumer and business customers’ needs to ensure that we continue to offer relevant, up-to-date products and services.

· Continue expansion through de novo branching. We recently expanded into western Massachusetts opening two de novo branches in the fourth quarter of 2015 and opened a de novo branch in Vernon, Connecticut during the second quarter of 2016. We plan to open a branch in Manchester, Connecticut in 2017 and continue to evaluate future growth through de novo branching.

· Continuing to control non-interest expenses. As part of our strategic plan, we have implemented several programs designed to control costs. We monitor our expense ratios and plan to reduce our efficiency ratio by controlling expenses and increasing net interest income and noninterest income. We plan to continue to evaluate and improve the effectiveness of our business processes and our efficiency, utilizing information technology when possible.

· Taking advantage of acquisition opportunities that are consistent with our strategic growth plans. We intend to continue to evaluate opportunities to acquire other financial institutions and financial service related businesses in our current market area or contiguous market areas that will enable us to enhance our existing products and services and develop new products and services. We have no specific plans, agreements or understandings with respect to any expansion or acquisition opportunities.

Critical Accounting Policies

The accounting policies followed by us conform with the accounting principles generally accepted in the United States of America. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. We believe that our most critical accounting policies, which involve the most complex subjective decisions or assessments, relate to allowance for loan losses, other-than-temporary impairment of investment securities, income taxes and pension and other post-retirement benefits. The following is a description of our critical accounting policies and an explanation of the methods and assumptions underlying their application.

Allowance for Loan Losses: The allowance for loan losses is maintained at a level believed adequate by management to absorb potential losses inherent in the loan portfolio as of the statement of condition date. The allowance for loan losses consists of a formula allowance following FASB ASC 450 — “Contingencies” and FASB ASC 310 — “Receivables”. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a quarterly basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, allocated and unallocated components, as further described below. All reserves are available to cover any losses regardless of how they are allocated.

General component:

The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the following loan segments: residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort. Construction loans include classes for commercial investment real estate construction, commercial owner occupied construction, residential development, residential subdivision construction and residential owner occupied construction loans. Management uses a rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies and nonaccrual loans; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no material changes in the Company’s policies or methodology pertaining to the general component of the allowance for loan losses during the nine months ended September 30, 2016.

53 

The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows:

Residential real estate – Residential real estate loans are generally originated in amounts up to 95.0% of the lesser of the appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio in excess of 80.0%. The Company does not grant subprime loans. All loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. All residential mortgage loans are underwritten pursuant to secondary market underwriting guidelines which include minimum FICO standards. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Commercial real estate – Loans in this segment are primarily originated to finance income-producing properties throughout the northeastern states. The underlying cash flows generated by the properties may be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, may have an effect on the credit quality in this segment. Management generally obtains rent rolls and other financial information, as appropriate on an annual basis and continually monitors the cash flows of these loans.

Construction loans – Loans in this segment include commercial construction loans, real estate subdivision development loans to developers, licensed contractors and builders for the construction and development of commercial real estate projects and residential properties. Construction lending contains a unique risk characteristic as loans are originated under market and economic conditions that may change between the time of origination and the completion and subsequent purchaser financing of the property. In addition, construction subdivision loans and commercial and residential construction loans to contractors and developers entail additional risks as compared to single-family residential mortgage lending to owner-occupants. These loans typically involve large loan balances concentrated in single borrowers or groups of related borrowers. Real estate subdivision development loans to developers, licensed contractors and builders are generally speculative real estate development loans for which payment is derived from sale of the property. Credit risk may be affected by cost overruns, time to sell at an adequate price, and market conditions. Construction financing is generally considered to involve a higher degree of credit risk than longer-term financing on improved, owner-occupied real estate. Residential construction credit quality may be impacted by the overall health of the economy, including unemployment rates and housing prices.

Commercial – Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Home equity line of credit – Loans in this segment include home equity loans and lines of credit underwritten with a loan-to-value ratio generally limited to no more than 80%, including any first mortgage. Our home equity lines of credit have ten-year terms and adjustable rates of interest which are indexed to the prime rate. The overall health of the economy, including unemployment rates and housing prices, may have an effect on the credit quality in this segment.

Installment, Collateral, Demand, Revolving Credit and Resort – Loans in these segments include loans principally to customers residing in our primary market area with acceptable credit ratings. Our installment and collateral consumer loans generally consist of loans on new and used automobiles, loans collateralized by deposit accounts and unsecured personal loans. The overall health of the economy, including unemployment rates and housing prices, may have an effect on the credit quality in this segment. Excluding collateral loans which are fully collateralized by a deposit account, repayment for loans in these segments is dependent on the credit quality of the individual borrower. The resort portfolio consists of a direct receivable loan outside the Northeast which is amortizing to its contractual obligations. The Company has exited the resort financing market with a residual portfolio remaining.

54 

Allocated component:

The allocated component relates to loans that are classified as impaired. Impairment is measured on a loan by loan basis for commercial real estate, construction, commercial and resort loans by the present value of expected cash flows discounted at the effective interest rate; the fair value of the collateral, if applicable; or the observable market price for the loan. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan is lower than the carrying value of that loan. The Company does not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement or they are nonaccrual loans with outstanding balances greater than $100,000.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Management updates the analysis quarterly. The assumptions used in appraisals are reviewed for appropriateness. Updated appraisals or valuations are obtained as needed or adjusted to reflect the estimated decline in the fair value based upon current market conditions for comparable properties.

The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring ("TDR"). All TDRs are classified as impaired.

Unallocated component:

An unallocated component is maintained, when needed, to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. The Company’s Loan Policy allows management to utilize a high and low range of 0.0% to 5.0% of our total allowance for loan losses when establishing an unallocated allowance, when considered necessary. The unallocated allowance is used to provide for an unidentified loss that may exist in emerging problem loans that cannot be fully quantified or may be affected by conditions not fully understood as of the balance sheet date. There was no unallocated allowance at September 30, 2016 and December 31, 2015.

Other-than-Temporary Impairment of Securities: In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“FASB ASC”) 320 — Debt and Equity Securities, a decline in market value of a debt security below amortized cost that is deemed other-than-temporary is charged to earnings for the credit related other-than-temporary impairment (“OTTI”) resulting in the establishment of a new cost basis for the security, while the non-credit related OTTI is recognized in other comprehensive income if there is no intent or requirement to sell the security. Management reviews the securities portfolio on a quarterly basis for the presence of OTTI. An assessment is made as to whether the decline in value results from company-specific events, industry developments, general economic conditions, credit losses on debt or other reasons. After the reasons for the decline are identified, further judgments are required as to whether those conditions are likely to reverse and, if so, whether that reversal is likely to result in a recovery of the fair value of the investment in the near term. If it is judged not to be near-term, a charge is taken which results in a new cost basis. Credit related OTTI for debt securities is recognized in earnings while non-credit related OTTI is recognized in other comprehensive income if there is no intent to sell or will not be required to sell the security. If an equity security is deemed other-than-temporarily impaired, the full impairment is considered to be credit-related and a charge to earnings would be recorded. Management believes the policy for evaluating securities for other-than-temporary impairment is critical because it involves significant judgments by management and could have a material impact on our net income.

55 

Gains and losses on sales of securities are recognized at the time of sale on a specific identification basis. Marketable equity and debt securities are classified as either trading, available-for-sale, or held-to-maturity (applies only to debt securities). Management determines the appropriate classifications of securities at the time of purchase. At September 30, 2016 and December 31, 2015, we had no debt or equity securities classified as trading. Held-to-maturity securities are debt securities for which we have the ability and intent to hold until maturity. All other securities not included in held-to-maturity are classified as available-for-sale. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Available-for-sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported in accumulated other comprehensive income, a separate component of equity, until realized.

Premiums and discounts on debt securities are amortized or accreted into interest income over the term of the securities using the level yield method.

Income Taxes: Deferred income taxes are provided for differences arising in the timing of income and expenses for financial reporting and for income tax purposes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides a deferred tax asset valuation allowance for the estimated future tax effects attributable to temporary differences and carryforwards when realization is determined not to be more likely than not.

FASB ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Pursuant to FASB ASC 740-10, the Company examines its financial statements, its income tax provision and its federal and state income tax returns and analyzes its tax positions, including permanent and temporary differences, as well as the major components of income and expense to determine whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties arising from income tax settlements as part of its provision for income taxes.

As part of the Plan of Conversion and Reorganization completed on June 29, 2011, the Company contributed shares of Company common stock to the Farmington Bank Community Foundation, Inc. This contribution resulted in a charitable contribution deduction for federal income tax purposes. Use of that charitable contribution deduction is limited under Federal tax law to 10% of federal taxable income without regard to charitable contributions, net operating losses, and dividend received deductions. Annually, a corporation is permitted to carry over to the five succeeding tax years, contributions that exceeded the 10% limitation, but also subject to the maximum annual limitation. As a result, approximately $2.9 million of charitable contribution carryforward remains at September 30, 2016 resulting in a deferred tax asset of approximately $1.0 million. The Company believes it is more likely than not that this carryforward will not be fully utilized before expiration in 2016. Therefore, a valuation allowance has been recorded against this deferred tax asset. Some of this charitable contribution carryforward would likely expire unutilized if the Company does not generate sufficient taxable income over this year. The Company monitors the need for a valuation allowance on a quarterly basis.

In December 1999, we created and have since maintained a “passive investment company” (“PIC”), as permitted by Connecticut law. At September 30, 2016 there were no material uncertain tax positions related to federal and state income tax matters. We are currently open to audit under the statute of limitations by the Internal Revenue Service and state taxing authorities for the years ended December 31, 2013 through 2015. If the state taxing authority were to determine that the PIC was not in compliance with statutory requirements, a material amount of taxes could be due.

As of September 30, 2016, management believes it is more likely than not that the deferred tax assets other than the contribution carryforward will be realized through future reversals of existing taxable temporary differences and future taxable income. At September 30, 2016, our net deferred tax asset was $15.1 million with a $771,000 valuation allowance.

Pension and Other Postretirement Benefits: The Company’s non-contributory defined-benefit pension plan and certain defined benefit postretirement plans were frozen as of February 28, 2013 and no additional benefits will accrue.

56 

The Company has a non-contributory defined benefit pension plan that provides benefits for substantially all employees hired before January 1, 2007 who meet certain requirements as to age and length of service. The benefits are based on years of service and average compensation, as defined in the Plan Document. The Company’s funding practice is to meet the minimum funding standards established by the Employee Retirement Income Security Act of 1974.

In addition to providing pension benefits, we provide certain health care and life insurance benefits for retired employees. Participants or eligible employees hired before January 1, 1993 become eligible for the benefits if they retire after reaching age 62 with fifteen or more years of service. A fixed percent of annual costs are paid depending on length of service at retirement. The Company accrues for the estimated costs of these other post-retirement benefits through charges to expense during the years that employees render service. The Company makes contributions to cover the current benefits paid under this plan. The Company believes the policy for determining pension and other post-retirement benefit expenses is critical because judgments are required with respect to the appropriate discount rate, rate of return on assets and other items. The Company reviews and updates the assumptions annually. If the Company’s estimate of pension and post-retirement expense is too low it may experience higher expenses in the future, reducing its net income. If the Company’s estimate is too high, it may experience lower expenses in the future, increasing its net income.

57 

Comparison of Financial Condition at September 30, 2016 and December 31, 2015

Our total assets increased $123.4 million to $2.8 billion at September 30, 2016 compared to December 31, 2015 primarily due to a $113.5 million increase in loans.

Our investment portfolio totaled $141.4 million or 5.0% of total assets and $164.7 million or 6.1% of total assets at September 30, 2016 and December 31, 2015, respectively. Available-for-sale investment securities totaled $134.1 million at September 30, 2016 compared to $132.4 million at December 31, 2015. Securities held-to-maturity decreased $24.9 million to $7.3 million at September 30, 2016 from $32.2 million at December 31, 2015 primarily due to $24.0 million being called during the nine months ended September 30, 2016. The Company purchases short term U.S. Treasury and agency securities in order to meet municipal and repurchase agreement pledge requirements and to minimize interest rate risk during the sustained low interest rate environment.

Loans increased $113.5 million to $2.5 billion as of September 30, 2016 primarily driven by a $103.0 million increase in the commercial loan portfolio. The allowance for loan losses was $21.3 million and $20.2 million at September 30, 2016 and December 31, 2015. At September 30, 2016, the allowance for loan losses represented 0.86% of total loans and 119.26% of non-performing loans, compared to 0.86% of total loans and 135.44% of non-performing loans as of December 31, 2015.

Prepaid expenses and other assets increased $13.2 million to $33.6 million at September 30, 2016 compared to $20.4 million at December 31, 2015 primarily due to a $13.4 million increase in the fair value of our interest rate swaps.

Total liabilities increased $113.5 million to $2.6 billion at September 30, 2016 compared to $2.5 billion at December 31, 2015. Deposits increased $256.5 million or 13% to $2.2 billion at September 30, 2016 which includes increases in interest-bearing deposits of $238.2 million primarily due to a seasonality increase of $91.3 million in municipal deposits and deposits related to our two de novo branch expansion into western Massachusetts during the fourth quarter of 2015 and our de novo branch in Vernon, Connecticut which opened during the second quarter of 2016. There were brokered deposits totaling $43.2 million and $44.3 million at September 30, 2016 and December 31, 2015, respectively. Federal Home Loan Bank of Boston advances decreased $157.0 million to $220.6 million at September 30, 2016 from $377.6 million at December 31, 2015 as we used the increase in the deposits to pay down the advances.

Stockholders’ equity increased $9.9 million to $255.6 million compared to December 31, 2015 primarily due to $11.0 million in net income. The Company paid cash dividends totaling $3.5 million or $0.22 per share during the nine months ended September 30, 2016. During the nine months ended September 30, 2016, the Company repurchased 156,800 shares of common stock at an average price per share of $16.12 at a total cost of $2.5 million. Repurchased shares are held as treasury stock and will be available for general corporate purposes.

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Net Interest Income Analysis: Average Balance Sheets, Interest and Yields/Costs

The following tables present the average balance sheets, average yields and costs and certain other information for the periods indicated therein on a fully tax-equivalent basis. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero percent yield. Loans held for sale average balance are included in loans average balance. The yields set forth below include the effect of net deferred costs and premiums that are amortized to interest income or expense.

	For The Three Months Ended September 30,
	2016								2015
	Average Balance		Interest and Dividends(1)			Yield/ Cost			Average Balance		Interest and Dividends(1)			Yield/ Cost
(Dollars in thousands)
Interest-earning assets:
Loans	$	2,430,114	$	21,650			3.54	%	$	2,359,293	$	20,937			3.52	%
Securities		165,738		481			1.15	%		191,530		465			0.96	%
Federal Home Loan Bank of Boston stock		18,206		161			3.52	%		22,883		166			2.88	%
Federal funds and other earning assets		36,439		46			0.50	%		11,089		8			0.29	%
Total interest-earning assets		2,650,497		22,338			3.35	%		2,584,795		21,576			3.31	%
Noninterest-earning assets		135,828								122,438
Total assets	$	2,786,325							$	2,707,233
Interest-bearing liabilities:
NOW accounts	$	506,509	$	385			0.30	%	$	486,798	$	357			0.29	%
Money market		525,301		1,085			0.82	%		437,000		867			0.79	%
Savings accounts		221,981		60			0.11	%		210,978		58			0.11	%
Certificates of deposit		481,901		1,445			1.19	%		430,152		1,130			1.04	%
Total interest-bearing deposits		1,735,692		2,975			0.68	%		1,564,928		2,412			0.61	%
Federal Home Loan Bank of Boston advances		250,459		955			1.52	%		411,236		890			0.86	%
Repurchase agreement borrowings		10,500		98			3.71	%		10,500		96			3.63	%
Repurchase liabilities		51,297		22			0.17	%		57,644		24			0.17	%
Total interest-bearing liabilities		2,047,948		4,050			0.79	%		2,044,308		3,422			0.66	%
Noninterest-bearing deposits		417,917								368,200
Other noninterest-bearing liabilities		64,201								51,089
Total liabilities		2,530,066								2,463,597
Stockholders' equity		256,259								243,636
Total liabilities and stockholders' equity	$	2,786,325							$	2,707,233
Tax-equivalent net interest income			$	18,288							$	18,154
Less: tax-equivalent adjustment				(533	)							(482	)
Net interest income			$	17,755							$	17,672
Net interest rate spread(2)							2.56	%							2.65	%
Net interest-earning assets(3)	$	602,549							$	540,487
Net interest margin(4)							2.74	%							2.79	%
Average interest-earning assets to average interest-bearing liabilities				129.42	%							126.44	%

(1) On a fully-tax equivalent basis.

(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin represents tax-equivalent net interest income divided by average total interest-earning assets.

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Rate Volume Analysis

The following table sets forth the effects of changing rates and volumes on tax-equivalent net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the volume and rate columns. For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.

	Three Months Ended September 30,
	2016 vs. 2015
	Increase (decrease) due to
(Dollars in thousands)	Volume			Rate			Total
Interest-earning assets:
Loans	$	583		$	130		$	713
Investment securities		(68	)		84			16
Federal Home Loan Bank of Boston stock		(38	)		33			(5	)
Federal funds and other earning assets		29			9			38
Total interest-earning assets		506			256			762
Interest-bearing liabilities:
NOW accounts		14			14			28
Money market		179			39			218
Savings accounts		3			(1	)		2
Certificates of deposit		143			172			315
Total interest-bearing deposits		339			224			563
Federal Home Loan Bank of Boston advances		(439	)		504			65
Repurchase agreement borrowing		-			2			2
Repurchase liabilities		(3	)		1			(2	)
Total interest-bearing liabilities		(103	)		731			628
Increase in net interest income	$	609		$	(475	)	$	134

Summary of Operating Results for the Three Months Ended September 30, 2016 and 2015

The following discussion provides a summary and comparison of our operating results for the three months ended September 30, 2016 and 2015:

	For the Three Months Ended September 30,
	2016		2015		$ Change			% Change
(Dollars in thousands)
Net interest income	$	17,755	$	17,672	$	83			0.5	%
Provision for loan losses		698		386		312			80.8
Noninterest income		3,685		3,241		444			13.7
Noninterest expense		15,484		14,718		766			5.2
Income before taxes		5,258		5,809		(551	)		(9.5	)
Income tax expense		1,485		1,594		(109	)		(6.8	)
Net income	$	3,773	$	4,215	$	(442	)		(10.5	)%

For the three months ended September 30, 2016, net income decreased $442,000 compared to the three months ended September 30, 2015. The decrease in net income was driven by a $312,000 increase in the provision for loan losses and a $766,000 increase in noninterest expense offset by a $444,000 increase in noninterest income.

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Comparison of Operating Results for the three months ended September 30, 2016 and 2015

Our results of operations depend primarily on net interest income, which is the difference between the interest income on earning assets, such as loans and investments, and the interest expense incurred on interest-bearing liabilities, such as deposits and borrowings. We also generate noninterest income; including service charges on deposit accounts, gain on sale of securities, income from mortgage banking activities, bank-owned life insurance income, brokerage fees, insurance commissions and other miscellaneous fees. Our noninterest expense primarily consists of salary and employee benefits, occupancy expense, furniture and equipment expenses, FDIC assessments, marketing and other general and administrative expenses. Our results of operations are also affected by our provision for loan losses.

Net Interest Income: Net interest income is determined by the interest rate spread (i.e., the difference between the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities) and the relative amounts of interest-earning assets and interest-bearing liabilities. Net interest income before the provision for loan losses was $17.8 million and $17.7 million for the three months ended September 30, 2016 and 2015, respectively. Net interest income increased $83,000 primarily due to a $70.8 million increase in the average loan balance offset by a $628,000 increase in interest expense. The yield on average interest-earning assets increased 4 basis points to 3.35% for the third quarter of 2016 from 3.31% for the prior year quarter. The increase was primarily due to a 2 basis point increase in the loans receivable yield and increases in the investment yields. The cost of average interest-bearing liabilities increased 13 basis points to 0.79% for the third quarter of 2016 compared to the prior year quarter. The increase was primarily due to money market and certificate of deposit promotions and a 66 basis point increase in Federal Home Loan Bank of Boston advance costs due a decrease in short term borrowings and due to the 25 basis point increase in the Federal Reserve interest rate during the first quarter of 2016. Net interest margin decreased 5 basis points to 2.74% in the third quarter of 2016 compared to 2.79% in the prior year quarter primarily due to an increase in the cost of interest-bearing liabilities.

Interest expense increased $628,000 for the third quarter of 2016 to $4.1 million compared to the prior year quarter. The average interest-bearing deposits balance increased $170.8 million, the cost of average interest-bearing deposits increased 7 basis points and a 66 basis point increase in Federal Home Loan Bank of Boston advance costs resulted in a 13 basis point increase in the cost of average interest-bearing liabilities to 0.79%. Average balances of noninterest-bearing deposits grew at a rate of 13.5%, while total average interest-bearing deposits grew at a rate of 10.9% for the third quarter in 2016 compared to the prior year quarter.

Provision for Loan Losses:  The allowance for loan losses is maintained at a level management determines to be appropriate to absorb estimated credit losses that are both probable and reasonably estimable at the dates of the financial statements. Management evaluates the adequacy of the allowance for loan losses on a quarterly basis. The assessment considers historical loss experience, historical and current delinquency statistics, the loan portfolio segment and the amount of loans in the loan portfolio, the financial strength of the borrowers, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions and other credit quality indicators.

Management recorded a provision for loan losses of $698,000 and $386,000 for the three months ended September 30, 2016 and 2015, respectively. The provision recorded is based upon management’s analysis of the allowance for loan losses necessary to absorb the estimated credit losses in the loan portfolio for the period. Net charge-offs (recoveries) in the third quarter of 2016 were $155,000 or 0.03% to average loans (annualized) compared to ($43,000) or (0.01%) to average loans (annualized) in the prior year quarter.

At September 30, 2016, the allowance for loan losses totaled $21.3 million, or 0.86% of total loans and 119.26% of non-performing loans, compared to an allowance for loan losses of $20.2 million, or 0.86% of total loans and 135.44% of non-performing loans at December 31, 2015. 

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Noninterest Income: The following table summarizes noninterest income for the three months ended September 30, 2016 and 2015:

	For the Three Months Ended September 30,
	2016		2015		$ Change			% Change
(Dollars in thousands)
Fees for customer services	$	1,600	$	1,536	$	64			4.2	%
Net gain on loans sold		939		993		(54	)		(5.4	)
Brokerage and insurance fee income		58		54		4			7.4
Bank owned life insurance income		335		349		(14	)		(4.0	)
Other		753		309		444			143.7
Total noninterest income	$	3,685	$	3,241	$	444			13.7	%

Total noninterest income increased $444,000 to $3.7 million in the third quarter of 2016 compared to the prior year quarter primarily due to a $444,000 increase in other noninterest income. Other noninterest income increased $444,000 in the third quarter of 2016 compared to the prior year quarter primarily due to an $180,000 increase in mortgage banking derivatives and a $302,000 increase in swap fees offset by a $141,000 increase in impairment on a SBIC fund.

Noninterest Expense: The following table summarizes noninterest expense for the three months ended September 30, 2016 and 2015:

	For the Three Months Ended September 30,
	2016		2015		$ Change			% Change
(Dollars in thousands)
Salaries and employee benefits	$	9,285	$	9,302	$	(17	)		(0.2	)%
Occupancy expense		1,271		1,219		52			4.3
Furniture and equipment expense		1,020		1,034		(14	)		(1.4	)
FDIC assessment		392		413		(21	)		(5.1	)
Marketing		682		443		239			54.0
Other operating expenses		2,834		2,307		527			22.8
Total noninterest expense	$	15,484	$	14,718	$	766			5.2	%

Noninterest expense increased $766,000 in the third quarter of 2016 to $15.5 million compared to the prior year quarter primarily due to a $239,000 increase in marketing expenses and a $527,000 increase in other operating expenses. Other operating expenses increased $527,000 primarily due to a $557,000 gain on foreclosed real estate in the prior year quarter.

Income tax expense was $1.5 million in the third quarter of 2016 compared to $1.6 million in the prior year quarter.

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Net Interest Income Analysis: Average Balance Sheets, Interest and Yields/Costs

The following tables present the average balance sheets, average yields and costs and certain other information for the periods indicated therein on a fully tax-equivalent basis. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero percent yield. Loans held for sale average balance are included in loans average balance. The yields set forth below include the effect of net deferred costs and premiums that are amortized to interest income or expense.

	For The Nine Months Ended September 30,
	2016								2015
	Average Balance		Interest and Dividends(1)			Yield/ Cost			Average Balance		Interest and Dividends(1)			Yield/ Cost
(Dollars in thousands)
Interest-earning assets:
Loans	$	2,394,991	$	64,282			3.59	%	$	2,256,907	$	60,259			3.57	%
Securities		156,876		1,479			1.26	%		188,781		1,337			0.95	%
Federal Home Loan Bank of Boston stock		18,590		527			3.79	%		21,004		331			2.11	%
Federal funds and other earning assets		28,677		104			0.48	%		11,166		19			0.23	%
Total interest-earning assets		2,599,134		66,392			3.41	%		2,477,858		61,946			3.34	%
Noninterest-earning assets		130,327								118,969
Total assets	$	2,729,461							$	2,596,827
Interest-bearing liabilities:
NOW accounts	$	500,097	$	1,101			0.29	%	$	463,878	$	988			0.28	%
Money market		497,130		3,010			0.80	%		450,985		2,635			0.78	%
Savings accounts		221,635		177			0.11	%		212,427		172			0.11	%
Certificates of deposit		468,979		4,158			1.18	%		397,094		2,966			1.00	%
Total interest-bearing deposits		1,687,841		8,446			0.67	%		1,524,384		6,761			0.59	%
Federal Home Loan Bank of Boston advances		267,527		2,902			1.45	%		361,094		2,445			0.91	%
Repurchase agreement borrowings		10,500		289			3.66	%		13,346		351			3.52	%
Repurchase liabilities		46,882		56			0.16	%		56,061		87			0.21	%
Total interest-bearing liabilities		2,012,750		11,693			0.78	%		1,954,885		9,644			0.66	%
Noninterest-bearing deposits		404,599								349,444
Other noninterest-bearing liabilities		59,668								52,000
Total liabilities		2,477,017								2,356,329
Stockholders' equity		252,444								240,498
Total liabilities and stockholders' equity	$	2,729,461							$	2,596,827
Tax-equivalent net interest income			$	54,699							$	52,302
Less: tax-equivalent adjustment				(1,566	)							(1,156	)
Net interest income			$	53,133							$	51,146
Net interest rate spread(2)							2.63	%							2.68	%
Net interest-earning assets(3)	$	586,384							$	522,973
Net interest margin(4)							2.81	%							2.82	%
Average interest-earning assets to average interest-bearing liabilities				129.13	%							126.75	%

(1) On a fully-tax equivalent basis.

(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin represents tax-equivalent net interest income divided by average total interest-earning assets.

63 

Rate Volume Analysis

The following table sets forth the effects of changing rates and volumes on tax-equivalent net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the volume and rate columns. For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.

	Nine Months Ended September 30,
	2016 vs. 2015
	Increase (decrease) due to
(Dollars in thousands)	Volume			Rate			Total
Interest-earning assets:
Loans	$	3,757		$	266		$	4,023
Investment securities		(252	)		394			142
Federal Home Loan Bank of Boston stock		(42	)		238			196
Federal funds and other earning assets		49			36			85
Total interest-earning assets		3,512			934			4,446
Interest-bearing liabilities:
NOW accounts		80			33			113
Money market		279			96			375
Savings accounts		8			(3	)		5
Certificates of deposit		588			604			1,192
Total interest-bearing deposits		955			730			1,685
Federal Home Loan Bank of Boston advances		(751	)		1,208			457
Repurchase agreement borrowing		(78	)		16			(62	)
Repurchase liabilities		(13	)		(18	)		(31	)
Total interest-bearing liabilities		113			1,936			2,049
Increase in net interest income	$	3,399		$	(1,002	)	$	2,397

Summary of Operating Results for the Nine Months Ended September 30, 2016 and 2015

The following discussion provides a summary and comparison of our operating results for the nine months ended September 30, 2016 and 2015:

	For the Nine Months Ended September 30,
	2016		2015		$ Change			% Change
(Dollars in thousands)
Net interest income	$	53,133	$	51,146	$	1,987			3.9	%
Provision for loan losses		1,716		1,664		52			3.1
Noninterest income		9,202		9,979		(777	)		(7.8	)
Noninterest expense		45,405		45,252		153			0.3
Income before taxes		15,214		14,209		1,005			7.1
Income tax expense		4,185		4,011		174			4.3
Net income	$	11,029	$	10,198	$	831			8.1	%

For the nine months ended September 30, 2016, net income increased $831,000 compared to the nine months ended September 30, 2015. The increase in net income was primarily driven by a $2.0 million increase in net interest income due to organic loan growth offset by a $777,000 decrease in noninterest income.

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Comparison of Operating Results for the nine months ended September 30, 2016 and 2015

Our results of operations depend primarily on net interest income, which is the difference between the interest income on earning assets, such as loans and investments, and the interest expense incurred on interest-bearing liabilities, such as deposits and borrowings. We also generate noninterest income; including service charges on deposit accounts, gain on sale of securities, income from mortgage banking activities, bank-owned life insurance income, brokerage fees, insurance commissions and other miscellaneous fees. Our noninterest expense primarily consists of salary and employee benefits, occupancy expense, furniture and equipment expenses, FDIC assessments, marketing and other general and administrative expenses. Our results of operations are also affected by our provision for loan losses.

Net Interest Income: Net interest income is determined by the interest rate spread (i.e., the difference between the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities) and the relative amounts of interest-earning assets and interest-bearing liabilities. Net interest income before the provision for loan losses was $53.1 million and $51.1 million for the nine months ended September 30, 2016 and 2015, respectively. Net interest income increased $2.0 million primarily due to a $138.1 million increase in the average loan balance and a $345,000 increase in prepayment penalty fees offset by a $2.0 million increase in interest expense. The yield on average interest-earning assets increased 7 basis points to 3.41% for the nine months ended September 30, 2016 from 3.34% for the nine months ended September 30, 2015. The increase was primarily due to a 2 basis point increase in the loans receivable yield and increases in the investment yields. The cost of average interest-bearing liabilities increased 12 basis points to 0.78% for the nine months ended September 30, 2016. The increase was primarily due to certificate of deposit promotions and a 54 basis point increase in Federal Home Loan Bank of Boston advance costs due a decrease in short term borrowings and due to the 25 basis point increase in the Federal Reserve interest rate during the first quarter of 2016. Net interest margin decreased 1 basis point to 2.81% in the nine months ended September 30, 2016 compared to 2.82% in the nine months ended September 30, 2015.

Interest expense increased $2.0 million for the nine months ended September 30, 2016 to $11.7 million compared to the same period a year ago. The average interest-bearing deposits balance increased $163.5 million, the cost of average interest-bearing deposits increased 8 basis points and a 54 basis point increase in Federal Home Loan Bank of Boston advance costs resulted in a 12 basis point increase in the yield on average interest-bearing liabilities to 0.78%. Average balances of noninterest-bearing deposits grew at a rate of 15.8%, while total average interest-bearing deposits grew at a rate of 10.7% for the nine months ended September 30, 2016 compared to the same period a year ago.

Provision for Loan Losses: The allowance for loan losses is maintained at a level management determines to be appropriate to absorb estimated credit losses that are both probable and reasonably estimable at the dates of the financial statements. Management evaluates the adequacy of the allowance for loan losses on a quarterly basis. The assessment considers historical loss experience, historical and current delinquency statistics, the loan portfolio segment and the amount of loans in the loan portfolio, the financial strength of the borrowers, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions and other credit quality indicators.

Management recorded a provision for loan losses of $1.7 million for the nine months ended September 30, 2016 and 2015. The provision recorded is based upon management’s analysis of the allowance for loan losses necessary to absorb the estimated credit losses in the loan portfolio for the period. Net charge-offs were $651,000 and $614,000 for the nine months ended September 30, 2016 and 2015, respectively.

At September 30, 2016, the allowance for loan losses totaled $21.3 million, or 0.86% of total loans and 119.26% of non-performing loans, compared to an allowance for loan losses of $20.2 million, or 0.86% of total loans and 135.44% of non-performing loans at December 31, 2015. 

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Noninterest Income: The following table summarizes noninterest income for the nine months ended September 30, 2016 and 2015:

	For the Nine Months Ended September 30,
	2016		2015		$ Change			% Change
(Dollars in thousands)
Fees for customer services	$	4,614	$	4,409	$	205			4.6	%
Gain on sales of investments		-		1,523		(1,523	)		(100.0	)
Net gain on loans sold		2,180		1,925		255			13.2
Brokerage and insurance fee income		166		163		3			1.8
Bank owned life insurance income		1,056		946		110			11.6
Other		1,186		1,013		173			17.1
Total noninterest income	$	9,202	$	9,979	$	(777	)		(7.8	)%

Total noninterest income decreased $777,000 to $9.2 million for the nine months ended September 30, 2016 compared to the prior year. There was no gain on sale of investments for the nine months ended September 30, 2016 compared to $1.5 million gain on sale of investments for the nine months ended September 30, 2015. Net gain on loans sold increased $255,000 to $2.2 million for the nine months ended September 30, 2016 primarily due to an increase in volume. Other income increased $173,000 for the nine months ended September 30, 2016 compared to the prior year primarily due to a $406,000 increase in swap fees and a $93,000 increase in banking derivatives offset by a $283,000 mortgage servicing rights impairment due to a decline in interest rates and by a $76,000 increase in impairment on a SBIC fund.

Noninterest Expense: The following table summarizes noninterest expense for the nine months ended September 30, 2016 and 2015:

	For the Nine Months Ended September 30,
	2016		2015		$ Change			% Change
(Dollars in thousands)
Salaries and employee benefits	$	27,874	$	27,127	$	747			2.8	%
Occupancy expense		3,679		3,858		(179	)		(4.6	)
Furniture and equipment expense		3,099		3,147		(48	)		(1.5	)
FDIC assessment		1,179		1,227		(48	)		(3.9	)
Marketing		1,647		1,386		261			18.8
Other operating expenses		7,927		8,507		(580	)		(6.8	)
Total noninterest expense	$	45,405	$	45,252	$	153			0.3	%

Noninterest expense increased slightly to $45.4 million for the nine months ended September 30, 2016 compared to $45.3 million for the nine months ended September 30, 2015. Salaries and employee benefits increased $747,000 primarily due to our branch expansion into western Massachusetts during the 4^th quarter of 2015 and to maintain the Bank’s growth. Occupancy expense decreased $179,000 primarily due to the closing of our Westfarms, Connecticut branch in early January 2016. Marketing increased $261,000 primarily related to branch openings and general marketing promotions. Other operating expenses decreased $580,000 primarily due to a $453,000 decrease in the provision for off-balance sheet commitments, a $554,000 decrease in stock compensation costs due to two directors retiring in the second quarter of 2015 offset by a $557,000 gain on foreclosed real estate for the nine months ended September 30, 2015.

Income tax expense was $4.2 million and $4.0 million for the nine months ended September 30, 2016 and 2015, respectively.

Liquidity and Capital Resources:

We maintain liquid assets at levels we consider adequate to meet our liquidity needs. We adjust our liquidity levels to fund loan commitments, repay our borrowings, fund deposit outflows, fund operations and pay escrow obligations on items in our loan portfolio. We also adjust liquidity as appropriate to meet asset and liability management objectives.

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Our primary sources of liquidity are deposits, principal repayment and prepayment of loans, the sale in the secondary market of loans held for sale, maturities and sales of investment securities and other short-term investments, periodic pay downs of mortgage-backed securities, and earnings and funds provided from operations. While scheduled principal repayments on loans are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions and rates offered by our competitors. We set the interest rates on our deposits to maintain a desired level of total deposits. In addition, we invest excess funds in short-term interest-earning assets, which provide liquidity to meet lending requirements.

A portion of our liquidity consists of cash and cash equivalents, which are a product of our operating, investing and financing activities. At September 30, 2016, $89.9 million of our assets were invested in cash and cash equivalents compared to $59.1 million at December 31, 2015. Our primary sources of cash are principal repayments on loans, proceeds from the maturities of investment securities, increases in deposit accounts, proceeds from residential loan sales and advances from FHLBB.

For the nine months ended September 30, 2016 and 2015, loan originations and purchases, net of collected principal and loan sales, totaled $115.4 million and $201.8 million, respectively.  Cash received from the sales and maturities of available-for-sale investment securities totaled $129.2 million and $215.9 million for the nine months ended September 30, 2016 and 2015, respectively. We purchased $130.0 million and $199.1 million of available-for-sale investment securities during the nine months ended September 30, 2016 and 2015, respectively.

Liquidity management is both a daily and longer-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLBB, which provides an additional source of funds. At September 30, 2016, we had $220.6 million in advances from the FHLBB and an additional available borrowing limit of $518.5 million, compared to $377.6 million in advances from the FHLBB and an additional available borrowing limit of $407.8 million at December 31, 2015, subject to collateral requirements of the FHLBB. The Company also had letters of credit of $95.5 million and $63.0 million at September 30, 2016 and December 31, 2015, respectively, subject to collateral requirements of the FHLBB. Internal policies limit borrowings to 25.0% of total assets, or $708.0 million and $677.1 million at December 30, 2016 and December 31, 2015, respectively. Other sources of funds include access to pre-approved unsecured lines of credit with financial institutions for $55.0 million, our $8.8 million secured line of credit with the FHLBB and our $3.5 million unsecured line of credit with a bank which were all undrawn at September 30, 2016. The Federal Reserve Bank’s discount window loan collateral program enables us to borrow up to $66.6 million on an overnight basis as of September 30, 2016. The funding arrangement was collateralized by $135.1 million in pledged commercial real estate loans as of September 30, 2016.

We had outstanding commitments to originate loans of $73.5 million and $46.1 million and unfunded commitments under construction loans, lines of credit and stand-by letters of credit of $482.8 million and $441.2 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016 and December 31, 2015, time deposits scheduled to mature in less than one year totaled $288.9 million and $267.7 million, respectively. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits are not retained by us, we will have to utilize other funding sources, such as FHLBB advances, brokered deposits, our $55.0 million unsecured lines of credit with financial institutions, our $8.8 million secured line of credit with the FHLBB, our $3.5 million unsecured line of credit with a bank or our $66.6 million overnight borrowing arrangement with the Federal Reserve Bank in order to maintain our level of assets. Alternatively, we would reduce our level of liquid assets, such as our cash and cash equivalents in order to meet funding needs. In addition, the cost of such deposits may be significantly higher if market interest rates are higher or if there is an increased amount of competition for deposits in our market area at the time of renewal.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

General: The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of loans and available-for-sale investment securities, generally have longer contractual maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and reduce the exposure of our net interest income to changes in market interest rates. Accordingly, our board of directors has established an asset/liability committee which is responsible for (i) evaluating the interest rate risk inherent in our assets and liabilities, (ii) determining the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives and (iii) managing this risk consistent with the guidelines approved by our board of directors. Management monitors the level of interest rate risk on a regular basis and the asset/liability committee meets at least quarterly to review our asset/liability policies and interest rate risk position.

We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates. During the low interest rate environment that has existed in recent years, we have implemented the following strategies to manage our interest rate risk: (i) emphasizing adjustable rate commercial and consumer loans, (ii) maintaining a short average life investment portfolio and (iii) periodically lengthening the term structure of our borrowings from the FHLBB. Additionally, we sell a portion of our fixed-rate residential mortgages to the secondary market. These measures should serve to reduce the volatility of our future net interest income in different interest rate environments.

Quantitative Analysis: An economic value of equity and an income simulation analysis are used to estimate our interest rate risk exposure at a particular point in time. We are most reliant on the income simulation method as it is a dynamic method in that it incorporates our forecasted balance sheet growth assumptions under the different interest rate scenarios tested. We utilize the income simulation method to analyze our interest rate sensitivity position and to manage the risk associated with interest rate movements. At least quarterly, our asset/liability committee reviews the potential effect that changes in interest rates could have on the repayment or repricing of rate sensitive assets and the funding requirements of rate sensitive liabilities. Our most recent simulation uses projected repricing of assets and liabilities on the basis of contractual maturities, anticipated repayments and scheduled rate adjustments. Prepayment rate assumptions can have a significant impact on interest income simulation results. Because of the large percentage of loans and mortgage-backed securities we hold, rising or falling interest rates may have a significant impact on the actual prepayment speeds of our mortgage related assets that may in turn effect our interest rate sensitivity position. When interest rates rise, prepayment speeds slow and the average expected life of our assets would tend to lengthen more than the expected average life of our liabilities and would therefore alter our existing interest rate risk position.

Our asset/liability policy currently limits projected changes in net interest income to a maximum variance of (4.0%, 8.0%, 10.0% and 12.0%) assuming a 100, 200, 300 or 400 basis point interest rate shock, respectively, as measured over a 12 month period when compared to the flat rate scenario.

The following table depicts the percentage increase and/or decrease in estimated net interest income over twelve months based on the scenarios run at each of the periods presented:

	Percentage Increase (Decrease) in Estimated Net Interest Income Over 12 Months
	At September 30, 2016			At December 31, 2015
100 basis point decrease		(8.36	)%		(6.99	)%
100 basis point increase		6.22	%		4.23	%
200 basis point increase		7.54	%		4.43	%
300 basis point increase		8.57	%		4.73	%
400 basis point increase		8.05	%		3.87	%

68 

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Part II. Other Information

Item 1. Legal Proceedings

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s consolidated financial statements.

Item 1A. Risk Factors

There have been no material changes in the “Risk Factors” from those previously disclosed in the Form 10-K filed on March 11, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) During the quarter ending September 30, 2016, the Company did not make any repurchases of common stock.

On June 21, 2013, the Company received regulatory approval to repurchase up to 1,676,452 shares, or 10% of its then current outstanding common stock. The Company has 600,945 shares remaining available to be repurchased at September 30, 2016. Repurchased shares will be held as treasury stock and will be available for general corporate purposes.

Item 3. Defaults Upon Senior Securities

Not Applicable

69 

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

Not Applicable

Item 6. Exhibits

3.1 Amended and Restated Certificate of Incorporation of First Connecticut Bancorp, Inc. (filed as Exhibit 3.1 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

3.2.2 Second Amended and Restated Bylaws of First Connecticut Bancorp, Inc. (filed as Exhibit 3.2.2 to the Form 8-K filed for the Company on February 23, 2016, and incorporated herein by reference).

4.1 Form of Common Stock Certificate of First Connecticut Bancorp, Inc. (filed as Exhibit 4.1 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.2 Supplemental Executive Retirement Plan of Farmington Bank (filed as Exhibit 10.2 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.3 Voluntary Deferred Compensation Plan for Directors and Key Employees (filed as Exhibit 10.3 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.4 First Amendment to Voluntary Deferred Compensation Plan for Directors and Key Employees (filed as Exhibit 10.4 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.4.1 Second Amendment to Voluntary Deferred Compensation Plan for Directors and Key Employees (filed as Exhibit 10.4.1 to the Form 10-K for the year ended December 31, 2012 filed on March 18, 2013, and incorporated herein by reference).

10.5 Voluntary Deferred Compensation Plan for Key Employees (filed as Exhibit 10.5 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.6 Life Insurance Premium Reimbursement Agreement between Farmington Bank and John J. Patrick, Jr. (filed as Exhibit 10.6 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.7 Life Insurance Premium Reimbursement Agreement between Farmington Bank and Gregory A. White (filed as Exhibit 10.7 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.8 Farmington Savings Bank Defined Benefit Employees’ Pension Plan, as amended (filed as Exhibit 10.8 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.8.1 Farmington Savings Bank Defined Benefit Employees’ Pension Plan, as amended (filed as Exhibit 10.8.1 to the Form 10-K for the year ended December 31, 2012 filed on March 18, 2013, and incorporated herein by reference).

10.9 Annual Incentive Compensation Plan (filed as Exhibit 10.9 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.9.1 Amended Annual Incentive Compensation Plan (filed as Exhibit 10.9.1 to the Form 10-K for the year ended December 31, 2013 filed on March 17, 2014, and incorporated herein by reference)

70 

10.10 Supplemental Retirement Plan Participation Agreement between John J. Patrick, Jr. and Farmington Bank (filed as Exhibit 10.10 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.11 Supplemental Retirement Plan Participation Agreement between Michael T. Schweighoffer and Farmington Bank (filed as Exhibit 10.11 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.12 Supplemental Retirement Plan Participation Agreement between Gregory A. White and Farmington Bank (filed as Exhibit 10.12 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

10.13 Employment Agreement among First Connecticut Bancorp, Inc., Farmington Bank and John J. Patrick, Jr. (filed as Exhibit 10.1 Employment Agreement on Form 8-K for the Company on April 24, 2012 and incorporated herein by reference).

10.13.1 Employment Agreement First Amendment among First Connecticut Bancorp, Inc., Farmington Bank and John J. Patrick, Jr. (filed as Exhibit 10.13.1 to the current report on the Form 8-K filed for the Company on February 28, 2013, as amended, and incorporated herein by reference) (term currently extended to December 31, 2019).

10.14 Life Insurance Premium Reimbursement Agreement between Farmington Bank and Michael T. Schweighoffer (filed as Exhibit 10.14 to the Form 10-Q filed for the Company on May 15, 2012, and incorporated herein by reference).

10.15 First Connecticut Bancorp, Inc. 2012 Stock Incentive Plan (Incorporated by reference to Appendix A in the Definitive Proxy Statement on Form 14A filed on June 6, 2012 and amended on July 2, 2012 (File No. 001-35209-12890818 and 12960688).

21.1 Subsidiaries of First Connecticut Bancorp, Inc. and Farmington Bank (filed as Exhibit 21.1 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).

31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by the Company’s Chief Executive Officer.

31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by the Company’s Chief Financial Officer.

32.1 Written Statement pursuant to 18 U.S.C. § 1350, as created by section 906 of the Sarbanes-Oxley Act of 2002, signed by the Company’s Chief Executive Officer.

32.2 Written Statement pursuant to 18 U.S.C. § 1350, as created by section 906 of the Sarbanes-Oxley Act of 2002, signed by the Company’s Chief Financial Officer.

101 Interactive data files pursuant to Rule 405 of Regulation S-t: (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statement of Changes in Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Consolidated Financial Statements tagged as blocks of text and in detail.*

* As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Act of 1934.

71 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FIRST CONNECTICUT BANCORP, INC.
Date: November 4, 2016	/s/ John J. Patrick, Jr
	John J. Patrick, Jr.
	Chairman, President and Chief Executive Officer
Date: November 4, 2016	/s/ Gregory A. White
	Gregory A. White
	Executive Vice President and Chief Financial Officer

72 

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John J. Patrick, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Connecticut Bancorp, Inc., a Maryland corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2016	/s/ John J. Patrick, Jr
	John J. Patrick, Jr.
	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Gregory A. White, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Connecticut Bancorp, Inc., a Maryland corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2016	/s/ Gregory A. White
	Gregory A. White
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

I, John J. Patrick, Chief Executive Officer and President of First Connecticut Bancorp, Inc., a Maryland corporation (the “Company”), certify in my capacity as an officer of the Company that I have reviewed the quarterly report on Form 10-Q for the quarter ended September 30, 2016 (the “Report”) and that to the best of my knowledge:

1. the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2016	/s/ John J. Patrick, Jr
	John J. Patrick, Jr.
	Chairman, President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

I, Gregory A. White, Executive Vice President and Chief Financial Officer of First Connecticut Bancorp, Inc., a Maryland corporation (the “Company”), certify in my capacity as an officer of the Company that I have reviewed the quarterly report on Form 10-Q for the quarter ended September 30, 2016 (the “Report”) and that to the best of my knowledge:

1. the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2016	/s/ Gregory A. White
	Gregory A. White
	Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 24, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	First Connecticut Bancorp, Inc.
Entity Central Index Key	0001511198
Trading Symbol	fbnk
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		15,809,248
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3

XML

Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands		Sep. 30, 2016	Dec. 31, 2015
Assets
Cash and due from banks		$ 33,206	$ 45,732
Interest bearing deposits with other institutions		56,734	13,407
Total cash and cash equivalents		89,940	59,139
Securities held-to-maturity, at amortized cost		7,338	32,246
Securities available-for-sale, at fair value		134,094	132,424
Loans held for sale		5,462	9,637
Loans	[1]	2,476,364	2,361,796
Allowance for loan losses		(21,263)	(20,198)
Loans, net		2,455,101	2,341,598
Premises and equipment, net		18,383	18,565
Federal Home Loan Bank of Boston stock, at cost		15,139	21,729
Accrued income receivable		6,413	6,747
Bank-owned life insurance		51,364	50,618
Deferred income taxes, net		15,136	15,443
Prepaid expenses and other assets		33,590	20,400
Total assets		2,831,960	2,708,546
Deposits
Interest-bearing		1,828,209	1,589,970
Noninterest-bearing		419,664	401,388
Total Deposits		2,247,873	1,991,358
Federal Home Loan Bank of Boston advances		220,600	377,600
Repurchase agreement borrowings		10,500	10,500
Repurchase liabilities		35,036	35,769
Accrued expenses and other liabilities		62,336	47,598
Total liabilities		2,576,345	2,462,825
Stockholders' Equity
Common stock, $0.01 par value, 30,000,000 shares authorized; 17,947,647 shares issued and 15,805,748 shares outstanding at September 30, 2016 and 17,976,893 shares issued and 15,881,663 shares outstanding at December 31, 2015		181	181
Additional paid-in-capital		183,769	181,997
Unallocated common stock held by ESOP		(10,833)	(11,626)
Treasury stock, at cost (2,141,899 shares at September 30, 2016 and 2,095,230 shares at December 31, 2015)		(31,645)	(30,602)
Retained earnings		120,487	112,933
Accumulated other comprehensive loss		(6,344)	(7,162)
Total stockholders' equity		255,615	245,721
Total liabilities and stockholders' equity		$ 2,831,960	$ 2,708,546

[1] Loans include net deferred loan costs of $3.9 million and $4.0 million at September 30, 2016 and December 31, 2015, respectively.

XML

Consolidated Statements of Financial Condition (Unaudited) (Parentheticals) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Net deferred loan costs	$ 3.9	$ 4.0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	17,947,647	17,976,893
Common stock, shares outstanding	15,805,748	15,881,663
Treasury stock, shares	2,141,899	2,095,230

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Interest and fees on loans
Mortgage		$ 16,134	$ 15,861	$ 48,161	$ 46,250
Other		4,983	4,594	14,555	12,853
Interest and dividends on investments
United States Government and agency obligations		419	401	1,285	1,109
Other bonds		13	13	40	66
Corporate stocks		210	217	681	493
Other interest income		46	8	104	19
Total interest income		21,805	21,094	64,826	60,790
Interest expense
Deposits		2,975	2,412	8,446	6,761
Federal Home Loan Bank of Boston advances		955	890	2,902	2,445
Repurchase agreement borrowings		98	96	289	351
Repurchase liabilities		22	24	56	87
Total interest expense		4,050	3,422	11,693	9,644
Net interest income		17,755	17,672	53,133	51,146
Provision for loan losses		698	386	1,716	1,664
Net interest income after provision for loan losses		17,057	17,286	51,417	49,482
Noninterest income
Fees for customer services		1,600	1,536	4,614	4,409
Gain on sales of investments					1,523
Net gain on loans sold		939	993	2,180	1,925
Brokerage and insurance fee income		58	54	166	163
Bank owned life insurance income		335	349	1,056	946
Other		753	309	1,186	1,013
Total noninterest income		3,685	3,241	9,202	9,979
Noninterest expense
Salaries and employee benefits		9,285	9,302	27,874	27,127
Occupancy expense		1,271	1,219	3,679	3,858
Furniture and equipment expense		1,020	1,034	3,099	3,147
FDIC assessment		392	413	1,179	1,227
Marketing		682	443	1,647	1,386
Other operating expenses		2,834	2,307	7,927	8,507
Total noninterest expense		15,484	14,718	45,405	45,252
Income before income taxes		5,258	5,809	15,214	14,209
Income tax expense		1,485	1,594	4,185	4,011
Net income		$ 3,773	$ 4,215	$ 11,029	$ 10,198
Net earnings per share (See Note 3):
Basic (in dollars per share)	[1]	$ 0.25	$ 0.28	$ 0.74	$ 0.68
Diluted (in dollars per share)	[1]	0.25	0.28	0.73	0.67
Dividends per share (in dollars per share)		$ 0.08	$ 0.06	$ 0.22	$ 0.16

[1] Certain per share amounts may not appear to reconcile due to rounding.

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement Of Income (Loss) and Comprehensive Income (Loss) [Abstract]
Net income	$ 3,773	$ 4,215	$ 11,029	$ 10,198
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period	8	103	776	(2,872)
Less: reclassification adjustment for gains included in net income				1,523
Net change in unrealized gains (losses)	8	103	776	(1,349)
Change related to pension and other postretirement benefit plans	164	170	491	361
Other comprehensive income (loss), before tax	172	273	1,267	(988)
Income tax expense (benefit)	61	96	449	(348)
Other comprehensive income (loss), net of tax	111	177	818	(640)
Comprehensive income	$ 3,884	$ 4,392	$ 11,847	$ 9,558

XML

Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands	Common Stock	Additional Paid in Capital	Unallocated Common Shares Held by ESOP	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Loss	Total
Balance at Dec. 31, 2015	$ 181	$ 181,997	$ (11,626)	$ (30,602)	$ 112,933	$ (7,162)	$ 245,721
Balance (in shares) at Dec. 31, 2015	15,881,663						15,881,663
Increase (Decrease) in Stockholders' Equity [Roll Forward]
ESOP shares released and committed to be released		392	793				$ 1,185
Cash dividend paid ($0.22 per common share)					(3,475)		(3,475)
Treasury stock acquired				(2,527)			(2,527)
Treasury stock acquired (in shares)	(156,800)
Stock options exercised		(53)		1,484			1,431
Stock options exercised (in shares)	110,131
Cancellation of shares for tax withholding		(516)					(516)
Cancelation of shares for tax withholding (in shares)	(29,246)
Tax expense from stock-based compensation		173					173
Share based compensation expense		1,776					1,776
Net income					11,029		11,029
Other comprehensive income						818	818
Balance at Sep. 30, 2016	$ 181	$ 183,769	$ (10,833)	$ (31,645)	$ 120,487	$ (6,344)	$ 255,615
Balance (in shares) at Sep. 30, 2016	15,805,748						15,805,748

XML

Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement Of Stockholders Equity [Abstract]
Dividends per share (in dollars per share)	$ 0.08	$ 0.06	$ 0.22	$ 0.16

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities
Net income	$ 11,029	$ 10,198
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses	1,716	1,664
(Reversal of) provision for off-balance sheet commitments	(415)	38
Depreciation and amortization	1,783	1,990
Amortization of ESOP expense	1,185	1,107
Share based compensation expense	1,776	2,468
Gain on sale of investments		(1,523)
Loans originated for sale	(127,615)	(170,638)
Proceeds from the sale of loans held for sale	133,970	166,564
Loss on disposal of premises and equipment	71	51
Gain on fair value adjustment for mortgage banking derivatives	(146)	(52)
Impairment losses on alternative investments	219	144
Mortgage servicing rights impairment	283
Writedowns on foreclosed real estate	21
Loss (gain) on sale of foreclosed real estate	71	(567)
Net gain on loans sold	(2,180)	(1,925)
Accretion of investment security discounts and premiums, net	(82)	(47)
Change in net deferred loan costs	42	(205)
Decrease (increase) in accrued income receivable	334	(528)
Deferred income tax	(142)	1,255
Increase in cash surrender value of bank-owned life insurance	(974)	(947)
Increase in prepaid expenses and other assets	(13,668)	(8,721)
Increase in accrued expenses and other liabilities	15,487	3,799
Net cash provided by operating activities	22,765	4,125
Cash flows from investing activities
Maturities, calls and principal payments of securities held-to-maturity	24,908	24,738
Maturities, calls and principal payments of securities available-for-sale	129,203	215,934
Purchases of securities held-to-maturity		(34,000)
Purchases of securities available-for-sale	(130,015)	(199,062)
Loan originations, net of principal repayments	(115,449)	(201,790)
Redemptions (purchases) of Federal Home Loan Bank of Boston stock, net	6,590	(3,253)
Proceeds from (purchase of) bank-owned life insurance	228	(10,000)
Proceeds from sale of foreclosed real estate	375	2,620
Purchases of premises and equipment	(1,672)	(1,038)
Net cash used in investing activities	(85,832)	(205,851)
Cash flows from financing activities
Net payments on Federal Home Loan Bank of Boston advances	(157,000)	(28,100)
Decrease in repurchase agreement borrowings		(10,500)
Net increase in demand deposits, NOW accounts, savings accounts and money market accounts	220,136	170,485
Net increase in time deposits	36,379	69,829
Net (decrease) increase in repurchase liabilities	(733)	9,097
Stock options exercised	1,431	365
Excess tax expense from stock-based compensation	173	149
Cancellation of shares for tax withholding	(516)	(498)
Repurchase of common stock	(2,527)	(1,963)
Cash dividend paid	(3,475)	(2,554)
Net cash provided by financing activities	93,868	206,310
Net increase in cash and cash equivalents	30,801	4,584
Cash and cash equivalents at beginning of period	59,139	42,863
Cash and cash equivalents at end of period	89,940	47,447
Supplemental disclosure of cash flow information
Cash paid for interest	11,683	9,557
Cash paid for income taxes	4,337	4,007
Loans transferred to other real estate owned	$ 189	$ 1,991

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Organization and Business

First Connecticut Bancorp, Inc. is a Maryland-chartered bank holding company that wholly owns its only subsidiary, Farmington Bank (collectively with its subsidiary, the “Company”). Farmington Bank's main office is located in Farmington, Connecticut. Farmington Bank is a full-service, community bank with 24 branch locations throughout central Connecticut and western Massachusetts, offering commercial and residential lending as well as wealth management services. Farmington Bank's primary source of income is interest accrued on loans to customers, which include small and middle market businesses and individuals residing primarily in Connecticut and western Massachusetts. However, the Bank will selectively lend to borrowers in other northeastern states.

Wholly-owned subsidiaries of Farmington Bank are Farmington Savings Loan Servicing, Inc., a passive investment company that was established to service and hold loans collateralized by real property; Village Investments, Inc.; the Village Corp., Limited, and Village Square Holdings, Inc.; 28 Main Street Corp., is a subsidiary that was formed to hold residential other real estate owned and Village Management Corp., is a subsidiary that was formed to hold commercial other real estate owned, are presently inactive.

On June 21, 2013, the Company received regulatory approval to repurchase up to 1,676,452 shares, or 10% of its current outstanding common stock. During the nine months ended September 30, 2016, the Company had repurchased 156,800 of these shares at a cost of $2.5 million. Repurchased shares are held as treasury stock and are available for general corporate purposes. The Company has 600,945 shares remaining available to be repurchased at September 30, 2016.

Basis of Financial Statement Presentation

The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The Company has condensed or omitted certain information and footnote disclosures normally included in the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. All significant intercompany transactions and balances have been eliminated in consolidation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2015 included in the Company’s 10-K filed on March 11, 2016. The results of operations for the interim periods are not necessarily indicative of the results for the full year.

In preparing the consolidated financial statements, management is required to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of condition and revenues and expenses for the interim period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, investment security other-than-temporary impairment judgments and investment security valuation.

Investment Securities

Marketable equity and debt securities are classified as either trading, available-for-sale, or held-to-maturity (applies only to debt securities). Management determines the appropriate classifications of securities at the time of purchase. At September 30, 2016 and December 31, 2015, the Company had no debt or equity securities classified as trading. Held-to-maturity securities are debt securities for which the Company has the ability and intent to hold until maturity. All other securities not included in held-to-maturity are classified as available-for-sale. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts on debt securities are amortized or accreted into interest income over the term of the securities using the level yield method. Available-for-sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported in accumulated other comprehensive income, a separate component of equity, until realized. Further information relating to the fair value of securities can be found within Note 4 of the Notes to Consolidated Financial Statements. In accordance with Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 320 — “Debt and Equity Securities”, a decline in market value of a debt security below amortized cost that is deemed other-than-temporary is charged to earnings for the credit related other-than-temporary impairment ("OTTI"), resulting in the establishment of a new cost basis for the security, while the non-credit related OTTI is recognized in other comprehensive income if there is no intent or requirement to sell the security. The securities portfolio is reviewed on a quarterly basis for the presence of other-than-temporary impairment. If an equity security is deemed other-than-temporarily impaired, the full impairment is considered to be credit-related and a charge to earnings would be recorded. Gains and losses on sales of securities are recognized at the time of sale on a specific identification basis.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the lower of amortized cost or fair value, as determined by aggregate outstanding commitments from investors or current investor yield requirements. Net unrealized losses, if any, are recognized through a valuation allowance by charges to other noninterest income in the accompanying Consolidated Statements of Income. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold on the trade date to net gain on loans sold in the accompanying Consolidated Statements of Income.

Loans

The Company’s loan portfolio segments include residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity lines of credit, demand, revolving credit and resort. Construction includes classes for commercial and residential construction.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. When loans are prepaid, sold or participated out, the unamortized portion is recognized as income or expense at that time.

Interest on loans is accrued and recognized in interest income based on contractual rates applied to principal amounts outstanding. Accrual of interest is discontinued, and previously accrued income is reversed, when loan payments are more than 90 days past due or when, in the judgment of management, collectability of the loan or loan interest becomes uncertain. Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within a reasonable period and there is a sustained period of repayment performance (generally a minimum of six months) by the borrower, in accordance with contractual terms involving payment of cash or cash equivalents. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. If a residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort loan is on non-accrual status cash payments are applied towards the reduction of principal.  If loans are considered impaired but accruing, cash payments are applied first to interest income and then as a reduction of principal as specified in the contractual agreement, unless the collection of the remaining principal amount due is considered doubtful.

The policy for determining past due or delinquency status for all loan portfolio segments is based on the number of days past due or the contractual terms of the loan. A loan is considered delinquent when the customer does not make their payments due according to their contractual terms. Generally, a loan can be demanded at any time if the loan is delinquent or if the borrower fails to meet any other agreed upon terms and conditions.

On a quarterly basis, our loan policy requires that we evaluate for impairment all commercial real estate, construction, commercial and resort loan segments that are classified as non-accrual, loans secured by real property in foreclosure or are otherwise likely to be impaired, non-accruing residential and installment loan segments greater than $100,000 and all troubled debt restructurings.

Nonperforming loans consist of non-accruing loans, non-accruing loans identified as trouble debt restructurings and loans past due more than 90 days and still accruing interest.

Allowance for Loan Losses

The allowance for loan losses is maintained at a level believed adequate by management to absorb potential losses inherent in the loan portfolio as of the statement of condition date. The allowance for loan losses consists of a formula allowance following FASB ASC 450 — “Contingencies” and FASB ASC 310 — “Receivables”. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a quarterly basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, allocated and unallocated components, as further described below. All reserves are available to cover any losses regardless of how they are allocated.

General component:

The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the following loan segments: residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort. Construction loans include classes for commercial investment real estate construction, commercial owner occupied construction, residential development, residential subdivision construction and residential owner occupied construction loans. Management uses a rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies and nonaccrual loans; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no material changes in the Company’s policies or methodology pertaining to the general component of the allowance for loan losses during the nine months ended September 30, 2016.

The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows:

Residential real estate — Residential real estate loans are generally originated in amounts up to 95.0% of the lesser of the appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio in excess of 80.0%. The Company does not grant subprime loans. All loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. All residential mortgage loans are underwritten pursuant to secondary market underwriting guidelines which include minimum FICO standards. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Commercial real estate — Loans in this segment are primarily originated to finance income-producing properties throughout the northeastern states. The underlying cash flows generated by the properties may be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, may have an effect on the credit quality in this segment. Management generally obtains rent rolls and other financial information, as appropriate on an annual basis and continually monitors the cash flows of these loans.

Construction loans — Loans in this segment include commercial construction loans, real estate subdivision development loans to developers, licensed contractors and builders for the construction and development of commercial real estate projects and residential properties. Construction lending contains a unique risk characteristic as loans are originated under market and economic conditions that may change between the time of origination and the completion and subsequent purchaser financing of the property. In addition, construction subdivision loans and commercial and residential construction loans to contractors and developers entail additional risks as compared to single-family residential mortgage lending to owner-occupants. These loans typically involve large loan balances concentrated in single borrowers or groups of related borrowers. Real estate subdivision development loans to developers, licensed contractors and builders are generally speculative real estate development loans for which payment is derived from sale of the property. Credit risk may be affected by cost overruns, time to sell at an adequate price, and market conditions. Construction financing is generally considered to involve a higher degree of credit risk than longer-term financing on improved, owner-occupied real estate. Residential construction credit quality may be impacted by the overall health of the economy, including unemployment rates and housing prices.

Commercial — Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Home equity line of credit — Loans in this segment include home equity loans and lines of credit underwritten with a loan-to-value ratio generally limited to no more than 80%, including any first mortgage. Our home equity lines of credit have ten-year terms and adjustable rates of interest which are indexed to the prime rate. The overall health of the economy, including unemployment rates and housing prices, may have an effect on the credit quality in this segment.

Installment, Collateral, Demand, Revolving Credit and Resort – Loans in these segments include loans principally to customers residing in our primary market area with acceptable credit ratings. Our installment and collateral consumer loans generally consist of loans on new and used automobiles, loans collateralized by deposit accounts and unsecured personal loans. The overall health of the economy, including unemployment rates and housing prices, may have an effect on the credit quality in this segment. Excluding collateral loans which are fully collateralized by a deposit account, repayment for loans in these segments is dependent on the credit quality of the individual borrower. The resort portfolio consists of a direct receivable loan outside the Northeast which is amortizing to its contractual obligations. The Company has exited the resort financing market with a residual portfolio remaining.

Allocated component:

The allocated component relates to loans that are classified as impaired. Impairment is measured on a loan by loan basis for commercial real estate, construction, commercial and resort loans by the present value of expected cash flows discounted at the effective interest rate; the fair value of the collateral, if applicable; or the observable market price for the loan. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan is lower than the carrying value of that loan. The Company does not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement or they are nonaccrual loans with outstanding balances greater than $100,000.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Management updates the analysis quarterly. The assumptions used in appraisals are reviewed for appropriateness. Updated appraisals or valuations are obtained as needed or adjusted to reflect the estimated decline in the fair value based upon current market conditions for comparable properties.

The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring ("TDR"). All TDRs are classified as impaired.

Unallocated component:

An unallocated component is maintained, when needed, to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. The Company’s Loan Policy allows management to utilize a high and low range of 0.0% to 5.0% of our total allowance for loan losses when establishing an unallocated allowance, when considered necessary. The unallocated allowance is used to provide for an unidentified loss that may exist in emerging problem loans that cannot be fully quantified or may be affected by conditions not fully understood as of the balance sheet date. There was no unallocated allowance at September 30, 2016 and December 31, 2015.

Troubled Debt Restructuring

A loan is considered a troubled debt restructuring (“TDR”) when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower in modifying or renewing the loan the Company would not otherwise consider. In connection with troubled debt restructurings, terms may be modified to fit the ability of the borrower to repay in line with their current financial status, which may include a reduction in the interest rate to market rate or below, a change in the term or movement of past due amounts to the back-end of the loan or refinancing. A loan is placed on non-accrual status upon being restructured, even if it was not previously, unless the modified loan was current for the six months prior to its modification and we believe the loan is fully collectable in accordance with its new terms. The Company’s policy to restore a restructured loan to performing status is dependent on the receipt of regular payments, generally for a period of six months and one calendar year-end. All troubled debt restructurings are classified as impaired loans and are reviewed for impairment by management on a quarterly basis per Company policy.

Foreclosed Real Estate

Real estate acquired through foreclosure comprises properties acquired in partial or total satisfaction of problem loans. The properties are acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. At the time these properties are foreclosed, the properties are initially recorded at the fair value at the date of foreclosure less estimated selling costs. Losses arising at the time of acquisition of such properties are charged against the allowance for loan losses. Subsequent loss provisions are charged to the foreclosed real estate valuation allowance and expenses incurred to maintain the properties are charged to noninterest expense. Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and a charge to operations is recorded as necessary to reduce the carrying amount to fair value less estimated costs to dispose. Revenue and expense from the operation of other real estate owned and the provision to establish and adjust valuation allowances are included in noninterest expenses. Costs relating to the development and improvement of the property are capitalized, subject to the limit of fair value of the collateral. In the Consolidated Statements of Financial Condition, total prepaid expenses and other assets include foreclosed real estate of $-0- and $279,000 as of September 30, 2016 and December 31, 2015, with no specific valuation allowance. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction totaled $4.5 million at September 30, 2016.

Pension and Other Postretirement Benefit Plans

The Company’s non-contributory defined-benefit pension plan and certain defined benefit postretirement plans were frozen as of February 28, 2013 and no additional benefits will accrue.

The Company has a non-contributory defined benefit pension plan that provides benefits for substantially all employees hired before January 1, 2007 who meet certain requirements as to age and length of service. The benefits are based on years of service and average compensation, as defined in the Plan Document. The Company’s funding practice is to meet the minimum funding standards established by the Employee Retirement Income Security Act of 1974.

In addition to providing pension benefits, we provide certain health care and life insurance benefits for retired employees. Participants or eligible employees hired before January 1, 1993 become eligible for the benefits if they retire after reaching age 62 with fifteen or more years of service. A fixed percent of annual costs are paid depending on length of service at retirement. The Company accrues for the estimated costs of these other post-retirement benefits through charges to expense during the years that employees render service. The Company makes contributions to cover the current benefits paid under this plan. The Company believes the policy for determining pension and other post-retirement benefit expenses is critical because judgments are required with respect to the appropriate discount rate, rate of return on assets and other items. The Company reviews and updates the assumptions annually. If the Company’s estimate of pension and post-retirement expense is too low it may experience higher expenses in the future, reducing its net income. If the Company’s estimate is too high, it may experience lower expenses in the future, increasing its net income.

Income Taxes

Deferred income taxes are provided for differences arising in the timing of income and expenses for financial reporting and for income tax purposes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides a deferred tax asset valuation allowance for the estimated future tax effects attributable to temporary differences and carryforwards when realization is determined not to be more likely than not.

FASB ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Pursuant to FASB ASC 740-10, the Company examines its financial statements, its income tax provision and its federal and state income tax returns and analyzes its tax positions, including permanent and temporary differences, as well as the major components of income and expense to determine whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties arising from income tax settlements as part of its provision for income taxes.

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 provides guidance in accounting principles generally accepted in the United States of America about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company does not expect ASU 2014-15 to have a significant impact on its financial statements.

In August 2015, the FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers (Topic 606)." In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), with an original effective date for annual reporting periods beginning after December 15, 2016. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2015-14 deferred the effective date of ASU 2014-09 to annual periods and interim periods within those annual periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. Early application is not permitted. The Company is assessing the impact of ASU 2015-14 on its accounting and disclosures.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments — Overall (Topic 825-10): "Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends the guidance on the classification and measurement of financial instruments. Some of the amendments in ASU 2016-01 include the following: 1) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and 4) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value; among others. For public business entities, the amendments of ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is assessing the impact of ASU 2016-01 on its accounting and disclosures.

In February 2016, the FASB issued ASU No. 2016-02 "Leases (Topic 842)." ASU 2016-02 supersedes Topic 840, Leases. This ASU is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Some of the provisions in ASU 2016-02 include the following: 1) requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease), 2) requires lessor accounting to be updated to align with certain changes to the lessee model and the new revenue recognition standard, 3) an arrangement contains an embedded lease if property, plant, or equipment is explicitly or implicitly identified and its use is controlled by the customer, 4) in certain circumstances, the lessee is required to remeasure the lease payments, and 5) requires extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing contracts. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is assessing the impact of ASU 2016-02 on its accounting and disclosures.

In March 2016, the FASB issued ASU No. 2016-07 "Investments — Equity Method and Joint Ventures (Topic 323) Simplifying the Transition to the Equity Method of Accounting." This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. For public business entities, ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The Company is assessing the impact of ASU 2016-07 on its accounting and disclosures.

In March 2016, the FASB issued ASU No. 2016-09 “Compensation — Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” This ASU requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election for forfeitures as they occur. For public business entities, ASU No. 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is assessing the impact of ASU 2016-09 on its accounting and disclosures.

In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments — Credit Losses (Topic 326)" requires an entity to utilize a new impairment model known as the current expected credit loss ("CECL") model to estimate its lifetime "expected credit loss" and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This ASU also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. ASU 2016-13 is effective for public business entities for annual periods beginning after December 13, 2019, including interim periods within those fiscal years. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is assessing the impact of ASU 2016-13 on its accounting and disclosures.

In August 2016, the FASB issued ASU No. 2016-15 “Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides cash flow statement classification guidance for certain transactions including how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company is assessing the impact of ASU 2016-15 its accounting and disclosures.

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Restrictions on Cash and Due from Banks

9 Months Ended

Sep. 30, 2016

Restrictions On Cash and Due From Banks [Abstract]

Restrictions on Cash and Due from Banks

2. Restrictions on Cash and Due from Banks

The Company is required to maintain a percentage of transaction account balances on deposit in non-interest-earning reserves with the Federal Reserve Bank, offset by the Company’s average vault cash. The Company also is required to maintain cash balances to collateralize the Company’s position with certain third parties. The Company had cash and liquid assets of approximately $30.4 million and $17.7 million to meet these requirements at September 30, 2016 and December 31, 2015, respectively.

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Earnings Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

3. Earnings Per Share

The following table sets forth the calculation of basic and diluted earnings per share:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands, except per share data):
Net income	$	3,773		$	4,215		$	11,029		$	10,198
Less:  Dividends to participating shares		-			(8	)		(18	)		(33	)
Income allocated to participating shares		(15	)		(63	)		(58	)		(127	)
Net income allocated to common stockholders	$	3,758		$	4,144		$	10,953		$	10,038
Weighted-average shares issued		17,968,628			17,998,820			17,974,118			18,003,666
Less:  Average unallocated ESOP shares		(897,948	)		(993,416	)		(921,630	)		(1,017,019	)
Average treasury stock		(2,156,167	)		(2,084,182	)		(2,167,900	)		(2,031,904	)
Average unvested restricted stock		(90,599	)		(288,271	)		(114,306	)		(247,835	)
Weighted-average basic shares outstanding		14,823,914			14,632,951			14,770,282			14,706,908
Plus: Average dilutive shares		368,092			254,510			322,827			176,454
Weighted-average diluted shares outstanding		15,192,006			14,887,461			15,093,109			14,883,362
Net earnings per share(1):
Basic	$	0.25		$	0.28		$	0.74		$	0.68
Diluted	$	0.25		$	0.28		$	0.73		$	0.67

(1)  Certain per share amounts may not appear to reconcile due to rounding.

For the nine months ended September 30, 2016 and 2015, respectively, 44,000 and 79,500 options were anti-dilutive and therefore excluded from the earnings per share calculation.

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Investment Securities

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

4. Investment Securities

Investment securities are summarized as follows:

	September 30, 2016
			Recognized in OCI							Not Recognized in OCI
			Gross		Gross					Gross		Gross
	Amortized		Unrealized		Unrealized			Carrying		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses			Value		Gains		Losses		Value
Available-for-sale
Debt securities:
U.S. Treasury obligations	$	19,814	$	275	$	-		$	20,089	$	-	$	-	$	20,089
U.S. Government agency obligations		102,986		168		(35	)		103,119		-		-		103,119
Government sponsored residential mortgage-backed securities		3,751		183		-			3,934		-		-		3,934
Corporate debt securities		1,000		24		-			1,024		-		-		1,024
Preferred equity securities		2,000		-		(132	)		1,868		-		-		1,868
Marketable equity securities		108		61		(2	)		167		-		-		167
Mutual funds		4,042		-		(149	)		3,893		-		-		3,893
Total securities available-for-sale	$	133,701	$	711	$	(318	)	$	134,094	$	-	$	-	$	134,094
Held-to-maturity
Government sponsored residential mortgage-backed securities	$	7,338	$	-	$	-		$	7,338	$	281	$	-	$	7,619
Total securities held-to-maturity	$	7,338	$	-	$	-		$	7,338	$	281	$	-	$	7,619

	December 31, 2015
			Recognized in OCI							Not Recognized in OCI
			Gross		Gross					Gross		Gross
	Amortized		Unrealized		Unrealized			Carrying		Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost		Gains		Losses			Value		Gains		Losses			Value
Available-for-sale
Debt securities:
U.S. Treasury obligations	$	38,782	$	83	$	(6	)	$	38,859	$	-	$	-		$	38,859
U.S. Government agency obligations		82,002		43		(240	)		81,805		-		-			81,805
Government sponsored residential mortgage-backed securities		4,958		195		-			5,153		-		-			5,153
Corporate debt securities		1,000		48		-			1,048		-		-			1,048
Preferred equity securities		2,000		-		(368	)		1,632		-		-			1,632
Marketable equity securities		108		54		(2	)		160		-		-			160
Mutual funds		3,957		-		(190	)		3,767		-		-			3,767
Total securities available-for-sale	$	132,807	$	423	$	(806	)	$	132,424	$	-	$	-		$	132,424
Held-to-maturity
U.S. Government agency obligations	$	24,000	$	-	$	-		$	24,000	$	28	$	(20	)	$	24,008
Government sponsored residential mortgage-backed securities		8,246		-		-			8,246		103		-			8,349
Total securities held-to-maturity	$	32,246	$	-	$	-		$	32,246	$	131	$	(20	)	$	32,357

The following tables summarize gross unrealized losses and fair value, aggregated by investment category and length of time the investments have been in a continuous unrealized loss position at September 30, 2016 and December 31, 2015:

	September 30, 2016
			Less than 12 Months					12 Months or More					Total
					Gross					Gross					Gross
	Number of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Securities		Value		Loss			Value		Loss			Value		Loss
Available-for-sale:
U.S. Government agency obligations		3	$	26,965	$	(35	)	$	-	$	-		$	26,965	$	(35	)
Preferred equity securities		1		-		-			1,868		(132	)		1,868		(132	)
Marketable equity securities		1		-		-			5		(2	)		5		(2	)
Mutual funds		1		-		-			3,893		(149	)		3,893		(149	)
Total investment securities in an unrealized loss position		6	$	26,965	$	(35	)	$	5,766	$	(283	)	$	32,731	$	(318	)

	December 31, 2015
			Less than 12 Months					12 Months or More					Total
					Gross					Gross					Gross
	Number of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Securities		Value		Loss			Value		Loss			Value		Loss
Available-for-sale:
U.S. Treasury obligations		4	$	19,935	$	(6	)	$	-	$	-		$	19,935	$	(6	)
U.S. Government agency obligations		7		56,762		(240	)		-		-			56,762		(240	)
Preferred equity securities		1		-		-			1,632		(368	)		1,632		(368	)
Marketable equity securities		1		-		-			5		(2	)		5		(2	)
Mutual funds		1		-		-			2,768		(190	)		2,768		(190	)
		14	$	76,697	$	(246	)	$	4,405	$	(560	)	$	81,102	$	(806	)
Held-to-maturity
U.S. Government agency obligations		1	$	6,980	$	(20	)	$	-	$	-		$	6,980	$	(20	)
		1		6,980		(20	)		-		-			6,980		(20	)
Total investment securities in an unrealized loss position		15	$	83,677	$	(266	)	$	4,405	$	(560	)	$	88,082	$	(826	)

Management believes that no individual unrealized loss as of September 30, 2016 represents an other-than-temporary impairment (“OTTI”), based on its detailed review of the securities portfolio. The Company has no intent to sell nor is it more likely than not that the Company will be required to sell any of the securities in a loss position during the period of time necessary to recover the unrealized losses, which may be until maturity.

The following summarizes the conclusions from our OTTI evaluation for those security types that incurred significant gross unrealized losses greater than twelve months as of September 30, 2016:

Preferred equity securities — The unrealized loss on preferred equity securities in a loss position for 12 months or more relates to one preferred equity security. This investment is in a global financial institution. When estimating the recovery period for securities in an unrealized loss position, management utilizes analyst forecasts, earnings assumptions and other company-specific financial performance metrics. In addition, this assessment incorporates general market data, industry and sector cycles and related trends to determine a reasonable recovery period. Management evaluated the near-term prospects of the issuer in relation to the severity and duration of the impairment. Management concluded that the preferred equity security is not other-than-temporarily impaired at September 30, 2016.

Mutual funds — The unrealized loss on mutual funds in a loss position for 12 months or more relates to one mutual fund. The fund invests primarily in high quality debt securities and other debt instruments supporting the affordable housing industry in areas of the United States designated by fund shareholders. When estimating the recovery period for securities in an unrealized loss position, management utilizes analyst forecasts, earnings assumptions and other fund-specific financial performance metrics. In addition, this assessment incorporates general market data, industry and sector cycles and related trends to determine a reasonable recovery period. Management evaluated the near-term prospects of the fund in relation to the severity and duration of the impairment. Management concluded that the mutual fund is not other-than-temporarily impaired at September 30, 2016.

The Company recorded no other-than-temporary impairment charges to the investment securities portfolios for the three and nine months ended September 30, 2016 and 2015.

There were no gross realized gains on sales of securities available-for-sale for the three and nine months ended September 30, 2016. There were gross realized gains on sales of securities available-for-sale totaling $-0- and $1.5 million for the three and nine months ended September 30, 2015, respectively

As of September 30, 2016 and December 31, 2015, U.S. Treasury, U.S. Government agency obligations and Government sponsored residential mortgage-backed securities with a fair value of $115.8 million and $112.4 million, respectively, were pledged as collateral for loan derivatives, public funds, repurchase liabilities and repurchase agreement borrowings.

The amortized cost and estimated fair value of debt securities at September 30, 2016 and December 31, 2015 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or repayment penalties:

	September 30, 2016
	Available-for-Sale				Held-to-Maturity
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(Dollars in thousands)
Due in one year or less	$	42,485	$	42,494	$	-	$	-
Due after one year through five years		81,315		81,738		-		-
Due after five years through ten years		-		-		-		-
Due after ten years		-		-		-		-
Government sponsored residential mortgage-backed securities		3,751		3,934		7,338		7,619
	$	127,551	$	128,166	$	7,338	$	7,619

	December 31, 2015
	Available-for-Sale				Held-to-Maturity
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(Dollars in thousands)
Due in one year or less	$	54,499	$	54,511	$	-	$	-
Due after one year through five years		67,285		67,201		24,000		24,008
Due after five years through ten years		-		-		-		-
Due after ten years		-		-		-		-
Government sponsored residential mortgage-backed securities		4,958		5,153		8,246		8,349
	$	126,742	$	126,865	$	32,246	$	32,357

Federal Home Loan Bank of Boston (“FHLBB”) Stock

The Company, as a member of the FHLBB, owned $15.1 million and $21.7 million of FHLBB capital stock at September 30, 2016 and December 31, 2015, respectively, which is equal to its FHLBB capital stock requirement. The Company evaluated its FHLBB capital stock for potential other-than-temporary impairment at September 30, 2016. Capital adequacy, credit ratings, the value of the stock, overall financial condition of the FHLB system and FHLBB as well as current economic factors were analyzed in the impairment analysis. The Company concluded that its position in FHLBB capital stock is not other-than-temporarily impaired at September 30, 2016.

Alternative Investments

Alternative investments, which totaled $2.3 million at September 30, 2016 and December 31, 2015, are included in other assets in the accompanying Consolidated Statements of Financial Condition. The Company’s alternative investments include investments in certain non-public funds, which include limited partnerships, an equity fund and membership stocks. These investments are held at cost and were evaluated for potential other-than-temporary impairment at September 30, 2016. The Company recognized a $219,000 and $144,000 other-than-temporary impairment charge on its limited partnerships for the nine months ended September 30, 2016 and 2015, respectively, included in other noninterest income in the accompanying Consolidated Statements of Income. The Company recognized profit distributions in its limited partnerships of $179,000 and $26,000 for the nine months ended September 30, 2016 and 2015, respectively. See a further discussion of fair value in Note 15 — Fair Value Measurements. The Company has $619,000 in unfunded commitments remaining for its alternative investments as of September 30, 2016.

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Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Loans and Allowance for Loan Losses

5. Loans and Allowance for Loan Losses

Loans consisted of the following:

	September 30,			December 31,
	2016			2015
(Dollars in thousands)
Real estate:
Residential	$	864,054		$	849,722
Commercial		931,703			887,431
Construction		50,083			30,895
Installment		3,211			2,970
Commercial		449,008			409,550
Collateral		1,621			1,668
Home equity line of credit		172,148			174,701
Revolving credit		82			91
Resort		512			784
Total loans		2,472,422			2,357,812
Net deferred loan costs		3,942			3,984
Loans		2,476,364			2,361,796
Allowance for loan losses		(21,263	)		(20,198	)
Loans, net	$	2,455,101		$	2,341,598

Changes in the allowance for loan losses by segments for the three and nine months ended September 30, 2016 and 2015 are as follows:

	For the Three Months Ended September 30, 2016
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses		Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	3,744	$	(57	)	$	-	$	157	$	3,844
Commercial		10,489		-			-		151		10,640
Construction		327		-			-		102		429
Installment		39		(2	)		-		1		38
Commercial		4,630		(28	)		-		177		4,779
Collateral		-		-			-		-		-
Home equity line of credit		1,491		(13	)		-		55		1,533
Revolving credit		-		(62	)		7		55		-
Resort		-		-			-		-		-
	$	20,720	$	(162	)	$	7	$	698	$	21,263

	For the Three Months Ended September 30, 2015
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,452	$	(2	)	$	95	$	(432	)	$	4,113
Commercial		9,001		-			-		464			9,465
Construction		361		-			-		(135	)		226
Installment		36		-			-		(2	)		34
Commercial		3,745		(4	)		6		348			4,095
Collateral		-		-			-		-			-
Home equity line of credit		1,986		-			-		91			2,077
Revolving credit		-		(58	)		6		52			-
Resort		-		-			-		-			-
	$	19,581	$	(64	)	$	107	$	386		$	20,010

	For the Nine Months Ended September 30, 2016
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,084	$	(81	)	$	1	$	(160	)	$	3,844
Commercial		10,255		-			-		385			10,640
Construction		231		-			-		198			429
Installment		39		(3	)		-		2			38
Commercial		4,119		(370	)		10		1,020			4,779
Collateral		-		(10	)		-		10			-
Home equity line of credit		1,470		(13	)		-		76			1,533
Revolving credit		-		(209	)		24		185			-
Resort		-		-			-		-			-
	$	20,198	$	(686	)	$	35	$	1,716		$	21,263

	For the Nine Months Ended September 30, 2015
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,382	$	(195	)	$	111	$	(185	)	$	4,113
Commercial		8,949		(213	)		-		729			9,465
Construction		478		-			-		(252	)		226
Installment		41		(3	)		-		(4	)		34
Commercial		3,250		(24	)		6		863			4,095
Collateral		-		-			-		-			-
Home equity line of credit		1,859		(138	)		-		356			2,077
Revolving credit		-		(179	)		21		158			-
Resort		1		-			-		(1	)		-
	$	18,960	$	(752	)	$	138	$	1,664		$	20,010

The following table lists the allocation of the allowance by impairment methodology and by loan segment at September 30, 2016 and December 31, 2015:

	September 30, 2016				December 31, 2015
(Dollars in thousands)	Total		Reserve Allocation		Total		Reserve Allocation
Loans individually evaluated for impairment:
Real estate:
Residential	$	12,577	$	141	$	12,377	$	139
Commercial		15,089		19		16,152		26
Construction		4,719		-		4,719		-
Installment		230		7		259		8
Commercial		2,604		297		6,023		361
Collateral		-		-		-		-
Home equity line of credit		1,867		-		703		-
Revolving credit		-		-		-		-
Resort		512		-		784		-
		37,598		464		41,017		534
Loans collectively evaluated for impairment:
Real estate:
Residential	$	856,224	$	3,703	$	841,921	$	3,945
Commercial		915,861		10,621		870,757		10,229
Construction		45,364		429		26,176		231
Installment		2,974		31		2,695		31
Commercial		446,359		4,482		403,473		3,758
Collateral		1,621		-		1,668		-
Home equity line of credit		170,281		1,533		173,998		1,470
Revolving credit		82		-		91		-
Resort		-		-		-		-
		2,438,766		20,799		2,320,779		19,664
Total	$	2,476,364	$	21,263	$	2,361,796	$	20,198

The following is a summary of loan delinquencies at recorded investment values at September 30, 2016 and December 31, 2015:

	September 30, 2016
	30-59 Days				60-89 Days				> 90 Days								Past Due 90 Days or More
(Dollars in thousands)	Past Due				Past Due				Past Due				Total				and Still
	Number		Amount		Number		Amount		Number		Amount		Number		Amount		Accruing
Real estate:
Residential		12	$	2,476		12	$	1,445		16	$	7,382		40	$	11,303	$	-
Commercial		-		-		-		-		1		914		1		914		-
Construction		-		-		1		4,532		1		187		2		4,719		-
Installment		-		-		1		24		-		-		1		24		-
Commercial		2		45		1		64		2		458		5		567		-
Collateral		4		32		-		-		-		-		4		32		-
Home equity line of credit		3		317		-		-		2		327		5		644		-
Demand		1		35		-		-		-		-		1		35		-
Revolving credit		-		-		-		-		-		-		-		-		-
Resort		-		-		-		-		-		-		-		-		-
Total		22	$	2,905		15	$	6,065		22	$	9,268		59	$	18,238	$	-

	December 31, 2015
	30-59 Days				60-89 Days				> 90 Days								Past Due 90 Days or More
(Dollars in thousands)	Past Due				Past Due				Past Due				Total				and Still
	Number		Amount		Number		Amount		Number		Amount		Number		Amount		Accruing
Real estate:
Residential		18	$	3,379		5	$	863		15	$	6,304		38	$	10,546	$	-
Commercial		2		318		-		-		1		994		3		1,312		-
Construction		-		-		-		-		1		187		1		187		-
Installment		3		38		-		-		-		-		3		38		-
Commercial		4		153		-		-		2		1,752		6		1,905		-
Collateral		7		68		-		-		1		10		8		78		-
Home equity line of credit		3		280		2		360		2		210		7		850		-
Demand		1		29		-		-		-		-		1		29		-
Revolving credit		-		-		-		-		-		-		-		-		-
Resort		-		-		-		-		-		-		-		-		-
Total		38	$	4,265		7	$	1,223		22	$	9,457		67	$	14,945	$	-

Nonperforming assets consist of non-accruing loans including non-accruing loans identified as troubled debt restructurings, loans past due more than 90 days and still accruing interest and other real estate owned. The following table lists nonperforming assets at:

	September 30,		December 31,
(Dollars in thousands)	2016		2015
Nonaccrual loans:
Real estate:
Residential	$	9,575	$	9,773
Commercial		1,008		1,106
Construction		4,719		187
Installment		24		32
Commercial		1,677		3,232
Collateral		11		10
Home equity line of credit		815		573
Revolving credit		-		-
Resort		-		-
Total nonaccruing loans		17,829		14,913
Loans 90 days past due and still accruing		-		-
Other real estate owned		-		279
Total nonperforming assets	$	17,829	$	15,192

The following is a summary of information pertaining to impaired loans at September 30, 2016 and December 31, 2015:

	September 30, 2016						December 31, 2015
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans without a valuation allowance:
Real estate:
Residential	$	11,616	$	13,168	$	-	$	11,530	$	12,878	$	-
Commercial		12,208		12,336		-		13,233		13,303		-
Construction		4,719		4,964		-		4,719		4,965		-
Installment		205		222		-		202		202		-
Commercial		2,029		2,255		-		3,921		4,066		-
Collateral		-		-		-		-		-		-
Home equity line of credit		1,867		1,910		-		703		719		-
Revolving credit		-		-		-		-		-		-
Resort		512		512		-		784		784		-
Total		33,156		35,367		-		35,092		36,917		-
Impaired loans with a valuation allowance:
Real estate:
Residential		961		980		141		847		881		139
Commercial		2,881		2,881		19		2,919		2,919		26
Construction		-		-		-		-		-		-
Installment		25		25		7		57		72		8
Commercial		575		1,267		297		2,102		2,457		361
Collateral		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-
Revolving credit		-		-		-		-		-		-
Resort		-		-		-		-		-		-
Total		4,442		5,153		464		5,925		6,329		534
Total impaired loans	$	37,598	$	40,520	$	464	$	41,017	$	43,246	$	534

The following table summarizes average recorded investment and interest income recognized on impaired loans:

			Three Months		Nine Months				Three Months		Nine Months
			Ended		Ended				Ended		Ended
	September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	2016		2016		2016		2015		2015		2015
	Average		Interest		Interest		Average		Interest		Interest
	Recorded		Income		Income		Recorded		Income		Income
(Dollars in thousands)	Investment		Recognized		Recognized		Investment		Recognized		Recognized
Impaired loans without a valuation allowance:
Real estate:
Residential	$	11,394	$	22	$	71	$	9,204	$	25	$	78
Commercial		12,850		125		396		13,817		144		433
Construction		4,719		-		69		4,719		35		103
Installment		211		3		9		243		3		11
Commercial		2,552		8		27		4,083		27		82
Collateral		-		-		-		-		-		-
Home equity line of credit		1,417		9		18		1,010		2		3
Revolving Credit		-		-		-		-		-		-
Resort		648		5		17		841		5		20
Total		33,791		172		607		33,917		241		730
Impaired loans with a valuation allowance:
Real estate:
Residential		876		8		33		2,308		9		27
Commercial		2,900		35		105		4,086		36		122
Construction		-		-		-		-		-		-
Installment		33		-		1		29		-		-
Commercial		1,256		1		3		1,694		3		13
Collateral		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-
Revolving Credit		-		-		-		-		-		-
Resort		-		-		-		-		-		-
Total		5,065		44		142		8,117		48		162
Total impaired loans	$	38,856	$	216	$	749	$	42,034	$	289	$	892

There was no interest income recognized on a cash basis method of accounting for the three and nine months ended September 30, 2016 and 2015.

The following tables present information on loans whose terms had been modified in a troubled debt restructuring at September 30, 2016 and December 31, 2015:

	September 30, 2016
	TDRs on Accrual Status				TDRs on Nonaccrual Status				Total TDRs
(Dollars in thousands)	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Real estate:
Residential		14	$	2,549		9	$	4,691		23	$	7,240
Commercial		3		5,972		-		-		3		5,972
Construction		-		-		2		4,719		2		4,719
Installment		4		206		1		24		5		230
Commercial		3		600		8		1,220		11		1,820
Collateral		-		-		-		-		-		-
Home equity line of credit		8		1,076		1		58		9		1,134
Revolving credit		-		-		-		-		-		-
Resort		1		512		-		-		1		512
Total		33	$	10,915		21	$	10,712		54	$	21,627

	December 31, 2015
	TDRs on Accrual Status				TDRs on Nonaccrual Status				Total TDRs
(Dollars in thousands)	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Real estate:
Residential		14	$	2,242		11	$	5,557		25	$	7,799
Commercial		4		6,664		-		-		4		6,664
Construction		1		4,532		1		187		2		4,719
Installment		4		227		2		32		6		259
Commercial		6		2,350		8		1,482		14		3,832
Collateral		-		-		-		-		-		-
Home equity line of credit		3		153		-		-		3		153
Revolving credit		-		-		-		-		-		-
Resort		1		784		-		-		1		784
Total		33	$	16,952		22	$	7,258		55	$	24,210

The recorded investment balance of TDRs were $21.6 million and $24.2 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016 and December 31, 2015, the majority of the Company’s TDRs are on accrual status. TDRs on accrual status were $10.9 million and $17.0 million while TDRs on nonaccrual status were $10.7 million and $7.3 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016, 100% of the accruing TDRs have been performing in accordance with the restructured terms. At September 30, 2016 and December 31, 2015, the allowance for loan losses included specific reserves of $282,000 and $340,000 related to TDRs, respectively. For the nine months ended September 30, 2016 and 2015, the Bank had charge-offs totaling $28,000 and $204,000, respectively, related to portions of TDRs deemed to be uncollectible. The Bank may provide additional funds to borrowers in TDR status. The amount of additional funds available to borrowers in TDR status was $87,000 and $272,000 at September 30, 2016 and December 31, 2015, respectively.

The following tables include the recorded investment and number of modifications for modified loans. The Company reports the recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured for the three and nine months ended September 30, 2016 and 2015:

	For the Three Months Ended September 30, 2016						For the Nine Months Ended September 30, 2016
(Dollars in thousands)	Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)		Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)
Troubled Debt Restructurings:
Real estate
Residential		1	$	231	$	231		1	$	231	$	231
Commercial		1		117		117		1		117		117
Home equity line of credit		-		-		-		6		985		982
Total		2	$	348	$	348	$	8	$	1,333	$	1,330

	For the Three Months Ended September 30, 2015						For the Nine Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)		Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)
Troubled Debt Restructurings:
Real estate
Residential		2	$	507	$	507		8	$	1,549	$	1,536
Commercial		-		-		-		1		493		487
Installment		-		-		-		1		44		41
Commercial		-		-		-		3		133		129
Home equity line of credit		-		-		-		3		153		153
Total		2	$	507	$	507		16	$	2,372	$	2,346

(1)  The period end balances are inclusive of all partial paydowns and charge-offs since the modification date.  TDRs fully paid off, charged-off or foreclosed upon

by period end are not included.

The following tables provide TDR loans that were modified by means of extended maturity, below market adjusted interest rates, a combination of rate and maturity, or by other means including covenant modifications, forbearance and/or the concessions and borrowers discharged in bankruptcy for the three and nine months ended September 30, 2016 and 2015:

	For the Three Months Ended September 30, 2016
(Dollars in thousands)	Number of  Modifications		Extended  Maturity		Adjusted  Interest  Rates		Combination  of Rate and  Maturity		Other		Total
Real estate
Residential		1	$	-	$	-	$	-	$	231	$	231
Commercial		1		117		-		-		-		117
Total		2	$	117	$	-	$	-	$	231	$	348

	For the Nine Months Ended September 30, 2016
(Dollars in thousands)	Number of  Modifications		Extended  Maturity		Adjusted  Interest  Rates		Combination  of Rate and  Maturity		Other		Total
Real estate
Residential		1	$	-	$	-	$	-	$	231	$	231
Commercial		1		117		-		-		-		117
Home equity line of credit		6		-		-		-		982		982
Total		8	$	117	$	-	$	-	$	1,213	$	1,330

	For the Three Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Extended Maturity		Adjusted Interest Rates		Combination of Rate and Maturity		Other		Total
Real estate
Residential		2	$	-	$	-	$	-	$	507	$	507
Total		2	$	-	$	-	$	-	$	507	$	507

	For the Nine Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Extended Maturity		Adjusted Interest Rates		Combination of Rate and Maturity		Other		Total
Real estate
Residential		8	$	-	$	-	$	-	$	1,536	$	1,536
Commercial		1		-		-		-		487		487
Installment		1		-		-		-		41		41
Commercial		3		-		-		34		95		129
Home equity line of credit		3		-		-		-		153		153
Total		16	$	-	$	-	$	34	$	2,312	$	2,346

A TDR is considered to be in re-default once it is more than 30 days past due following a modification. There were no loans that defaulted during the twelve month period preceding the modification date during the three and nine months ended September 30, 2016. The following loans defaulted during the twelve month period preceding the modification date during the three and nine months ended September 30, 2015.

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2015				September 30, 2015
(Dollars in thousands)	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(1)
Real estate
Residential		1	$	319		1	$	319
Installment		1		33		1		33
Total		2	$	352		2	$	352

(1) The period end balances are inclusive of all partial paydowns and charge-offs since the modification date. TDRs fully paid off, charged-off or foreclosed upon by period end are not included.

Credit Quality Information

At the time of loan origination, a risk rating based on a nine point grading system is assigned to each commercial-related loan based on the loan officer’s and management’s assessment of the risk associated with each particular loan. This risk assessment is based on an in depth analysis of a variety of factors. More complex loans and larger commitments require the Company’s internal credit risk management department further evaluate the risk rating of the individual loan or relationship, with credit risk management having final determination of the appropriate risk rating. These more complex loans and relationships receive ongoing periodic review to assess the appropriate risk rating on a post-closing basis with changes made to the risk rating as the borrower’s and economic conditions warrant. The Company’s risk rating system is designed to be a dynamic system and we grade loans on a “real time” basis. The Company places considerable emphasis on risk rating accuracy, risk rating justification, and risk rating triggers. The Company’s risk rating process has been enhanced with its implementation of industry-based risk rating “cards.” The cards are used by the loan officers and promote risk rating accuracy and consistency on an institution-wide basis. Most loans are reviewed annually as part of a comprehensive portfolio review conducted by management and/or by an independent loan review firm. More frequent reviews of loans rated low pass, special mention, substandard and doubtful are conducted by the credit risk management department. The Company utilizes an independent loan review consulting firm to review its rating accuracy and the overall credit quality of its loan portfolio. The review is designed to provide an evaluation of the portfolio with respect to risk rating profile as well as with regard to the soundness of individual loan files. The individual loan reviews include an analysis of the creditworthiness of obligors, via appropriate key ratios and cash flow analysis and an assessment of collateral protection. The consulting firm conducts two loan reviews per year aiming at a 65.0% or higher commercial and industrial loans and commercial real estate portfolio penetration. Summary findings of all loan reviews performed by the outside consulting firm are reported to the board of directors and senior management of the Company upon completion.

The Company utilizes a point risk rating scale as follows:

Risk Rating Definitions

Residential and consumer loans are not rated unless they are 45 days or more delinquent, in which case, depending on past-due days, they will be rated 6, 7 or 8.

Loans rated 1 – 5, 55:	Commercial loans in these categories are considered “pass” rated loans with low to average risk.
Loans rated 6:	Residential, Consumer and Commercial loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management.
Loans rated 7:	Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected.
Loans rated 8:	Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.
Loans rated 9:	Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted.

The following table presents the Company’s loans by risk rating at September 30, 2016 and December 31, 2015:

	September 30, 2016
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Real estate:
Residential	$	853,388	$	762	$	9,904	$	-	$	864,054
Commercial		917,459		4,610		9,634		-		931,703
Construction		45,364		-		4,719		-		50,083
Installment		3,161		26		24		-		3,211
Commercial		429,921		5,772		13,198		117		449,008
Collateral		1,610		-		11		-		1,621
Home equity line of credit		171,105		39		1,004		-		172,148
Revolving credit		82		-		-		-		82
Resort		512		-		-		-		512
Total Loans	$	2,422,602	$	11,209	$	38,494	$	117	$	2,472,422

	December 31, 2015
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Real estate:
Residential	$	838,314	$	1,154	$	10,254	$	-	$	849,722
Commercial		867,531		10,861		9,039		-		887,431
Construction		26,176		-		4,719		-		30,895
Installment		2,886		52		32		-		2,970
Commercial		390,719		10,354		8,311		166		409,550
Collateral		1,647		-		21		-		1,668
Home equity line of credit		173,879		229		593		-		174,701
Revolving credit		91		-		-		-		91
Resort		784		-		-		-		784
Total Loans	$	2,302,027	$	22,650	$	32,969	$	166	$	2,357,812

The Company places considerable emphasis on the early identification of problem assets, problem-resolution and minimizing loss exposure. Delinquency notices are mailed monthly to all delinquent borrowers, advising them of the amount of their delinquency. Residential and consumer lending borrowers are typically given 30 days to pay the delinquent payments or to contact us to make arrangements to bring the loan current over a longer period of time. Generally, if a residential or consumer lending borrower fails to bring the loan current within 90 days from the original due date or to make arrangements to cure the delinquency over a longer period of time, the matter is referred to legal counsel and foreclosure or other collection proceedings are initiated. The Company may consider forbearance or a loan restructuring in certain circumstances where a temporary loss of income is the primary cause of the delinquency, and if a reasonable plan is presented by the borrower to cure the delinquency in a reasonable period of time after his or her income resumes. Problem or delinquent borrowers in our commercial real estate, commercial business and resort portfolios are handled on a case-by-case basis, typically by our Special Assets Department. Appropriate problem-resolution and workout strategies are formulated based on the specific facts and circumstances.

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Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2016

Mortgage Servicing Rights [Abstract]

Mortgage Servicing Rights

6. Mortgage Servicing Rights

The Company services residential real estate mortgage loans that it has sold without recourse to third parties. The carrying value of mortgage servicing rights was $4.4 million and $4.4 million at September 30, 2016 and December 31, 2015, respectively, and the balance is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Financial Condition. The fair value of mortgage servicing rights approximated $4.4 million and $5.0 million at September 30, 2016 and December 31, 2015, respectively. Mortgage servicing rights impairment totaling $283,000 and $-0- for the nine months ended September 30, 2016 and 2015, respectively, is included as a component of other noninterest income in the accompanying Consolidated Statements of Income. Total loans sold with servicing rights retained were $106.9 million and $149.2 million for the nine months ended September 30, 2016 and 2015, respectively. The net gain on loans sold totaled $2.2 million and $1.9 million for the nine months ended September 30, 2016 and 2015, respectively, and is included in the accompanying Consolidated Statements of Income.

The principal balance of loans serviced for others, which are not included in the accompanying Consolidated Statements of Financial Condition, totaled $522.4 million and $457.5 million at September 30, 2016 and December 31, 2015, respectively. Loan servicing fees for others totaling $897,000 and $653,000 for the nine months ended September 30, 2016 and 2015, respectively, are included as a component of other noninterest income in the accompanying Consolidated Statements of Income.

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Credit Arrangements

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Credit Arrangements

7. Credit Arrangements

The Company has access to a pre-approved line of credit with the Federal Home Loan Bank of Boston (“FHLBB”) for $8.8 million, which was undrawn at September 30, 2016 and December 31, 2015. The Company has access to pre-approved unsecured lines of credit with financial institutions totaling $55.0 million and $45.0 million, which were undrawn at September 30, 2016 and December 31, 2015, respectively. The Company has access to a $3.5 million unsecured line of credit agreement with a bank which expires on August 31, 2017. The line was undrawn at September 30, 2016 and December 31, 2015. The Company maintains a cash balance of $512,500 with certain financial institutions to avoid fees associated with the lines.

In accordance with an agreement with the FHLBB, the Company is required to maintain qualified collateral, as defined in the FHLBB Statement of Credit Policy, free and clear of liens, pledges and encumbrances, as collateral for the advances, if any, and the preapproved line of credit. The Company is in compliance with these collateral requirements.

FHLBB advances totaled $220.6 million and $377.6 million at September 30, 2016 and December 31, 2015, respectively. Advances from the FHLBB are collateralized by first residential and commercial mortgages and home equity lines of credit with an estimated eligible collateral value of $1.2 billion and $1.3 billion at September 30, 2016 and December 31, 2015, respectively. The Company had available borrowings of $518.5 million and $407.8 million at September 30, 2016 and December 31, 2015, respectively, subject to collateral requirements of the FHLBB. The Company also had letters of credit of $95.5 million and $63.0 million at September 30, 2016 and December 31, 2015, respectively, subject to collateral requirements of the FHLBB. The Company is required to acquire and hold shares of capital stock in the FHLBB in an amount at least equal to the sum of 0.35% of the aggregate principal amount of its unpaid residential mortgage loans and similar obligations at the beginning of each year, or up to 4.5% of its advances (borrowings) from the FHLBB. The carrying value of FHLBB stock approximates fair value based on the redemption provisions of the stock.

The Company participates in the Federal Reserve Bank’s discount window loan collateral program that enables the Company to borrow up to $66.6 million and $63.2 million on an overnight basis at September 30, 2016 and December 31, 2015, respectively, and was undrawn as of September 30, 2016 and December 31, 2015. The funding arrangement was collateralized by $135.1 million and $136.6 million in pledged commercial real estate loans as of September 30, 2016 and December 31, 2015, respectively.

The Bank has a Master Repurchase Agreement borrowing facility with a broker. Borrowings under the Master Repurchase Agreement are secured by the Company’s investments in certain securities with a fair value of $11.0 million and $11.3 million at September 30, 2016 and December 31, 2015, respectively. Outstanding borrowings totaled $10.5 million at September 30, 2016 and December 31, 2015.

The Bank offers overnight repurchase liability agreements to commercial or municipal customers whose excess deposit account balances are swept daily into collateralized repurchase liability accounts. The overnight repurchase liability agreements do not contain master netting arrangements. The Bank had repurchase liabilities outstanding of $35.0 million and $35.8 million at September 30, 2016 and December 31, 2015, respectively. They are secured by the Company’s investment in specific issues of U.S. Treasury obligations, Government sponsored residential mortgage-backed securities and U.S. Government agency obligations with a market value of $41.4 million and $40.4 million as of September 30, 2016 and December 31, 2015, respectively.

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Deposits

9 Months Ended

Sep. 30, 2016

Banking and Thrift [Abstract]

Deposits

8. Deposits

Deposit balances are as follows:

	September 30,		December 31,
	2016		2015
(Dollars in thousands)
Noninterest-bearing demand deposits	$	419,664	$	401,388
Interest-bearing
NOW accounts		590,213		468,054
Money market		536,979		460,737
Savings accounts		223,848		220,389
Time deposits		477,169		440,790
Total interest-bearing deposits		1,828,209		1,589,970
Total deposits	$	2,247,873	$	1,991,358

The Company has established a relationship to participate in a reciprocal deposit program with other financial institutions as a service to our customers. This program provides enhanced FDIC insurance to participating customers. The Company also has established a relationship for brokered deposits. There were brokered deposits totaling $43.2 million and $44.3 million at September 30, 2016 and December 31, 2015, respectively.

Time certificates of deposit in denominations of $250,000 or more approximated $106.3 million and $89.6 million at September 30, 2016 and December 31, 2015, respectively.

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Pension and Other Postretirement Benefit Plans

9 Months Ended

Sep. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefit Plans

9. Pension and Other Postretirement Benefit Plans

The following tables set forth the components of net periodic pension and benefit costs.

	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands)
Service cost	$	-		$	-		$	14		$	14
Interest cost		264			259			30			30
Expected return on plan assets		(279	)		(362	)		-			-
Amortization:		-						-
Loss		176			178			-			3
Prior service cost		-			-			(13	)		(13	)
Net periodic benefit cost	$	161		$	75		$	31		$	34

	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands)
Service cost	$	-		$	-		$	42		$	43
Interest cost		789			777			90			91
Expected return on plan assets		(835	)		(1,086	)		-			-
Amortization:								-
Loss		528			532			-			9
Prior service cost		-			-			(38	)		(38	)
Net periodic benefit cost	$	482		$	223		$	94		$	105

The Company’s non-contributory defined-benefit pension plan and certain defined benefit postretirement plans were frozen as of February 28, 2013 and no additional benefits will accrue.

The Company’s funding practice is to meet the minimum funding standards established by the Employee Retirement Income Security Act of 1974. Since the supplemental plan and the postretirement benefit plans are unfunded, the Company accrues for the estimated costs of these plans through charges to expense during the year that employees render service. The Company makes contributions to cover the current benefits paid under these plans.

Employee Stock Ownership Plan

The Company established the ESOP to provide eligible employees the opportunity to own Company stock. The Company provided a loan to the Farmington Bank Employee Stock Ownership Plan Trust in the amount needed to purchase up to 1,430,416 shares of the Company’s common stock. The loan bears an interest rate equal to the Wall Street Journal Prime Rate plus one percentage point, adjusted annually, and provides for annual payments of interest and principal over the 15 year term of the loan. At September 30, 2016, the loan had an outstanding balance of $12.0 million and an interest rate of 4.50%. The Bank has committed to make contributions to the ESOP sufficient to support the debt service of the loan. The loan is secured by the unallocated shares purchased. The ESOP compensation expense was $1.2 million and $1.1 million for the nine months ended September 30, 2016 and 2015, respectively.

Shares held by the ESOP include the following as of September 30, 2016:

Allocated	476,805
Committed to be released	71,391
Unallocated	882,220
	1,430,416

The fair value of unallocated ESOP shares was $15.7 million at September 30, 2016.

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Stock Incentive Plan

9 Months Ended

Sep. 30, 2016

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Stock Incentive Plan

10. Stock Incentive Plans

In May 2016, the Company’s shareholders approved the First Connecticut Bancorp, Inc. 2016 Stock Incentive Plan (the “2016 Plan”). The 2016 Plan provides for a total of 300,000 shares of common stock for issuance upon the grant or exercise of awards. The Company has not issued any shares from the 2016 Plan as of September 30, 2016.

In August 2012, the Company implemented the First Connecticut Bancorp, Inc. 2012 Stock Incentive Plan (the “2012 Plan”). The 2012 Plan provides for a total of 2,503,228 shares of common stock for issuance upon the grant or exercise of awards. The Plan allows for the granting of 1,788,020 non-qualified stock options and 715,208 shares of restricted stock.

In accordance with generally accepted accounting principles for Share-Based Payments, the Company expenses the fair value of all share-based compensation grants over the requisite service periods. Under the 2012 Plan, stock options granted vested 20% immediately and will vest 20% at each annual anniversary of the grant date through 2016 and expire ten years after grant date. The Company recognizes compensation expense for the fair values of these awards, which vest on a straight-line basis over the requisite service period of the awards. Restricted shares granted vested 20% immediately and will vest 20% at each annual anniversary of the grant date through 2016. The product of the number of shares granted and the grant date market price of the Company’s common stock determines the fair value of restricted shares under the Company’s restricted stock plan. The Company recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period for the entire award.

The Company classifies share-based compensation for employees within “Salaries and employee benefits” and share-based payments for outside directors within “Other operating expenses” in the Consolidated Statements of Income. For the nine months ended September 30, 2016 and 2015, the Company recorded $1.8 million and $2.5 million of share-based compensation expense, respectively, comprised of $726,000 and $1.0 million of stock option expense, respectively and $1.1 million and $1.5 million of restricted stock expense, respectively. Expected future compensation expense relating to the 49,150 non-vested options outstanding at September 30, 2016, is $150,000 over the remaining weighted-average period of 2.32 years.

The fair value of the options awarded is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table. Expected volatility is based on the Company’s historical volatility and the historical volatility of a peer group as the Company does not have reliably determined stock price for the period needed that is at least equal to its expected term and the Company’s recent historical volatility may not reflect future expectations. The peer group consisted of financial institutions located in New England and the Mid-Atlantic regions of the United States based on whose common stock is traded on a national securities exchange, asset size, tangible capital ratio and earnings factors. The expected term of options granted is derived from using the simplified method due to the Company not having sufficient historical share option experience upon which to estimate an expected term. The risk-free rate is based on the grant date for a traded zero-coupon U.S. Treasury bond with a term equal to the option’s expected term.

Weighted-average assumptions for the nine months ended September 30, 2016 and 2015:

	2016			2015
Weighted per share average fair value of options granted	$	3.00		$	3.33
Weighted-average assumptions:
Risk-free interest rate		1.53	%		1.61	%
Expected volatility		22.88	%		24.96	%
Expected dividend yield		2.13	%		1.99	%
Weighted-average dividend yield		1.91 - 2.25	%		1.50% - 2.35	%
Expected life of options granted		6.0 years			6.0 years

The following is a summary of the Company’s stock option activity and related information for its option grants for the nine months ended September 30, 2016.

	Number of Stock Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2015		1,656,157		$	13.11
Granted		9,000			16.52
Exercised		(110,131	)		13.00
Forfeited		(2,700	)		14.59
Expired		-			-
Outstanding at September 30, 2016		1,552,326		$	13.14		6.06	$	7,218
Exercisable at September 30, 2016		1,503,176		$	13.05		5.99	$	7,128

The total intrinsic value of options exercised during the nine months ended September 30, 2016 was $416,000.

The following is a summary of the status of the Company’s restricted stock for the nine months ended September 30, 2016.

	Number of Restricted Stock			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2015		126,290		$	12.95
Granted		-			-
Vested		(126,290	)		12.95
Forfeited		-			-
Unvested at September 30, 2016		-		$	-

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

11. Derivative Financial Instruments

Non-Hedge Accounting Derivatives/Non-designated Hedges:

The Company does not use derivatives for trading or speculative purposes. Interest rate swap derivatives not designated as hedges are offered to certain qualifying commercial customers and to manage the Company’s exposure to interest rate movements but do not meet the strict hedge accounting under FASB ASC 815, “Derivatives and Hedging”. The interest rate swap agreements enable these customers to synthetically fix the interest rate on variable interest rate loans. The customers pay a variable rate and enter into a fixed rate swap agreement with the Company. The credit risk associated with the interest rate swap derivatives executed with these customers is essentially the same as that involved in extending loans and is subject to the Company’s normal credit policies. The Company obtains collateral, if needed, based upon its assessment of the customers’ credit quality. Generally, interest rate swap agreements are offered to “pass” rated customers requesting long-term commercial loans or commercial mortgages in amounts generally of at least $1.0 million. The interest rate swap agreement with our customers is cross-collateralized by the loan collateral. The interest rate swap agreements do not have any embedded interest rate caps or floors.

For every variable interest rate swap agreement entered into with a commercial customer, the Company simultaneously enters into a fixed rate interest rate swap agreement with a correspondent bank, agreeing to pay a fixed income stream and receive a variable interest rate swap. The Company is party to master netting agreements with its correspondent banks; however, the Company does not offset assets and liabilities for financial statement presentation purposes. The master netting agreements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of cash is received or posted by the counterparty with the net liability position, in accordance with contract thresholds. As of September 30, 2016, the Company maintained a cash balance of $26.7 million with a correspondent bank to collateralize its position. The Company has an agreement with a correspondent bank to secure any outstanding receivable in excess of $10.0 million.

Credit-risk-related Contingent Features

The Company’s agreements with its derivative counterparties contain the following provisions:

· if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations;

· if the Company fails to maintain its status as a well/adequately capitalized institution, then the counterparty could terminate the derivative positions, and the Company would be required to settle its obligations under the agreements;

· if the Company fails to maintain a specified minimum leverage ratio, then the Company could be declared in default on its derivative obligations; and

· if a specified event or condition occurs that materially changes the Company’s creditworthiness in an adverse manner, it may be required to fully collateralize its obligations under the derivative instrument.

The Company is in compliance with the above provisions as of September 30, 2016.

The Company has established a derivatives policy which sets forth the parameters for such transactions (including underwriting guidelines, rate setting process, maximum maturity, approval and documentation requirements), as well as identifies internal controls for the management of risks related to these hedging activities (such as approval of counterparties, limits on counterparty credit risk, maximum loan amounts, and limits to single dealer counterparties).

The interest rate swap derivatives executed with our customers and our counterparties, are marked to market and are included with prepaid expenses and other assets and accrued expenses and other liabilities on the Consolidated Statements of Financial Condition at fair value. The Company had the following outstanding interest rate swaps that were not designated for hedge accounting:

		September 30, 2016							December 31, 2015
(Dollars in thousands)	Consolidated Balance Sheet Location	# of Instruments		Notional Amount		Estimated Fair Values			# of Instruments		Notional Amount		Estimated Fair Values
Commercial loan customer interest rate swap position	Other Assets		81	$	371,691	$	23,952			60	$	257,693	$	10,564
Commercial loan customer interest rate swap position	Other Liabilities		-		-		-			6		23,411		(78	)
Counterparty interest rate swap position	Other Liabilities		81		371,691		(24,246	)		66		281,104		(10,599	)

The Company recorded the changes in the fair value of non-hedge accounting derivatives as a component of other noninterest income except for interest received and paid which is reported in interest income in the accompanying Consolidated Statements of Income as follows:

	For The Three Months Ended September 30,
	2016									2015
	Interest Income  Recorded in  Interest Income			MTM Gain (Loss) Recorded  in Noninterest  Income			Net Impact			Interest Income  Recorded in  Interest Income			MTM Gain (Loss) Recorded  in Noninterest  Income			Net Impact
(Dollars in thousands)
Commercial loan customer interest rate swap position	$	(1,468	)	$	(1,594	)	$	(3,062	)	$	(1,462	)	$	6,923		$	5,461
Counterparty interest rate swap position		1,468			1,594			3,062			1,462			(6,923	)		(5,461	)
Total	$	-		$	-		$	-		$	-		$	-		$	-

	For The Nine Months Ended September 30,
	2016									2015
	Interest Income  Recorded in  Interest Income			MTM Gain (Loss) Recorded  in Noninterest  Income			Net Impact			Interest Income  Recorded in  Interest Income			MTM Gain (Loss) Recorded  in Noninterest  Income			Net Impact
(Dollars in thousands)
Commercial loan customer interest rate swap position	$	(4,281	)	$	13,388		$	9,107		$	(3,799	)	$	6,148		$	2,349
Counterparty interest rate swap position		4,281			(13,388	)		(9,107	)		3,799			(6,148	)		(2,349	)
Total	$	-		$	-		$	-		$	-		$	-		$	-

Mortgage Banking Derivatives

Certain derivative instruments, primarily forward sales of mortgage loans and mortgage-backed securities (“MBS”) are utilized by the Company in its efforts to manage risk of loss associated with its mortgage loan commitments and mortgage loans held for sale. Prior to closing and funding certain single-family residential mortgage loans, an interest-rate lock commitment is generally extended to the borrower. During the period from commitment date to closing date, the Company is subject to the risk that market rates of interest may change. If market rates rise, investors generally will pay less to purchase such loans resulting in a reduction in the gain on sale of the loans or, possibly, a loss. In an effort to mitigate such risk, forward delivery sales commitments, under which the Company agrees to deliver whole mortgage loans to various investors or issue MBS, are established. At September 30, 2016, the notional amount of outstanding rate locks totaled approximately $37.7 million. The notional amount of outstanding commitments to sell residential mortgage loans totaled approximately $38.5 million, which included mandatory forward commitments totaling approximately $31.4 million at September 30, 2016. The forward commitments establish the price to be received upon the sale of the related mortgage loan, thereby mitigating certain interest rate risk. There is, however, still certain execution risk specifically related to the Company’s ability to close and deliver to its investors the mortgage loans it has committed to sell.

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Offsetting of Financial Assets and Liabilities

9 Months Ended

Sep. 30, 2016

Offsetting Of Financial Assets And Liabilities [Abstract]

Offsetting of Financial Assets and Liabilities

12. Offsetting of Financial Assets and Liabilities

The following tables present the remaining contractual maturities of the Company’s repurchase agreement borrowings and repurchase liabilities as of September 30, 2016 and December 31, 2015, disaggregated by the class of collateral pledged.

	September 30, 2016								December 31, 2015
	Remaining Contractual Maturity of the Agreements								Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight  and  Continuous		Up to One  Year		One Year to  Three Years		Total		Overnight  and  Continuous		Up to One  Year		One Year to  Three Years		Total
Repurchase agreement borrowings
U.S. Government agency obligations	$	-	$	-	$	6,000	$	6,000	$	-	$	-	$	6,000	$	6,000
Government sponsored residential mortgage-backed securities		-		-		4,500		4,500		-		-		4,500		4,500
Total repurchase agreement borrowings		-		-		10,500		10,500		-		-		10,500		10,500
Repurchase liabilities
U.S. Government agency obligations		35,036		-		-		35,036		35,769		-		-		35,769
Total repurchase liabilities		35,036		-		-		35,036		35,769		-		-		35,769
Total	$	35,036	$	-	$	10,500	$	45,536	$	35,769	$	-	$	10,500	$	46,269

The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreements should the Company be in default (e.g., fail to make an interest payment to the counterparty). The collateral is held by a third party financial institution in the Company's trustee account. The counterparty has the right to sell or repledge the investment securities if the Company defaults. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional securities. The Company closely monitors collateral levels to ensure adequate levels are maintained, while mitigating the potential risk of over-collateralization in the event of counterparty default.

The following tables present the potential effect of rights of setoff associated with the Company’s recognized financial assets and liabilities at September 30, 2016 and December 31, 2015:

	September 30, 2016
							Gross Amounts Not Offset in the Statement of  Financial Condition
	Gross Amount  of Recognized  Assets		Gross Amounts  Offset in the  Statement of  Financial Condition		Net Amounts of  Assets Presented in  the Statement of Financial Condition		Financial  Instruments		Securities  Collateral  Received		Cash  Collateral  Received		Net  Amount
(Dollars in thousands)
Interest rate swap derivatives	$	23,952	$	-	$	23,952	$	-	$	-	$	23,952	$	-
Total	$	23,952	$	-	$	23,952	$	-	$	-	$	23,952	$	-
	September 30, 2016
							Gross Amounts Not Offset in the Statement of  Financial Condition
	Gross Amount  of Recognized  Liabilities		Gross Amounts  Offset in the  Statement of  Financial Condition		Net Amounts of  Liabilities Presented in  the Statement of  Financial Condition		Financial  Instruments		Securities  Collateral  Pledged		Cash  Collateral  Pledged		Net  Amount
(Dollars in thousands)
Interest rate swap derivatives	$	24,246	$	-	$	24,246	$	-	$	-	$	24,246	$	-
Repurchase agreement borrowings		10,500		-		10,500		-		10,500		-		-
Total	$	34,746	$	-	$	34,746	$	-	$	10,500	$	24,246	$	-
	December 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Condition
	Gross Amount  of Recognized  Assets		Gross Amounts  Offset in the  Statement of  Financial Condition		Net Amounts of  Assets Presented in  the Statement of  Financial Condition		Financial  Instruments		Securities  Collateral  Received		Cash  Collateral  Received		Net  Amount
(Dollars in thousands)
Interest rate swap derivatives	$	10,564	$	-	$	10,564	$	-	$	-	$	10,564	$	-
Total	$	10,564	$	-	$	10,564	$	-	$	-	$	10,564	$	-
	December 31, 2015
							Gross Amounts Not Offset in the Statement of  Financial Condition
	Gross Amount  of Recognized  Liabilities		Gross Amounts  Offset in the  Statement of  Financial Condition		Net Amounts of  Liabilities Presented in  the Statement of  Financial Condition		Financial  Instruments		Securities  Collateral  Pledged		Cash  Collateral  Pledged		Net  Amount
(Dollars in thousands)
Interest rate swap derivatives	$	10,677	$	-	$	10,677	$	-	$	-	$	10,677	$	-
Repurchase agreement borrowings		10,500		-		10,500		-		10,500		-		-
Total	$	21,177	$	-	$	21,177	$	-	$	10,500	$	10,677	$	-

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Financial Instruments with Off-Balance Sheet Risk

9 Months Ended

Sep. 30, 2016

Financial Instruments With Off Balance Sheet Risk Disclosure [Abstract]

Financial Instruments with Off-Balance Sheet Risk

13. Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and unused lines of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated Statements of Financial Condition. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Financial instruments whose contract amounts represent credit risk are as follows:

	September 30,		December 31,
	2016		2015
(Dollars in thousands)
Approved loan commitments	$	73,531	$	46,144
Unadvanced portion of construction loans		63,581		44,457
Unused lines for home equity loans		193,845		204,983
Unused revolving lines of credit		68		365
Unused commercial letters of credit		3,970		3,558
Unused commercial lines of credit		221,373		187,819
	$	556,368	$	487,326

Financial instruments with off-balance sheet risk had a valuation allowance of $86,000 and $501,000 as of September 30, 2016 and December 31, 2015, respectively.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company upon extension of credit is based on management’s credit evaluation of the counterparty. Collateral held is primarily residential property and commercial assets.

At September 30, 2016 and December 31, 2015, the Company had no off-balance sheet special purpose entities and participated in no securitizations of assets.

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Significant Group Concentrations of Credit Risk

9 Months Ended

Sep. 30, 2016

Risks and Uncertainties [Abstract]

Significant Group Concentrations of Credit Risk

14. Significant Group Concentrations of Credit Risk

The Company primarily grants commercial, residential and consumer loans to customers located within its primary market area in the state of Connecticut and western Massachusetts. The majority of the Company’s loan portfolio is comprised of commercial and residential mortgages. The Company has no negative amortization or option adjustable rate mortgage loans.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

15. Fair Value Measurements

Fair value estimates are made as of a specific point in time based on the characteristics of the financial instruments and relevant market information. In accordance with FASB ASC 820-10, the fair value estimates are measured within the fair value hierarchy. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820-10 are described as follows:

· Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

· Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability;

· Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. When available, quoted market prices are used. In other cases, fair values are based on estimates using present value or other valuation techniques. These techniques involve uncertainties and are significantly affected by the assumptions used and judgments made regarding risk characteristics of various financial instruments, discount rates, and estimates of future cash flows, future expected loss experience and other factors. Changes in assumptions could significantly affect these estimates. Derived fair value estimates cannot be substantiated by comparison to independent markets and, in certain cases, could not be realized in an immediate sale of the instrument.

Fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not financial instruments. Accordingly, the aggregate fair value amounts presented do not purport to represent the underlying market value of the Company. There were no transfers between levels during the nine months ended September 30, 2016 and 2015.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following is a description of the valuation methodologies used for instruments measured at fair value:

Securities Available-for-Sale: Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models. Level 1 securities are those traded on active markets for identical securities including U.S. treasury obligations, preferred equity securities and marketable equity securities. Level 2 securities include U.S. treasury obligations, U.S. government agency obligations, government-sponsored residential mortgage-backed securities, corporate debt securities, trust preferred debt securities, and mutual funds. When a market is illiquid or there is a lack of transparency around the inputs to valuation, the respective securities are classified as level 3 and reliance is placed upon internally developed models and management judgment and evaluation for valuation. The Company had no Level 3 securities at September 30, 2016 and December 31, 2015.

The Company utilizes a third party, nationally-recognized pricing service (“pricing service”); subject to review by management, to estimate fair value measurements for the majority of its investment securities portfolio. The pricing service evaluates each asset class based on relevant market information considering observable data that may include dealer quotes, reported trades, market spreads, cash flows, the U.S. Treasury yield curve, the LIBOR swap yield curve, trade execution data, market prepayment speeds, credit information and the bond’s terms and conditions, among other things. The fair value prices on all investment securities are reviewed for reasonableness by management. Also, management assessed the valuation techniques used by the pricing service based on a review of their pricing methodology to ensure proper pricing and hierarchy classifications. Management employs procedures to monitor the pricing service’s assumptions and establishes processes to challenge the pricing service’s valuations that appear unusual or unexpected.

Interest Rate Swap Derivatives: The fair values of interest rate swap agreements are calculated using a discounted cash flow approach and utilize observable inputs such as the LIBOR swap curve, effective date, maturity date, notional amount, stated interest rate and are classified within Level 2 of the valuation hierarchy. Such derivatives are basic interest rate swaps that do not have any embedded interest rate caps and floors.

Forward loan sale commitments and derivative loan commitments: Forward loan sale commitments and derivative loan commitments are based on fair values of the underlying mortgage loans and the probability of such commitments being exercised. Significant management judgment and estimation is required in determining these fair value measurements therefore are classified within Level 3 of the valuation hierarchy. The Company recognized a gain of $146,000 and $52,000 for the nine months ended September 30, 2016 and 2015, respectively, included in other noninterest income in the accompanying Consolidated Statements of Income.

The following tables detail the financial instruments carried at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:

	September 30, 2016
			Quoted Prices in  Active Markets for  Identical Assets		Significant  Observable  Inputs		Significant  Unobservable  Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
U.S. Treasury obligations	$	20,089	$	3,000	$	17,089	$	-
U.S. Government agency obligations		103,119		-		103,119		-
Government sponsored residential mortgage-backed securities		3,934		-		3,934		-
Corporate debt securities		1,024		-		1,024		-
Preferred equity securities		1,868		1,868		-		-
Marketable equity securities		167		167		-		-
Mutual funds		3,893		-		3,893		-
Securities available-for-sale		134,094		5,035		129,059		-
Interest rate swap derivative		23,952		-		23,952		-
Derivative loan commitments		510		-		-		510
Total	$	158,556	$	5,035	$	153,011	$	510
Liabilities
Interest rate swap derivative	$	24,246	$	-	$	24,246	$	-
Forward loan sales commitments		227		-		-		227
Total	$	24,473	$	-	$	24,246	$	227
	December 31, 2015
			Quoted Prices in  Active Markets for  Identical Assets		Significant  Observable  Inputs		Significant  Unobservable  Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
U.S. Treasury obligations	$	38,859	$	21,996	$	16,863	$	-
U.S. Government agency obligations		81,805		-		81,805		-
Government sponsored residential mortgage-backed securities		5,153		-		5,153		-
Corporate debt securities		1,048		-		1,048		-
Preferred equity securities		1,632		1,632		-		-
Marketable equity securities		160		160		-		-
Mutual funds		3,767		-		3,767		-
Securities available-for-sale		132,424		23,788		108,636		-
Interest rate swap derivative		10,564		-		10,564		-
Derivative loan commitments		207		-		-		207
Total	$	143,195	$	23,788	$	119,200	$	207
Liabilities
Interest rate swap derivative	$	10,677	$	-	$	10,677	$	-
Forward loan sales commitments		70		-		-		70
Total	$	10,747	$	-	$	10,677	$	70

The following table presents additional information about assets measured at fair value for which the Company has utilized Level 3 inputs.

	Derivative and Forward Loan Sales Commitments, Net
	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2016		2015			2016		2015
(Dollars in thousands)
Balance, at beginning of period	$	177	$	140		$	137	$	14
Total realized gain (loss): Included in earnings		106		(74	)		146		52
Balance, at the end of period	$	283	$	66		$	283	$	66

The following tables present the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015:

September 30, 2016
				Significant
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Input
Derivative and forward loan sales  commitments, net	$	283	Adjusted quoted prices in active markets	Embedded servicing value		1.01	%
December 31, 2015
				Significant
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Input
Derivative and forward loan sales  commitments, net	$	137	Adjusted quoted prices in active markets	Embedded servicing value		1.28	%

The embedded servicing value represents the value assigned for mortgage servicing rights and based on management’s judgment. When the embedded servicing value increases or decreases there is a direct correlation with fair value.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a non-recurring basis in accordance with generally accepted accounting principles. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period as well as assets that are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

The following table details the financial instruments carried at fair value on a nonrecurring basis at September 30, 2016 and December 31, 2015 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:

	September 30, 2016						December 31, 2015
	Quoted Prices in		Significant		Significant		Quoted Prices in		Significant		Significant
	Active Markets for		Observable		Unobservable		Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
(Dollars in thousands)
Impaired loans	$	-	$	-	$	1,990	$	-	$	-	$	4,225
Mortgage servicing rights		-		-		4,401		-		-		-
Other real estate owned		-		-		-		-		-		279

The following is a description of the valuation methodologies used for instruments measured on a non-recurring basis:

Mortgage Servicing Rights: A mortgage servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans are expected to more than adequately compensate the Company for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Mortgage servicing rights impairment totaling $283,000 and $-0- for the nine months ended September 30, 2016 and 2015, respectively, is included as a component of other noninterest income in the accompanying Consolidated Statements of Income. As such, measurement at fair value is on a nonrecurring basis. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

Loans Held for Sale: Loans held for sale are accounted for at the lower of cost or market and are considered to be recognized at fair value when recorded at below cost. The fair value of loans held for sale is based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted as required for changes in loan characteristics.

Impaired Loans: Impaired loans for which repayment of the loan is expected to be provided solely by the value of the underlying collateral are considered collateral dependent and are valued based on the estimated fair value of such collateral using Level 3 inputs based on customized discounting criteria. As appraisals on impaired loans are not necessarily completed on the period end dates presented in the table above, the fair value information presented may not reflect the actual fair value as of September 30, 2016 and December 31, 2015.

Other Real Estate Owned: The Company classifies property acquired through foreclosure or acceptance of deed-in-lieu of foreclosure as other real estate owned in its financial statements. Upon foreclosure, the property securing the loan is written down to fair value less selling costs. The write down is based upon the difference between the appraised value and the book value. Appraisals are based on observable market data such as comparable sales within the real estate market, however assumptions made in determining comparability are unobservable and therefore these assets are classified as Level 3 within the valuation hierarchy. As appraisals on foreclosed real estate are not necessarily completed on the period end dates presented in the table above, the fair value information presented may not reflect the actual fair value as of December 31, 2015.

The following tables present the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at September 30, 2016 and December 31, 2015:

September 30, 2016
				Significant		Weighted
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs	Average Inputs
Impaired loans	$	1,990	Appraisals	Discount for dated appraisal	5% - 20%		12.50	%
				Discount for costs to sell	8% - 15%		11.50	%
Mortgage servicing rights	$	4,401	Discounted Cash Flows	Prepayment speeds	7.46% - 20.72%		14.04	%
				Discount rate	n/a		9.00	%
December 31, 2015
				Significant		Weighted
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs	Average Inputs
Impaired loans	$	4,225	Appraisals	Discount for dated appraisal	5% - 20%		12.50	%
				Discount for costs to sell	8% - 15%		11.50	%
Other real estate owned	$	279	Appraisals	Discount for costs to sell	8% - 15%		11.50	%
				Discount for condition	10% - 30%		20.00	%

Disclosures about Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:

Cash and cash equivalents: The carrying amounts reported in the statement of condition for cash and cash equivalents approximate those assets’ fair values.

Investment in Federal Home Loan Bank of Boston (“FHLBB”) stock: FHLBB stock does not have a readily determinable fair value and is assumed to have a fair value equal to its carrying value. Ownership of FHLBB stock is restricted to the FHLBB, and can only be purchased and redeemed at par value.

Alternative Investments: The Company accounts for its percentage ownership of alternative investment funds at cost, subject to impairment testing. These are non-public investments which include limited partnerships, an equity fund and membership stocks. These alternative investments totaled $2.3 million at September 30, 2016 and December 31, 2015. The Company recognized a $219,000 and $144,000 other-than-temporary impairment charge on its limited partnerships for the nine months ended September 30, 2016 and 2015, respectively, included in other noninterest income in the accompanying Consolidated Statements of Income. The Company recognized profit distributions in its limited partnerships of $179,000 and $26,000 for the nine months ended September 30, 2016 and 2015, respectively. The Company has $619,000 in unfunded commitments remaining for its alternative investments as of September 30, 2016.

Loans: In general, discount rates used to calculate values for loan products were based on the Company’s pricing at the respective period end and included appropriate adjustments for expected credit losses. A higher discount rate was assumed with respect to estimated cash flows associated with nonaccrual loans. Projected loan cash flows were adjusted for estimated credit losses. However, such estimates made by the Company may not be indicative of assumptions and adjustments that a purchaser of the Company’s loans would seek.

Deposits: The fair values disclosed for demand deposits and savings accounts (e.g., interest and noninterest checking and passbook savings) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts for variable-rate, fixed-term certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregate expected monthly maturities of time deposits.

Borrowed funds: The fair values for borrowed funds, including FHLBB advances and repurchase borrowings, are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rate for similar types of agreements.

Repurchase liabilities: Repurchase liabilities represent a short-term customer sweep account product. Because of the short-term nature of these liabilities, the carrying amount approximates its fair value.

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2016 and December 31, 2015. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. 

		September 30, 2016				December 31, 2015
				Estimated				Estimated
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy Level	Amount		Value		Amount		Value
(Dollars in thousands)
Financial assets
Securities held-to-maturity	Level 2	$	7,338	$	7,619	$	32,246	$	32,357
Securities available-for-sale	See previous table		134,094		134,094		132,424		132,424
Loans	Level 3		2,476,364		2,469,126		2,361,796		2,336,293
Loans held-for-sale	Level 2		5,462		5,574		9,637		9,686
Mortgage servicing rights	Level 3		4,401		4,401		4,406		5,029
Federal Home Loan Bank of Boston stock	Level 2		15,139		15,139		21,729		21,729
Alternative investments	Level 3		2,327		2,335		2,508		2,409
Interest rate swap derivatives	Level 2		23,952		23,952		10,564		10,564
Derivative loan commitments	Level 3		510		510		207		207
Financial liabilities
Deposits other than time deposits	Level 1		1,770,704		1,770,704		1,550,568		1,550,568
Time deposits	Level 2		477,169		481,334		440,790		444,803
Federal Home Loan Bank of Boston advances	Level 2		220,600		222,666		377,600		376,626
Repurchase agreement borrowings	Level 2		10,500		10,651		10,500		10,539
Repurchase liabilities	Level 2		35,036		35,031		35,769		35,765
Interest rate swap derivatives	Level 2		24,246		24,246		10,677		10,677
Forward loan sales commitments	Level 3		227		227		70		70

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Regulatory Matters

9 Months Ended

Sep. 30, 2016

Regulatory Matters Disclosure [Abstract]

Regulatory Matters

16. Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on their financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classifications are also subject to quantitative judgments by the regulators about components, risk weightings and other factors.

In July 2013, the Federal Reserve published final rules for the adoption of the Basel III regulatory capital framework (the "Basel III Capital Rules"). The Basel III Capital Rules, among other things, (i) introduced a new capital measure called "Common Equity Tier 1", (ii) specify that Tier 1 capital consists of Common Equity Tier 1 and "Additional Tier 1 Capital" instruments meeting specified requirements, (iii) define Common Equity Tier 1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to Common Equity Tier 1 and not to the other components of capital and (iv) expand the scope of the deductions/adjustments as compared to existing regulations and a higher minimum Tier I capital requirement. Additionally, institutions must maintain a capital conservation buffer of common equity Tier 1 capital in an amount greater than 2.5% of total risk-weighted assets to avoid being subject to limitations on capital distributions and discretionary bonus payments to executive officers. The Basel III Capital Rules became effective for the Company beginning on January 1, 2015 with certain transition provisions fully phased in through January 1, 2019.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier I capital and common equity Tier I capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations) and of Tier I capital (as defined in the regulations) to average assets (as defined in the regulations).

Management believes, as of September 30, 2016 and December 31, 2015 that the Company and the Bank meet all capital adequacy requirements to which they are subject. The Federal Deposit Insurance Corporation categorizes the Company and the Bank as well capitalized under the regulatory framework for prompt corrective action as of September 30, 2016. To be categorized as well capitalized, the Company and the Bank must maintain minimum total risk-based, Tier I risk-based, common equity Tier I capital and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the institution’s category.

The following table provides information on the capital amounts and ratios for the Company and the Bank:

						Minimum Required  for Capital Adequacy					To Be Well  Capitalized Under  Prompt Corrective
	Actual					Purposes					Action
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Farmington Bank:
At September 30, 2016
Total Capital (to Risk Weighted Assets)	$	249,304		11.07	%	$	180,118		8.00	%	$	225,148		10.00	%
Tier I Capital (to Risk Weighted Assets)		227,955		10.12			135,088		6.00			180,118		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		227,955		10.12			101,316		4.50			146,346		6.50
Tier I Leverage Capital (to Average Assets)		227,955		8.19			111,397		4.00			139,247		5.00
At December 31, 2015
Total Capital (to Risk Weighted Assets)	$	236,486		11.16	%	$	169,524		8.00	%	$	211,905		10.00	%
Tier I Capital (to Risk Weighted Assets)		215,787		10.18			127,183		6.00			169,577		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		215,787		10.18			95,387		4.50			137,781		6.50
Tier I Leverage Capital (to Average Assets)		215,787		8.03			107,490		4.00			134,363		5.00
First Connecticut Bancorp, Inc.:
At September 30, 2016
Total Capital (to Risk Weighted Assets)	$	283,164		12.57	%	$	180,196		8.00	%	$	225,245		10.00	%
Tier I Capital (to Risk Weighted Assets)		261,815		11.62			135,147		6.00			180,195		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		261,815		11.62			101,360		4.50			146,409		6.50
Tier I Leverage Capital (to Average Assets)		261,815		9.40			111,438		4.00			139,297		5.00
At December 31, 2015
Total Capital (to Risk Weighted Assets)	$	273,255		12.88	%	$	169,724		8.00	%	$	212,155		10.00	%
Tier I Capital (to Risk Weighted Assets)		252,556		11.91			127,232		6.00			169,643		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		252,556		11.91			95,424		4.50			137,835		6.50
Tier I Leverage Capital (to Average Assets)		252,556		9.39			107,585		4.00			134,481		5.00

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Other Comprehensive Income

9 Months Ended

Sep. 30, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Other Comprehensive Income

17. Other Comprehensive Income

The following tables present the changes in accumulated other comprehensive loss, net of tax by component:

	For the Three Months Ended September 30, 2016
	Investment  Securities  Available-for-Sale			Employee Benefit  Plans			Accumulated  Other  Comprehensive  (Loss) Income
(Dollars in thousands)
Balance at June 30, 2016	$	247		$	(6,702	)	$	(6,455	)
Other comprehensive income during the period		5			-			5
Amount reclassified from accumulated other comprehensive income, net of tax		-			106			106
Net change		5			106			111
Balance at September 30, 2016	$	252		$	(6,596	)	$	(6,344	)
	For the Three Months Ended September 30, 2015
	Investment  Securities  Available-for-Sale			Employee Benefit Plans			Accumulated  Other  Comprehensive  (Loss) Income
(Dollars in thousands)
Balance at June 30, 2015	$	105		$	(7,433	)	$	(7,328	)
Other comprehensive income during the period		67			-			67
Amount reclassified from accumulated other comprehensive income, net of tax		-			110			110
Net change		67			110			177
Balance at September 30, 2015	$	172		$	(7,323	)	$	(7,151	)
	For the Nine Months Ended September 30, 2016
	Investment  Securities  Available-for-Sale			Employee Benefit Plans			Accumulated  Other  Comprehensive  (Loss) Income
(Dollars in thousands)
Balance at December 31, 2015	$	(249	)	$	(6,913	)	$	(7,162	)
Other comprehensive income during the period		501			-			501
Amount reclassified from accumulated other comprehensive income, net of tax		-			317			317
Net change		501			317			818
Balance at September 30, 2016	$	252		$	(6,596	)	$	(6,344	)
	For the Nine Months Ended September 30, 2015
	Investment  Securities  Available-for-Sale			Employee Benefit Plans			Accumulated  Other  Comprehensive  (Loss) Income
(Dollars in thousands)
Balance at December 31, 2014	$	1,046		$	(7,557	)	$	(6,511	)
Other comprehensive loss during the period Amount reclassified from accumulated		(1,861	)		-			(1,861	)
other comprehensive income, net of tax		987			234			1,221
Net change		(874	)		234			(640	)
Balance at September 30, 2015	$	172		$	(7,323	)	$	(7,151	)

The following tables present a reconciliation of the changes in components of other comprehensive income (loss) for the three and nine months ended September 30, 2016 and 2015, including the amount of income tax expense allocated to each component of other comprehensive income (loss):

	For the Three Months Ended September 30, 2016
	Pre Tax  Amount			Tax Benefit  (Expense)			After Tax  Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	8		$	(3	)	$	5
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		8			(3	)		5
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		164			(58	)		106
Total other comprehensive income	$	172		$	(61	)	$	111
	For the Three Months Ended September 30, 2015
	Pre Tax  Amount			Tax Benefit  (Expense)			After Tax  Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	103		$	(36	)	$	67
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		103			(36	)		67
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		170			(60	)		110
Total other comprehensive income	$	273		$	(96	)	$	177
	For the Nine Months Ended September 30, 2016
	Pre Tax  Amount			Tax Benefit  (Expense)			After Tax  Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	776		$	(275	)	$	501
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		776			(275	)		501
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		491			(174	)		317
Total other comprehensive income	$	1,267		$	(449	)	$	818
	For the Nine Months Ended September 30, 2015
	Pre Tax  Amount			Tax Benefit  (Expense)			After Tax  Amount
(Dollars in thousands)
Unrealized losses on available-for-sale securities	$	(2,872	)	$	1,011		$	(1,861	)
Less: net security gains reclassified into other noninterest income		1,523			(536	)		987
Net change in fair value of securities available-for-sale		(1,349	)		475			(874	)
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		361			(127	)		234
Total other comprehensive loss	$	(988	)	$	348		$	(640	)

(1) Amounts are included in salaries and employee benefits in the unaudited Consolidated Statements of Income.

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Legal Actions

9 Months Ended

Sep. 30, 2016

Loss Contingency [Abstract]

Legal Actions

18. Legal Actions

The Company and its subsidiary are involved in various legal proceedings which have arisen in the normal course of business. The Company believes the resolution of these legal actions is not expected to have a material adverse effect on the Company’s consolidated financial statements.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Financial Statement Presentation

Basis of Financial Statement Presentation

The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The Company has condensed or omitted certain information and footnote disclosures normally included in the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. All significant intercompany transactions and balances have been eliminated in consolidation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2015 included in the Company’s 10-K filed on March 11, 2016. The results of operations for the interim periods are not necessarily indicative of the results for the full year.

In preparing the consolidated financial statements, management is required to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of condition and revenues and expenses for the interim period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, investment security other-than-temporary impairment judgments and investment security valuation.

Investment Securities

Investment Securities

Marketable equity and debt securities are classified as either trading, available-for-sale, or held-to-maturity (applies only to debt securities). Management determines the appropriate classifications of securities at the time of purchase. At September 30, 2016 and December 31, 2015, the Company had no debt or equity securities classified as trading. Held-to-maturity securities are debt securities for which the Company has the ability and intent to hold until maturity. All other securities not included in held-to-maturity are classified as available-for-sale. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts on debt securities are amortized or accreted into interest income over the term of the securities using the level yield method. Available-for-sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported in accumulated other comprehensive income, a separate component of equity, until realized. Further information relating to the fair value of securities can be found within Note 4 of the Notes to Consolidated Financial Statements. In accordance with Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 320 — “Debt and Equity Securities”, a decline in market value of a debt security below amortized cost that is deemed other-than-temporary is charged to earnings for the credit related other-than-temporary impairment ("OTTI"), resulting in the establishment of a new cost basis for the security, while the non-credit related OTTI is recognized in other comprehensive income if there is no intent or requirement to sell the security. The securities portfolio is reviewed on a quarterly basis for the presence of other-than-temporary impairment. If an equity security is deemed other-than-temporarily impaired, the full impairment is considered to be credit-related and a charge to earnings would be recorded. Gains and losses on sales of securities are recognized at the time of sale on a specific identification basis.

Loans Held for Sale

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the lower of amortized cost or fair value, as determined by aggregate outstanding commitments from investors or current investor yield requirements. Net unrealized losses, if any, are recognized through a valuation allowance by charges to other noninterest income in the accompanying Consolidated Statements of Income. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold on the trade date to net gain on loans sold in the accompanying Consolidated Statements of Income.

Loans

Loans

The Company’s loan portfolio segments include residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity lines of credit, demand, revolving credit and resort. Construction includes classes for commercial and residential construction.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. When loans are prepaid, sold or participated out, the unamortized portion is recognized as income or expense at that time.

Interest on loans is accrued and recognized in interest income based on contractual rates applied to principal amounts outstanding. Accrual of interest is discontinued, and previously accrued income is reversed, when loan payments are more than 90 days past due or when, in the judgment of management, collectability of the loan or loan interest becomes uncertain. Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within a reasonable period and there is a sustained period of repayment performance (generally a minimum of six months) by the borrower, in accordance with contractual terms involving payment of cash or cash equivalents. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. If a residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort loan is on non-accrual status cash payments are applied towards the reduction of principal.  If loans are considered impaired but accruing, cash payments are applied first to interest income and then as a reduction of principal as specified in the contractual agreement, unless the collection of the remaining principal amount due is considered doubtful.

The policy for determining past due or delinquency status for all loan portfolio segments is based on the number of days past due or the contractual terms of the loan. A loan is considered delinquent when the customer does not make their payments due according to their contractual terms. Generally, a loan can be demanded at any time if the loan is delinquent or if the borrower fails to meet any other agreed upon terms and conditions.

On a quarterly basis, our loan policy requires that we evaluate for impairment all commercial real estate, construction, commercial and resort loan segments that are classified as non-accrual, loans secured by real property in foreclosure or are otherwise likely to be impaired, non-accruing residential and installment loan segments greater than $100,000 and all troubled debt restructurings.

Nonperforming loans consist of non-accruing loans, non-accruing loans identified as trouble debt restructurings and loans past due more than 90 days and still accruing interest.

Allowance for Loan Losses

Allowance for Loan Losses

The allowance for loan losses is maintained at a level believed adequate by management to absorb potential losses inherent in the loan portfolio as of the statement of condition date. The allowance for loan losses consists of a formula allowance following FASB ASC 450 — “Contingencies” and FASB ASC 310 — “Receivables”. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a quarterly basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, allocated and unallocated components, as further described below. All reserves are available to cover any losses regardless of how they are allocated.

General component:

The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the following loan segments: residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort. Construction loans include classes for commercial investment real estate construction, commercial owner occupied construction, residential development, residential subdivision construction and residential owner occupied construction loans. Management uses a rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies and nonaccrual loans; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no material changes in the Company’s policies or methodology pertaining to the general component of the allowance for loan losses during the nine months ended September 30, 2016.

The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows:

Residential real estate — Residential real estate loans are generally originated in amounts up to 95.0% of the lesser of the appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio in excess of 80.0%. The Company does not grant subprime loans. All loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. All residential mortgage loans are underwritten pursuant to secondary market underwriting guidelines which include minimum FICO standards. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Commercial real estate — Loans in this segment are primarily originated to finance income-producing properties throughout the northeastern states. The underlying cash flows generated by the properties may be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, may have an effect on the credit quality in this segment. Management generally obtains rent rolls and other financial information, as appropriate on an annual basis and continually monitors the cash flows of these loans.

Construction loans — Loans in this segment include commercial construction loans, real estate subdivision development loans to developers, licensed contractors and builders for the construction and development of commercial real estate projects and residential properties. Construction lending contains a unique risk characteristic as loans are originated under market and economic conditions that may change between the time of origination and the completion and subsequent purchaser financing of the property. In addition, construction subdivision loans and commercial and residential construction loans to contractors and developers entail additional risks as compared to single-family residential mortgage lending to owner-occupants. These loans typically involve large loan balances concentrated in single borrowers or groups of related borrowers. Real estate subdivision development loans to developers, licensed contractors and builders are generally speculative real estate development loans for which payment is derived from sale of the property. Credit risk may be affected by cost overruns, time to sell at an adequate price, and market conditions. Construction financing is generally considered to involve a higher degree of credit risk than longer-term financing on improved, owner-occupied real estate. Residential construction credit quality may be impacted by the overall health of the economy, including unemployment rates and housing prices.

Commercial — Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Home equity line of credit — Loans in this segment include home equity loans and lines of credit underwritten with a loan-to-value ratio generally limited to no more than 80%, including any first mortgage. Our home equity lines of credit have ten-year terms and adjustable rates of interest which are indexed to the prime rate. The overall health of the economy, including unemployment rates and housing prices, may have an effect on the credit quality in this segment.

Installment, Collateral, Demand, Revolving Credit and Resort – Loans in these segments include loans principally to customers residing in our primary market area with acceptable credit ratings. Our installment and collateral consumer loans generally consist of loans on new and used automobiles, loans collateralized by deposit accounts and unsecured personal loans. The overall health of the economy, including unemployment rates and housing prices, may have an effect on the credit quality in this segment. Excluding collateral loans which are fully collateralized by a deposit account, repayment for loans in these segments is dependent on the credit quality of the individual borrower. The resort portfolio consists of a direct receivable loan outside the Northeast which is amortizing to its contractual obligations. The Company has exited the resort financing market with a residual portfolio remaining.

Allocated component:

The allocated component relates to loans that are classified as impaired. Impairment is measured on a loan by loan basis for commercial real estate, construction, commercial and resort loans by the present value of expected cash flows discounted at the effective interest rate; the fair value of the collateral, if applicable; or the observable market price for the loan. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan is lower than the carrying value of that loan. The Company does not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement or they are nonaccrual loans with outstanding balances greater than $100,000.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Management updates the analysis quarterly. The assumptions used in appraisals are reviewed for appropriateness. Updated appraisals or valuations are obtained as needed or adjusted to reflect the estimated decline in the fair value based upon current market conditions for comparable properties.

The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring ("TDR"). All TDRs are classified as impaired.

Unallocated component:

An unallocated component is maintained, when needed, to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. The Company’s Loan Policy allows management to utilize a high and low range of 0.0% to 5.0% of our total allowance for loan losses when establishing an unallocated allowance, when considered necessary. The unallocated allowance is used to provide for an unidentified loss that may exist in emerging problem loans that cannot be fully quantified or may be affected by conditions not fully understood as of the balance sheet date. There was no unallocated allowance at September 30, 2016 and December 31, 2015.

Troubled Debt Restructuring

Troubled Debt Restructuring

A loan is considered a troubled debt restructuring (“TDR”) when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower in modifying or renewing the loan the Company would not otherwise consider. In connection with troubled debt restructurings, terms may be modified to fit the ability of the borrower to repay in line with their current financial status, which may include a reduction in the interest rate to market rate or below, a change in the term or movement of past due amounts to the back-end of the loan or refinancing. A loan is placed on non-accrual status upon being restructured, even if it was not previously, unless the modified loan was current for the six months prior to its modification and we believe the loan is fully collectable in accordance with its new terms. The Company’s policy to restore a restructured loan to performing status is dependent on the receipt of regular payments, generally for a period of six months and one calendar year-end. All troubled debt restructurings are classified as impaired loans and are reviewed for impairment by management on a quarterly basis per Company policy.

Foreclosed Real Estate

Foreclosed Real Estate

Real estate acquired through foreclosure comprises properties acquired in partial or total satisfaction of problem loans. The properties are acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. At the time these properties are foreclosed, the properties are initially recorded at the fair value at the date of foreclosure less estimated selling costs. Losses arising at the time of acquisition of such properties are charged against the allowance for loan losses. Subsequent loss provisions are charged to the foreclosed real estate valuation allowance and expenses incurred to maintain the properties are charged to noninterest expense. Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and a charge to operations is recorded as necessary to reduce the carrying amount to fair value less estimated costs to dispose. Revenue and expense from the operation of other real estate owned and the provision to establish and adjust valuation allowances are included in noninterest expenses. Costs relating to the development and improvement of the property are capitalized, subject to the limit of fair value of the collateral. In the Consolidated Statements of Financial Condition, total prepaid expenses and other assets include foreclosed real estate of $-0- and $279,000 as of September 30, 2016 and December 31, 2015, with no specific valuation allowance. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction totaled $4.5 million at September 30, 2016.

Pension and Other Postretirement Benefit Plans

Pension and Other Postretirement Benefit Plans

The Company’s non-contributory defined-benefit pension plan and certain defined benefit postretirement plans were frozen as of February 28, 2013 and no additional benefits will accrue.

The Company has a non-contributory defined benefit pension plan that provides benefits for substantially all employees hired before January 1, 2007 who meet certain requirements as to age and length of service. The benefits are based on years of service and average compensation, as defined in the Plan Document. The Company’s funding practice is to meet the minimum funding standards established by the Employee Retirement Income Security Act of 1974.

In addition to providing pension benefits, we provide certain health care and life insurance benefits for retired employees. Participants or eligible employees hired before January 1, 1993 become eligible for the benefits if they retire after reaching age 62 with fifteen or more years of service. A fixed percent of annual costs are paid depending on length of service at retirement. The Company accrues for the estimated costs of these other post-retirement benefits through charges to expense during the years that employees render service. The Company makes contributions to cover the current benefits paid under this plan. The Company believes the policy for determining pension and other post-retirement benefit expenses is critical because judgments are required with respect to the appropriate discount rate, rate of return on assets and other items. The Company reviews and updates the assumptions annually. If the Company’s estimate of pension and post-retirement expense is too low it may experience higher expenses in the future, reducing its net income. If the Company’s estimate is too high, it may experience lower expenses in the future, increasing its net income.

Income Taxes

Income Taxes

Deferred income taxes are provided for differences arising in the timing of income and expenses for financial reporting and for income tax purposes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides a deferred tax asset valuation allowance for the estimated future tax effects attributable to temporary differences and carryforwards when realization is determined not to be more likely than not.

FASB ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Pursuant to FASB ASC 740-10, the Company examines its financial statements, its income tax provision and its federal and state income tax returns and analyzes its tax positions, including permanent and temporary differences, as well as the major components of income and expense to determine whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties arising from income tax settlements as part of its provision for income taxes.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 provides guidance in accounting principles generally accepted in the United States of America about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company does not expect ASU 2014-15 to have a significant impact on its financial statements.

In August 2015, the FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers (Topic 606)." In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), with an original effective date for annual reporting periods beginning after December 15, 2016. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2015-14 deferred the effective date of ASU 2014-09 to annual periods and interim periods within those annual periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. Early application is not permitted. The Company is assessing the impact of ASU 2015-14 on its accounting and disclosures.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments — Overall (Topic 825-10): "Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends the guidance on the classification and measurement of financial instruments. Some of the amendments in ASU 2016-01 include the following: 1) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and 4) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value; among others. For public business entities, the amendments of ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is assessing the impact of ASU 2016-01 on its accounting and disclosures.

In February 2016, the FASB issued ASU No. 2016-02 "Leases (Topic 842)." ASU 2016-02 supersedes Topic 840, Leases. This ASU is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Some of the provisions in ASU 2016-02 include the following: 1) requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease), 2) requires lessor accounting to be updated to align with certain changes to the lessee model and the new revenue recognition standard, 3) an arrangement contains an embedded lease if property, plant, or equipment is explicitly or implicitly identified and its use is controlled by the customer, 4) in certain circumstances, the lessee is required to remeasure the lease payments, and 5) requires extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing contracts. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is assessing the impact of ASU 2016-02 on its accounting and disclosures.

In March 2016, the FASB issued ASU No. 2016-07 "Investments — Equity Method and Joint Ventures (Topic 323) Simplifying the Transition to the Equity Method of Accounting." This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. For public business entities, ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The Company is assessing the impact of ASU 2016-07 on its accounting and disclosures.

In March 2016, the FASB issued ASU No. 2016-09 “Compensation — Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” This ASU requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election for forfeitures as they occur. For public business entities, ASU No. 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is assessing the impact of ASU 2016-09 on its accounting and disclosures.

In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments — Credit Losses (Topic 326)" requires an entity to utilize a new impairment model known as the current expected credit loss ("CECL") model to estimate its lifetime "expected credit loss" and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This ASU also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. ASU 2016-13 is effective for public business entities for annual periods beginning after December 13, 2019, including interim periods within those fiscal years. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is assessing the impact of ASU 2016-13 on its accounting and disclosures.

In August 2016, the FASB issued ASU No. 2016-15 “Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides cash flow statement classification guidance for certain transactions including how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company is assessing the impact of ASU 2016-15 its accounting and disclosures.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Schedule of calculation of basic and diluted earnings per common share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands, except per share data):
Net income	$	3,773		$	4,215		$	11,029		$	10,198
Less:  Dividends to participating shares		-			(8	)		(18	)		(33	)
Income allocated to participating shares		(15	)		(63	)		(58	)		(127	)
Net income allocated to common stockholders	$	3,758		$	4,144		$	10,953		$	10,038
Weighted-average shares issued		17,968,628			17,998,820			17,974,118			18,003,666
Less:  Average unallocated ESOP shares		(897,948	)		(993,416	)		(921,630	)		(1,017,019	)
Average treasury stock		(2,156,167	)		(2,084,182	)		(2,167,900	)		(2,031,904	)
Average unvested restricted stock		(90,599	)		(288,271	)		(114,306	)		(247,835	)
Weighted-average basic shares outstanding		14,823,914			14,632,951			14,770,282			14,706,908
Plus: Average dilutive shares		368,092			254,510			322,827			176,454
Weighted-average diluted shares outstanding		15,192,006			14,887,461			15,093,109			14,883,362
Net earnings per share(1):
Basic	$	0.25		$	0.28		$	0.74		$	0.68
Diluted	$	0.25		$	0.28		$	0.73		$	0.67

(1)  Certain per share amounts may not appear to reconcile due to rounding.

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Schedule of investment securities

	September 30, 2016
			Recognized in OCI							Not Recognized in OCI
			Gross		Gross					Gross		Gross
	Amortized		Unrealized		Unrealized			Carrying		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses			Value		Gains		Losses		Value
Available-for-sale
Debt securities:
U.S. Treasury obligations	$	19,814	$	275	$	-		$	20,089	$	-	$	-	$	20,089
U.S. Government agency obligations		102,986		168		(35	)		103,119		-		-		103,119
Government sponsored residential mortgage-backed securities		3,751		183		-			3,934		-		-		3,934
Corporate debt securities		1,000		24		-			1,024		-		-		1,024
Preferred equity securities		2,000		-		(132	)		1,868		-		-		1,868
Marketable equity securities		108		61		(2	)		167		-		-		167
Mutual funds		4,042		-		(149	)		3,893		-		-		3,893
Total securities available-for-sale	$	133,701	$	711	$	(318	)	$	134,094	$	-	$	-	$	134,094
Held-to-maturity
Government sponsored residential mortgage-backed securities	$	7,338	$	-	$	-		$	7,338	$	281	$	-	$	7,619
Total securities held-to-maturity	$	7,338	$	-	$	-		$	7,338	$	281	$	-	$	7,619

	December 31, 2015
			Recognized in OCI							Not Recognized in OCI
			Gross		Gross					Gross		Gross
	Amortized		Unrealized		Unrealized			Carrying		Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost		Gains		Losses			Value		Gains		Losses			Value
Available-for-sale
Debt securities:
U.S. Treasury obligations	$	38,782	$	83	$	(6	)	$	38,859	$	-	$	-		$	38,859
U.S. Government agency obligations		82,002		43		(240	)		81,805		-		-			81,805
Government sponsored residential mortgage-backed securities		4,958		195		-			5,153		-		-			5,153
Corporate debt securities		1,000		48		-			1,048		-		-			1,048
Preferred equity securities		2,000		-		(368	)		1,632		-		-			1,632
Marketable equity securities		108		54		(2	)		160		-		-			160
Mutual funds		3,957		-		(190	)		3,767		-		-			3,767
Total securities available-for-sale	$	132,807	$	423	$	(806	)	$	132,424	$	-	$	-		$	132,424
Held-to-maturity
U.S. Government agency obligations	$	24,000	$	-	$	-		$	24,000	$	28	$	(20	)	$	24,008
Government sponsored residential mortgage-backed securities		8,246		-		-			8,246		103		-			8,349
Total securities held-to-maturity	$	32,246	$	-	$	-		$	32,246	$	131	$	(20	)	$	32,357

Schedule of gross unrealized losses and fair value aggregated by investment category

	September 30, 2016
			Less than 12 Months					12 Months or More					Total
					Gross					Gross					Gross
	Number of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Securities		Value		Loss			Value		Loss			Value		Loss
Available-for-sale:
U.S. Government agency obligations		3	$	26,965	$	(35	)	$	-	$	-		$	26,965	$	(35	)
Preferred equity securities		1		-		-			1,868		(132	)		1,868		(132	)
Marketable equity securities		1		-		-			5		(2	)		5		(2	)
Mutual funds		1		-		-			3,893		(149	)		3,893		(149	)
Total investment securities in an unrealized loss position		6	$	26,965	$	(35	)	$	5,766	$	(283	)	$	32,731	$	(318	)

	December 31, 2015
			Less than 12 Months					12 Months or More					Total
					Gross					Gross					Gross
	Number of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Securities		Value		Loss			Value		Loss			Value		Loss
Available-for-sale:
U.S. Treasury obligations		4	$	19,935	$	(6	)	$	-	$	-		$	19,935	$	(6	)
U.S. Government agency obligations		7		56,762		(240	)		-		-			56,762		(240	)
Preferred equity securities		1		-		-			1,632		(368	)		1,632		(368	)
Marketable equity securities		1		-		-			5		(2	)		5		(2	)
Mutual funds		1		-		-			2,768		(190	)		2,768		(190	)
		14	$	76,697	$	(246	)	$	4,405	$	(560	)	$	81,102	$	(806	)
Held-to-maturity
U.S. Government agency obligations		1	$	6,980	$	(20	)	$	-	$	-		$	6,980	$	(20	)
		1		6,980		(20	)		-		-			6,980		(20	)
Total investment securities in an unrealized loss position		15	$	83,677	$	(266	)	$	4,405	$	(560	)	$	88,082	$	(826	)

Schedule of amortized cost and estimated market value of debt securities by contractual maturity

	September 30, 2016
	Available-for-Sale				Held-to-Maturity
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(Dollars in thousands)
Due in one year or less	$	42,485	$	42,494	$	-	$	-
Due after one year through five years		81,315		81,738		-		-
Due after five years through ten years		-		-		-		-
Due after ten years		-		-		-		-
Government sponsored residential mortgage-backed securities		3,751		3,934		7,338		7,619
	$	127,551	$	128,166	$	7,338	$	7,619

	December 31, 2015
	Available-for-Sale				Held-to-Maturity
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(Dollars in thousands)
Due in one year or less	$	54,499	$	54,511	$	-	$	-
Due after one year through five years		67,285		67,201		24,000		24,008
Due after five years through ten years		-		-		-		-
Due after ten years		-		-		-		-
Government sponsored residential mortgage-backed securities		4,958		5,153		8,246		8,349
	$	126,742	$	126,865	$	32,246	$	32,357

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Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Schedule of loans

	September 30,			December 31,
	2016			2015
(Dollars in thousands)
Real estate:
Residential	$	864,054		$	849,722
Commercial		931,703			887,431
Construction		50,083			30,895
Installment		3,211			2,970
Commercial		449,008			409,550
Collateral		1,621			1,668
Home equity line of credit		172,148			174,701
Revolving credit		82			91
Resort		512			784
Total loans		2,472,422			2,357,812
Net deferred loan costs		3,942			3,984
Loans		2,476,364			2,361,796
Allowance for loan losses		(21,263	)		(20,198	)
Loans, net	$	2,455,101		$	2,341,598

Schedule of changes in the allowance for loan losses by segments

	For the Three Months Ended September 30, 2016
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses		Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	3,744	$	(57	)	$	-	$	157	$	3,844
Commercial		10,489		-			-		151		10,640
Construction		327		-			-		102		429
Installment		39		(2	)		-		1		38
Commercial		4,630		(28	)		-		177		4,779
Collateral		-		-			-		-		-
Home equity line of credit		1,491		(13	)		-		55		1,533
Revolving credit		-		(62	)		7		55		-
Resort		-		-			-		-		-
	$	20,720	$	(162	)	$	7	$	698	$	21,263

	For the Three Months Ended September 30, 2015
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,452	$	(2	)	$	95	$	(432	)	$	4,113
Commercial		9,001		-			-		464			9,465
Construction		361		-			-		(135	)		226
Installment		36		-			-		(2	)		34
Commercial		3,745		(4	)		6		348			4,095
Collateral		-		-			-		-			-
Home equity line of credit		1,986		-			-		91			2,077
Revolving credit		-		(58	)		6		52			-
Resort		-		-			-		-			-
	$	19,581	$	(64	)	$	107	$	386		$	20,010

	For the Nine Months Ended September 30, 2016
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,084	$	(81	)	$	1	$	(160	)	$	3,844
Commercial		10,255		-			-		385			10,640
Construction		231		-			-		198			429
Installment		39		(3	)		-		2			38
Commercial		4,119		(370	)		10		1,020			4,779
Collateral		-		(10	)		-		10			-
Home equity line of credit		1,470		(13	)		-		76			1,533
Revolving credit		-		(209	)		24		185			-
Resort		-		-			-		-			-
	$	20,198	$	(686	)	$	35	$	1,716		$	21,263

	For the Nine Months Ended September 30, 2015
	Balance at beginning of period		Charge-offs			Recoveries		Provision for (Reduction of) loan losses			Balance at end of period
(Dollars in thousands)
Real estate:
Residential	$	4,382	$	(195	)	$	111	$	(185	)	$	4,113
Commercial		8,949		(213	)		-		729			9,465
Construction		478		-			-		(252	)		226
Installment		41		(3	)		-		(4	)		34
Commercial		3,250		(24	)		6		863			4,095
Collateral		-		-			-		-			-
Home equity line of credit		1,859		(138	)		-		356			2,077
Revolving credit		-		(179	)		21		158			-
Resort		1		-			-		(1	)		-
	$	18,960	$	(752	)	$	138	$	1,664		$	20,010

Schedule of the allowance by impairment methodology and by loan segment

	September 30, 2016				December 31, 2015
(Dollars in thousands)	Total		Reserve Allocation		Total		Reserve Allocation
Loans individually evaluated for impairment:
Real estate:
Residential	$	12,577	$	141	$	12,377	$	139
Commercial		15,089		19		16,152		26
Construction		4,719		-		4,719		-
Installment		230		7		259		8
Commercial		2,604		297		6,023		361
Collateral		-		-		-		-
Home equity line of credit		1,867		-		703		-
Revolving credit		-		-		-		-
Resort		512		-		784		-
		37,598		464		41,017		534
Loans collectively evaluated for impairment:
Real estate:
Residential	$	856,224	$	3,703	$	841,921	$	3,945
Commercial		915,861		10,621		870,757		10,229
Construction		45,364		429		26,176		231
Installment		2,974		31		2,695		31
Commercial		446,359		4,482		403,473		3,758
Collateral		1,621		-		1,668		-
Home equity line of credit		170,281		1,533		173,998		1,470
Revolving credit		82		-		91		-
Resort		-		-		-		-
		2,438,766		20,799		2,320,779		19,664
Total	$	2,476,364	$	21,263	$	2,361,796	$	20,198

Schedule of loan delinquencies at recorded investment values

	September 30, 2016
	30-59 Days				60-89 Days				> 90 Days								Past Due 90 Days or More
(Dollars in thousands)	Past Due				Past Due				Past Due				Total				and Still
	Number		Amount		Number		Amount		Number		Amount		Number		Amount		Accruing
Real estate:
Residential		12	$	2,476		12	$	1,445		16	$	7,382		40	$	11,303	$	-
Commercial		-		-		-		-		1		914		1		914		-
Construction		-		-		1		4,532		1		187		2		4,719		-
Installment		-		-		1		24		-		-		1		24		-
Commercial		2		45		1		64		2		458		5		567		-
Collateral		4		32		-		-		-		-		4		32		-
Home equity line of credit		3		317		-		-		2		327		5		644		-
Demand		1		35		-		-		-		-		1		35		-
Revolving credit		-		-		-		-		-		-		-		-		-
Resort		-		-		-		-		-		-		-		-		-
Total		22	$	2,905		15	$	6,065		22	$	9,268		59	$	18,238	$	-

	December 31, 2015
	30-59 Days				60-89 Days				> 90 Days								Past Due 90 Days or More
(Dollars in thousands)	Past Due				Past Due				Past Due				Total				and Still
	Number		Amount		Number		Amount		Number		Amount		Number		Amount		Accruing
Real estate:
Residential		18	$	3,379		5	$	863		15	$	6,304		38	$	10,546	$	-
Commercial		2		318		-		-		1		994		3		1,312		-
Construction		-		-		-		-		1		187		1		187		-
Installment		3		38		-		-		-		-		3		38		-
Commercial		4		153		-		-		2		1,752		6		1,905		-
Collateral		7		68		-		-		1		10		8		78		-
Home equity line of credit		3		280		2		360		2		210		7		850		-
Demand		1		29		-		-		-		-		1		29		-
Revolving credit		-		-		-		-		-		-		-		-		-
Resort		-		-		-		-		-		-		-		-		-
Total		38	$	4,265		7	$	1,223		22	$	9,457		67	$	14,945	$	-

Schedule of nonperforming assets

	September 30,		December 31,
(Dollars in thousands)	2016		2015
Nonaccrual loans:
Real estate:
Residential	$	9,575	$	9,773
Commercial		1,008		1,106
Construction		4,719		187
Installment		24		32
Commercial		1,677		3,232
Collateral		11		10
Home equity line of credit		815		573
Revolving credit		-		-
Resort		-		-
Total nonaccruing loans		17,829		14,913
Loans 90 days past due and still accruing		-		-
Other real estate owned		-		279
Total nonperforming assets	$	17,829	$	15,192

Schedule of summary of information pertaining to impaired loans

	September 30, 2016						December 31, 2015
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans without a valuation allowance:
Real estate:
Residential	$	11,616	$	13,168	$	-	$	11,530	$	12,878	$	-
Commercial		12,208		12,336		-		13,233		13,303		-
Construction		4,719		4,964		-		4,719		4,965		-
Installment		205		222		-		202		202		-
Commercial		2,029		2,255		-		3,921		4,066		-
Collateral		-		-		-		-		-		-
Home equity line of credit		1,867		1,910		-		703		719		-
Revolving credit		-		-		-		-		-		-
Resort		512		512		-		784		784		-
Total		33,156		35,367		-		35,092		36,917		-
Impaired loans with a valuation allowance:
Real estate:
Residential		961		980		141		847		881		139
Commercial		2,881		2,881		19		2,919		2,919		26
Construction		-		-		-		-		-		-
Installment		25		25		7		57		72		8
Commercial		575		1,267		297		2,102		2,457		361
Collateral		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-
Revolving credit		-		-		-		-		-		-
Resort		-		-		-		-		-		-
Total		4,442		5,153		464		5,925		6,329		534
Total impaired loans	$	37,598	$	40,520	$	464	$	41,017	$	43,246	$	534

Schedule of average recorded investment and interest income recognized on impaired loans

			Three Months		Nine Months				Three Months		Nine Months
			Ended		Ended				Ended		Ended
	September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	2016		2016		2016		2015		2015		2015
	Average		Interest		Interest		Average		Interest		Interest
	Recorded		Income		Income		Recorded		Income		Income
(Dollars in thousands)	Investment		Recognized		Recognized		Investment		Recognized		Recognized
Impaired loans without a valuation allowance:
Real estate:
Residential	$	11,394	$	22	$	71	$	9,204	$	25	$	78
Commercial		12,850		125		396		13,817		144		433
Construction		4,719		-		69		4,719		35		103
Installment		211		3		9		243		3		11
Commercial		2,552		8		27		4,083		27		82
Collateral		-		-		-		-		-		-
Home equity line of credit		1,417		9		18		1,010		2		3
Revolving Credit		-		-		-		-		-		-
Resort		648		5		17		841		5		20
Total		33,791		172		607		33,917		241		730
Impaired loans with a valuation allowance:
Real estate:
Residential		876		8		33		2,308		9		27
Commercial		2,900		35		105		4,086		36		122
Construction		-		-		-		-		-		-
Installment		33		-		1		29		-		-
Commercial		1,256		1		3		1,694		3		13
Collateral		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-
Revolving Credit		-		-		-		-		-		-
Resort		-		-		-		-		-		-
Total		5,065		44		142		8,117		48		162
Total impaired loans	$	38,856	$	216	$	749	$	42,034	$	289	$	892

Schedule of loans terms modified in a troubled debt restructuring

	September 30, 2016
	TDRs on Accrual Status				TDRs on Nonaccrual Status				Total TDRs
(Dollars in thousands)	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Real estate:
Residential		14	$	2,549		9	$	4,691		23	$	7,240
Commercial		3		5,972		-		-		3		5,972
Construction		-		-		2		4,719		2		4,719
Installment		4		206		1		24		5		230
Commercial		3		600		8		1,220		11		1,820
Collateral		-		-		-		-		-		-
Home equity line of credit		8		1,076		1		58		9		1,134
Revolving credit		-		-		-		-		-		-
Resort		1		512		-		-		1		512
Total		33	$	10,915		21	$	10,712		54	$	21,627

	December 31, 2015
	TDRs on Accrual Status				TDRs on Nonaccrual Status				Total TDRs
(Dollars in thousands)	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Real estate:
Residential		14	$	2,242		11	$	5,557		25	$	7,799
Commercial		4		6,664		-		-		4		6,664
Construction		1		4,532		1		187		2		4,719
Installment		4		227		2		32		6		259
Commercial		6		2,350		8		1,482		14		3,832
Collateral		-		-		-		-		-		-
Home equity line of credit		3		153		-		-		3		153
Revolving credit		-		-		-		-		-		-
Resort		1		784		-		-		1		784
Total		33	$	16,952		22	$	7,258		55	$	24,210

Schedule of recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured

	For the Three Months Ended September 30, 2016						For the Nine Months Ended September 30, 2016
(Dollars in thousands)	Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)		Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)
Troubled Debt Restructurings:
Real estate
Residential		1	$	231	$	231		1	$	231	$	231
Commercial		1		117		117		1		117		117
Home equity line of credit		-		-		-		6		985		982
Total		2	$	348	$	348	$	8	$	1,333	$	1,330

	For the Three Months Ended September 30, 2015						For the Nine Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)		Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification(1)
Troubled Debt Restructurings:
Real estate
Residential		2	$	507	$	507		8	$	1,549	$	1,536
Commercial		-		-		-		1		493		487
Installment		-		-		-		1		44		41
Commercial		-		-		-		3		133		129
Home equity line of credit		-		-		-		3		153		153
Total		2	$	507	$	507		16	$	2,372	$	2,346

(1)  The period end balances are inclusive of all partial paydowns and charge-offs since the modification date.  TDRs fully paid off, charged-off or foreclosed upon by period end are not included.

Schedule of TDR loans modified by means of extended maturity, below market adjusted interest rates, a combination of rate and maturity, or by other means including covenant modifications, forbearance concessions

	For the Three Months Ended September 30, 2016
(Dollars in thousands)	Number of  Modifications		Extended  Maturity		Adjusted  Interest  Rates		Combination  of Rate and  Maturity		Other		Total
Real estate
Residential		1	$	-	$	-	$	-	$	231	$	231
Commercial		1		117		-		-		-		117
Total		2	$	117	$	-	$	-	$	231	$	348

	For the Nine Months Ended September 30, 2016
(Dollars in thousands)	Number of  Modifications		Extended  Maturity		Adjusted  Interest  Rates		Combination  of Rate and  Maturity		Other		Total
Real estate
Residential		1	$	-	$	-	$	-	$	231	$	231
Commercial		1		117		-		-		-		117
Home equity line of credit		6		-		-		-		982		982
Total		8	$	117	$	-	$	-	$	1,213	$	1,330

	For the Three Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Extended Maturity		Adjusted Interest Rates		Combination of Rate and Maturity		Other		Total
Real estate
Residential		2	$	-	$	-	$	-	$	507	$	507
Total		2	$	-	$	-	$	-	$	507	$	507

	For the Nine Months Ended September 30, 2015
(Dollars in thousands)	Number of Modifications		Extended Maturity		Adjusted Interest Rates		Combination of Rate and Maturity		Other		Total
Real estate
Residential		8	$	-	$	-	$	-	$	1,536	$	1,536
Commercial		1		-		-		-		487		487
Installment		1		-		-		-		41		41
Commercial		3		-		-		34		95		129
Home equity line of credit		3		-		-		-		153		153
Total		16	$	-	$	-	$	34	$	2,312	$	2,346

Schedule of loans modified as a TDR

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2015				September 30, 2015
(Dollars in thousands)	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(1)
Real estate
Residential		1	$	319		1	$	319
Installment		1		33		1		33
Total		2	$	352		2	$	352

(1) The period end balances are inclusive of all partial paydowns and charge-offs since the modification date. TDRs fully paid off, charged-off or foreclosed upon by period end are not included.

Schedule of loans by risk rating

	September 30, 2016
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Real estate:
Residential	$	853,388	$	762	$	9,904	$	-	$	864,054
Commercial		917,459		4,610		9,634		-		931,703
Construction		45,364		-		4,719		-		50,083
Installment		3,161		26		24		-		3,211
Commercial		429,921		5,772		13,198		117		449,008
Collateral		1,610		-		11		-		1,621
Home equity line of credit		171,105		39		1,004		-		172,148
Revolving credit		82		-		-		-		82
Resort		512		-		-		-		512
Total Loans	$	2,422,602	$	11,209	$	38,494	$	117	$	2,472,422

	December 31, 2015
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Real estate:
Residential	$	838,314	$	1,154	$	10,254	$	-	$	849,722
Commercial		867,531		10,861		9,039		-		887,431
Construction		26,176		-		4,719		-		30,895
Installment		2,886		52		32		-		2,970
Commercial		390,719		10,354		8,311		166		409,550
Collateral		1,647		-		21		-		1,668
Home equity line of credit		173,879		229		593		-		174,701
Revolving credit		91		-		-		-		91
Resort		784		-		-		-		784
Total Loans	$	2,302,027	$	22,650	$	32,969	$	166	$	2,357,812

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Deposits (Tables)

9 Months Ended

Sep. 30, 2016

Banking and Thrift [Abstract]

Schedule of deposit

	September 30,		December 31,
	2016		2015
(Dollars in thousands)
Noninterest-bearing demand deposits	$	419,664	$	401,388
Interest-bearing
NOW accounts		590,213		468,054
Money market		536,979		460,737
Savings accounts		223,848		220,389
Time deposits		477,169		440,790
Total interest-bearing deposits		1,828,209		1,589,970
Total deposits	$	2,247,873	$	1,991,358

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Pension and Other Postretirement Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of components of net periodic pension and benefit costs

	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands)
Service cost	$	-		$	-		$	14		$	14
Interest cost		264			259			30			30
Expected return on plan assets		(279	)		(362	)		-			-
Amortization:		-						-
Loss		176			178			-			3
Prior service cost		-			-			(13	)		(13	)
Net periodic benefit cost	$	161		$	75		$	31		$	34

	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(Dollars in thousands)
Service cost	$	-		$	-		$	42		$	43
Interest cost		789			777			90			91
Expected return on plan assets		(835	)		(1,086	)		-			-
Amortization:								-
Loss		528			532			-			9
Prior service cost		-			-			(38	)		(38	)
Net periodic benefit cost	$	482		$	223		$	94		$	105

Schedule of shares held by the ESOP

Allocated	476,805
Committed to be released	71,391
Unallocated	882,220
	1,430,416

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Stock Incentive Plan (Tables)

9 Months Ended

Sep. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of weighted-average assumptions

	2016			2015
Weighted per share average fair value of options granted	$	3.00		$	3.33
Weighted-average assumptions:
Risk-free interest rate		1.53	%		1.61	%
Expected volatility		22.88	%		24.96	%
Expected dividend yield		2.13	%		1.99	%
Weighted-average dividend yield		1.91 - 2.25	%		1.50% - 2.35	%
Expected life of options granted		6.0 years			6.0 years

Schedule of summary of the company's stock option activity and related information for its option grants

	Number of Stock Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2015		1,656,157		$	13.11
Granted		9,000			16.52
Exercised		(110,131	)		13.00
Forfeited		(2,700	)		14.59
Expired		-			-
Outstanding at September 30, 2016		1,552,326		$	13.14		6.06	$	7,218
Exercisable at September 30, 2016		1,503,176		$	13.05		5.99	$	7,128

Schedule of summary of the status of the company's restricted stock

	Number of Restricted Stock			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2015		126,290		$	12.95
Granted		-			-
Vested		(126,290	)		12.95
Forfeited		-			-
Unvested at September 30, 2016		-		$	-

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of interest rate swaps that were not designated for hedge accounting

		September 30, 2016							December 31, 2015
(Dollars in thousands)	Consolidated Balance Sheet Location	# of Instruments		Notional Amount		Estimated Fair Values			# of Instruments		Notional Amount		Estimated Fair Values
Commercial loan customer interest rate swap position	Other Assets		81	$	371,691	$	23,952			60	$	257,693	$	10,564
Commercial loan customer interest rate swap position	Other Liabilities		-		-		-			6		23,411		(78	)
Counterparty interest rate swap position	Other Liabilities		81		371,691		(24,246	)		66		281,104		(10,599	)

Schedule of changes in the fair value of non-hedge accounting derivatives

	For The Three Months Ended September 30,
	2016									2015
	Interest Income  Recorded in  Interest Income			MTM Gain (Loss) Recorded  in Noninterest  Income			Net Impact			Interest Income  Recorded in  Interest Income			MTM Gain (Loss) Recorded  in Noninterest  Income			Net Impact
(Dollars in thousands)
Commercial loan customer interest rate swap position	$	(1,468	)	$	(1,594	)	$	(3,062	)	$	(1,462	)	$	6,923		$	5,461
Counterparty interest rate swap position		1,468			1,594			3,062			1,462			(6,923	)		(5,461	)
Total	$	-		$	-		$	-		$	-		$	-		$	-

	For The Nine Months Ended September 30,
	2016									2015
	Interest Income  Recorded in  Interest Income			MTM Gain (Loss) Recorded  in Noninterest  Income			Net Impact			Interest Income  Recorded in  Interest Income			MTM Gain (Loss) Recorded  in Noninterest  Income			Net Impact
(Dollars in thousands)
Commercial loan customer interest rate swap position	$	(4,281	)	$	13,388		$	9,107		$	(3,799	)	$	6,148		$	2,349
Counterparty interest rate swap position		4,281			(13,388	)		(9,107	)		3,799			(6,148	)		(2,349	)
Total	$	-		$	-		$	-		$	-		$	-		$	-

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Offsetting of Financial Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Offsetting Of Financial Assets And Liabilities [Abstract]

Schedule of remaining contractual maturities of repurchase agreement borrowings and repurchase liabilities

	September 30, 2016								December 31, 2015
	Remaining Contractual Maturity of the Agreements								Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight  and  Continuous		Up to One  Year		One Year to  Three Years		Total		Overnight  and  Continuous		Up to One  Year		One Year to  Three Years		Total
Repurchase agreement borrowings
U.S. Government agency obligations	$	-	$	-	$	6,000	$	6,000	$	-	$	-	$	6,000	$	6,000
Government sponsored residential mortgage-backed securities		-		-		4,500		4,500		-		-		4,500		4,500
Total repurchase agreement borrowings		-		-		10,500		10,500		-		-		10,500		10,500
Repurchase liabilities
U.S. Government agency obligations		35,036		-		-		35,036		35,769		-		-		35,769
Total repurchase liabilities		35,036		-		-		35,036		35,769		-		-		35,769
Total	$	35,036	$	-	$	10,500	$	45,536	$	35,769	$	-	$	10,500	$	46,269

Schedule of potential effect of rights of setoff associated with recognized financial assets and liabilities

	September 30, 2016
							Gross Amounts Not Offset in the Statement of  Financial Condition
	Gross Amount  of Recognized  Assets		Gross Amounts  Offset in the  Statement of  Financial Condition		Net Amounts of  Assets Presented in  the Statement of Financial Condition		Financial  Instruments		Securities  Collateral  Received		Cash  Collateral  Received		Net  Amount
(Dollars in thousands)
Interest rate swap derivatives	$	23,952	$	-	$	23,952	$	-	$	-	$	23,952	$	-
Total	$	23,952	$	-	$	23,952	$	-	$	-	$	23,952	$	-
	September 30, 2016
							Gross Amounts Not Offset in the Statement of  Financial Condition
	Gross Amount  of Recognized  Liabilities		Gross Amounts  Offset in the  Statement of  Financial Condition		Net Amounts of  Liabilities Presented in  the Statement of  Financial Condition		Financial  Instruments		Securities  Collateral  Pledged		Cash  Collateral  Pledged		Net  Amount
(Dollars in thousands)
Interest rate swap derivatives	$	24,246	$	-	$	24,246	$	-	$	-	$	24,246	$	-
Repurchase agreement borrowings		10,500		-		10,500		-		10,500		-		-
Total	$	34,746	$	-	$	34,746	$	-	$	10,500	$	24,246	$	-
	December 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Condition
	Gross Amount  of Recognized  Assets		Gross Amounts  Offset in the  Statement of  Financial Condition		Net Amounts of  Assets Presented in  the Statement of  Financial Condition		Financial  Instruments		Securities  Collateral  Received		Cash  Collateral  Received		Net  Amount
(Dollars in thousands)
Interest rate swap derivatives	$	10,564	$	-	$	10,564	$	-	$	-	$	10,564	$	-
Total	$	10,564	$	-	$	10,564	$	-	$	-	$	10,564	$	-
	December 31, 2015
							Gross Amounts Not Offset in the Statement of  Financial Condition
	Gross Amount  of Recognized  Liabilities		Gross Amounts  Offset in the  Statement of  Financial Condition		Net Amounts of  Liabilities Presented in  the Statement of  Financial Condition		Financial  Instruments		Securities  Collateral  Pledged		Cash  Collateral  Pledged		Net  Amount
(Dollars in thousands)
Interest rate swap derivatives	$	10,677	$	-	$	10,677	$	-	$	-	$	10,677	$	-
Repurchase agreement borrowings		10,500		-		10,500		-		10,500		-		-
Total	$	21,177	$	-	$	21,177	$	-	$	10,500	$	10,677	$	-

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Financial Instruments with Off-Balance Sheet Risk (Tables)

9 Months Ended

Sep. 30, 2016

Financial Instruments With Off Balance Sheet Risk Disclosure [Abstract]

Schedule of financial instruments whose contract amounts represent credit risk

	September 30,		December 31,
	2016		2015
(Dollars in thousands)
Approved loan commitments	$	73,531	$	46,144
Unadvanced portion of construction loans		63,581		44,457
Unused lines for home equity loans		193,845		204,983
Unused revolving lines of credit		68		365
Unused commercial letters of credit		3,970		3,558
Unused commercial lines of credit		221,373		187,819
	$	556,368	$	487,326

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of financial instruments carried at fair value on a recurring basis

	September 30, 2016
			Quoted Prices in  Active Markets for  Identical Assets		Significant  Observable  Inputs		Significant  Unobservable  Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
U.S. Treasury obligations	$	20,089	$	3,000	$	17,089	$	-
U.S. Government agency obligations		103,119		-		103,119		-
Government sponsored residential mortgage-backed securities		3,934		-		3,934		-
Corporate debt securities		1,024		-		1,024		-
Preferred equity securities		1,868		1,868		-		-
Marketable equity securities		167		167		-		-
Mutual funds		3,893		-		3,893		-
Securities available-for-sale		134,094		5,035		129,059		-
Interest rate swap derivative		23,952		-		23,952		-
Derivative loan commitments		510		-		-		510
Total	$	158,556	$	5,035	$	153,011	$	510
Liabilities
Interest rate swap derivative	$	24,246	$	-	$	24,246	$	-
Forward loan sales commitments		227		-		-		227
Total	$	24,473	$	-	$	24,246	$	227
	December 31, 2015
			Quoted Prices in  Active Markets for  Identical Assets		Significant  Observable  Inputs		Significant  Unobservable  Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
U.S. Treasury obligations	$	38,859	$	21,996	$	16,863	$	-
U.S. Government agency obligations		81,805		-		81,805		-
Government sponsored residential mortgage-backed securities		5,153		-		5,153		-
Corporate debt securities		1,048		-		1,048		-
Preferred equity securities		1,632		1,632		-		-
Marketable equity securities		160		160		-		-
Mutual funds		3,767		-		3,767		-
Securities available-for-sale		132,424		23,788		108,636		-
Interest rate swap derivative		10,564		-		10,564		-
Derivative loan commitments		207		-		-		207
Total	$	143,195	$	23,788	$	119,200	$	207
Liabilities
Interest rate swap derivative	$	10,677	$	-	$	10,677	$	-
Forward loan sales commitments		70		-		-		70
Total	$	10,747	$	-	$	10,677	$	70

Schedule of assets measured at fair value according to Level 3 inputs

	Derivative and Forward Loan Sales Commitments, Net
	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2016		2015			2016		2015
(Dollars in thousands)
Balance, at beginning of period	$	177	$	140		$	137	$	14
Total realized gain (loss): Included in earnings		106		(74	)		146		52
Balance, at the end of period	$	283	$	66		$	283	$	66

Schedule of valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a recurring basis

September 30, 2016
				Significant
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Input
Derivative and forward loan sales  commitments, net	$	283	Adjusted quoted prices in active markets	Embedded servicing value		1.01	%
December 31, 2015
				Significant
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Input
Derivative and forward loan sales  commitments, net	$	137	Adjusted quoted prices in active markets	Embedded servicing value		1.28	%

Schedule of financial instruments carried at fair value on a nonrecurring basis

	September 30, 2016						December 31, 2015
	Quoted Prices in		Significant		Significant		Quoted Prices in		Significant		Significant
	Active Markets for		Observable		Unobservable		Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
(Dollars in thousands)
Impaired loans	$	-	$	-	$	1,990	$	-	$	-	$	4,225
Mortgage servicing rights		-		-		4,401		-		-		-
Other real estate owned		-		-		-		-		-		279

Schedule of valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis

September 30, 2016
				Significant		Weighted
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs	Average Inputs
Impaired loans	$	1,990	Appraisals	Discount for dated appraisal	5% - 20%		12.50	%
				Discount for costs to sell	8% - 15%		11.50	%
Mortgage servicing rights	$	4,401	Discounted Cash Flows	Prepayment speeds	7.46% - 20.72%		14.04	%
				Discount rate	n/a		9.00	%
December 31, 2015
				Significant		Weighted
(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs	Average Inputs
Impaired loans	$	4,225	Appraisals	Discount for dated appraisal	5% - 20%		12.50	%
				Discount for costs to sell	8% - 15%		11.50	%
Other real estate owned	$	279	Appraisals	Discount for costs to sell	8% - 15%		11.50	%
				Discount for condition	10% - 30%		20.00	%

Schedule of carrying amount, fair value, and placement in the fair value hierarchy of the Company's financial instruments

		September 30, 2016				December 31, 2015
				Estimated				Estimated
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy Level	Amount		Value		Amount		Value
(Dollars in thousands)
Financial assets
Securities held-to-maturity	Level 2	$	7,338	$	7,619	$	32,246	$	32,357
Securities available-for-sale	See previous table		134,094		134,094		132,424		132,424
Loans	Level 3		2,476,364		2,469,126		2,361,796		2,336,293
Loans held-for-sale	Level 2		5,462		5,574		9,637		9,686
Mortgage servicing rights	Level 3		4,401		4,401		4,406		5,029
Federal Home Loan Bank of Boston stock	Level 2		15,139		15,139		21,729		21,729
Alternative investments	Level 3		2,327		2,335		2,508		2,409
Interest rate swap derivatives	Level 2		23,952		23,952		10,564		10,564
Derivative loan commitments	Level 3		510		510		207		207
Financial liabilities
Deposits other than time deposits	Level 1		1,770,704		1,770,704		1,550,568		1,550,568
Time deposits	Level 2		477,169		481,334		440,790		444,803
Federal Home Loan Bank of Boston advances	Level 2		220,600		222,666		377,600		376,626
Repurchase agreement borrowings	Level 2		10,500		10,651		10,500		10,539
Repurchase liabilities	Level 2		35,036		35,031		35,769		35,765
Interest rate swap derivatives	Level 2		24,246		24,246		10,677		10,677
Forward loan sales commitments	Level 3		227		227		70		70

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Regulatory Matters (Tables)

9 Months Ended

Sep. 30, 2016

Regulatory Matters Disclosure [Abstract]

Schedule of actual capital amounts and ratios for the Company and the Bank

						Minimum Required  for Capital Adequacy					To Be Well  Capitalized Under  Prompt Corrective
	Actual					Purposes					Action
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Farmington Bank:
At September 30, 2016
Total Capital (to Risk Weighted Assets)	$	249,304		11.07	%	$	180,118		8.00	%	$	225,148		10.00	%
Tier I Capital (to Risk Weighted Assets)		227,955		10.12			135,088		6.00			180,118		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		227,955		10.12			101,316		4.50			146,346		6.50
Tier I Leverage Capital (to Average Assets)		227,955		8.19			111,397		4.00			139,247		5.00
At December 31, 2015
Total Capital (to Risk Weighted Assets)	$	236,486		11.16	%	$	169,524		8.00	%	$	211,905		10.00	%
Tier I Capital (to Risk Weighted Assets)		215,787		10.18			127,183		6.00			169,577		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		215,787		10.18			95,387		4.50			137,781		6.50
Tier I Leverage Capital (to Average Assets)		215,787		8.03			107,490		4.00			134,363		5.00
First Connecticut Bancorp, Inc.:
At September 30, 2016
Total Capital (to Risk Weighted Assets)	$	283,164		12.57	%	$	180,196		8.00	%	$	225,245		10.00	%
Tier I Capital (to Risk Weighted Assets)		261,815		11.62			135,147		6.00			180,195		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		261,815		11.62			101,360		4.50			146,409		6.50
Tier I Leverage Capital (to Average Assets)		261,815		9.40			111,438		4.00			139,297		5.00
At December 31, 2015
Total Capital (to Risk Weighted Assets)	$	273,255		12.88	%	$	169,724		8.00	%	$	212,155		10.00	%
Tier I Capital (to Risk Weighted Assets)		252,556		11.91			127,232		6.00			169,643		8.00
Common Equity Tier I Capital (to Risk Weighted Assets)		252,556		11.91			95,424		4.50			137,835		6.50
Tier I Leverage Capital (to Average Assets)		252,556		9.39			107,585		4.00			134,481		5.00

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Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2016

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of changes in accumulated other comprehensive loss by component

	For the Three Months Ended September 30, 2016
	Investment  Securities  Available-for-Sale			Employee Benefit  Plans			Accumulated  Other  Comprehensive  (Loss) Income
(Dollars in thousands)
Balance at June 30, 2016	$	247		$	(6,702	)	$	(6,455	)
Other comprehensive income during the period		5			-			5
Amount reclassified from accumulated other comprehensive income, net of tax		-			106			106
Net change		5			106			111
Balance at September 30, 2016	$	252		$	(6,596	)	$	(6,344	)
	For the Three Months Ended September 30, 2015
	Investment  Securities  Available-for-Sale			Employee Benefit Plans			Accumulated  Other  Comprehensive  (Loss) Income
(Dollars in thousands)
Balance at June 30, 2015	$	105		$	(7,433	)	$	(7,328	)
Other comprehensive income during the period		67			-			67
Amount reclassified from accumulated other comprehensive income, net of tax		-			110			110
Net change		67			110			177
Balance at September 30, 2015	$	172		$	(7,323	)	$	(7,151	)
	For the Nine Months Ended September 30, 2016
	Investment  Securities  Available-for-Sale			Employee Benefit Plans			Accumulated  Other  Comprehensive  (Loss) Income
(Dollars in thousands)
Balance at December 31, 2015	$	(249	)	$	(6,913	)	$	(7,162	)
Other comprehensive income during the period		501			-			501
Amount reclassified from accumulated other comprehensive income, net of tax		-			317			317
Net change		501			317			818
Balance at September 30, 2016	$	252		$	(6,596	)	$	(6,344	)
	For the Nine Months Ended September 30, 2015
	Investment  Securities  Available-for-Sale			Employee Benefit Plans			Accumulated  Other  Comprehensive  (Loss) Income
(Dollars in thousands)
Balance at December 31, 2014	$	1,046		$	(7,557	)	$	(6,511	)
Other comprehensive loss during the period Amount reclassified from accumulated		(1,861	)		-			(1,861	)
other comprehensive income, net of tax		987			234			1,221
Net change		(874	)		234			(640	)
Balance at September 30, 2015	$	172		$	(7,323	)	$	(7,151	)

Schedule of reconciliation of the changes in components of other comprehensive income

	For the Three Months Ended September 30, 2016
	Pre Tax  Amount			Tax Benefit  (Expense)			After Tax  Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	8		$	(3	)	$	5
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		8			(3	)		5
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		164			(58	)		106
Total other comprehensive income	$	172		$	(61	)	$	111
	For the Three Months Ended September 30, 2015
	Pre Tax  Amount			Tax Benefit  (Expense)			After Tax  Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	103		$	(36	)	$	67
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		103			(36	)		67
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		170			(60	)		110
Total other comprehensive income	$	273		$	(96	)	$	177
	For the Nine Months Ended September 30, 2016
	Pre Tax  Amount			Tax Benefit  (Expense)			After Tax  Amount
(Dollars in thousands)
Unrealized gains on available-for-sale securities	$	776		$	(275	)	$	501
Less: net security gains reclassified into other noninterest income		-			-			-
Net change in fair value of securities available-for-sale		776			(275	)		501
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		491			(174	)		317
Total other comprehensive income	$	1,267		$	(449	)	$	818
	For the Nine Months Ended September 30, 2015
	Pre Tax  Amount			Tax Benefit  (Expense)			After Tax  Amount
(Dollars in thousands)
Unrealized losses on available-for-sale securities	$	(2,872	)	$	1,011		$	(1,861	)
Less: net security gains reclassified into other noninterest income		1,523			(536	)		987
Net change in fair value of securities available-for-sale		(1,349	)		475			(874	)
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs(1)		361			(127	)		234
Total other comprehensive loss	$	(988	)	$	348		$	(640	)

(1) Amounts are included in salaries and employee benefits in the unaudited Consolidated Statements of Income.

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Summary of Significant Accounting Policies (Detail Textuals) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($) Branch shares	Jun. 21, 2013 shares
Accounting Policies [Abstract]
Number of branch offices | Branch	24
Maximum number of shares authorized to repurchase		1,676,452
Percentage of current outstanding common stock as shares to be repurchased		10.00%
Number of shares repurchased	156,800
Value of shares repurchased | $	$ 2.5
Number of shares remaining to repurchase	600,945

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Summary of Significant Accounting Policies (Detail Textuals 1) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum limit of nonaccrual loans outstanding	$ 100,000
Foreclosed real estate included in prepaid expenses and other assets		$ 279,000
Recorded investment of consumer mortgage loans	$ 4,500,000
Defined benefit plans, general information	In addition to providing pension benefits, we provide certain health care and life insurance benefits for retired employees. Participants or eligible employees hired before January 1, 1993 become eligible for the benefits if they retire after reaching age 62 with fifteen or more years of service.
Real estate | Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Threshold percentage limit of purchase price of the property	95.00%
Maximum limit loan-to-value ratio in percentage	80.00%
Home equity line of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum limit loan-to-value ratio in percentage	80.00%
Term of line of credit	10 years
Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of unallocated allowances	0.00%
Foreclosed real estate included in prepaid expenses and other assets	$ 0
Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of unallocated allowances	5.00%

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Restrictions on Cash and Due from Banks (Detail Textuals) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Restrictions On Cash and Due From Banks [Abstract]
Cash and liquid assets required	$ 30.4	$ 17.7

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Earnings Per Share - Calculation of basic and diluted earnings per common share (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Net income		$ 3,773	$ 4,215	$ 11,029	$ 10,198
Less: Dividends to participating shares			(8)	(18)	(33)
Income allocated to participating shares		(15)	(63)	(58)	(127)
Net income allocated to common stockholders		$ 3,758	$ 4,144	$ 10,953	$ 10,038
Weighted-average shares issued		17,968,628	17,998,820	17,974,118	18,003,666
Less: Average unallocated ESOP shares		(897,948)	(993,416)	(921,630)	(1,017,019)
Average treasury stock		(2,156,167)	(2,084,182)	(2,167,900)	(2,031,904)
Average unvested restricted stock		(90,599)	(288,271)	(114,306)	(247,835)
Weighted-average basic shares outstanding		14,823,914	14,632,951	14,770,282	14,706,908
Plus: Average dilutive shares		368,092	254,510	322,827	176,454
Weighted-average diluted shares outstanding		15,192,006	14,887,461	15,093,109	14,883,362
Net earnings per share:
Basic (in dollars per share)	[1]	$ 0.25	$ 0.28	$ 0.74	$ 0.68
Diluted (in dollars per share)	[1]	$ 0.25	$ 0.28	$ 0.73	$ 0.67

[1] Certain per share amounts may not appear to reconcile due to rounding.

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Earnings Per Share (Detail Textuals) - shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of antidilutive securities excluded from earnings per share calculation	44,000	79,500

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Investment Securities - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Available-for-sale
Amortized Cost	$ 133,701	$ 132,807
Gross Unrealized Gains - Recognized in OCI	711	423
Gross Unrealized Losses - Recognized in OCI	(318)	(806)
Carrying Value	134,094	132,424
Gross Unrealized Gains - Not Recognized in OCI
Gross Unrealized Losses -Not Recognized in OCI
Fair Value	134,094	132,424
Held-to-maturity
Amortized Cost	7,338	32,246
Gross Unrealized Gains - Recognized in OCI
Gross unrealized losses - Recognized in OCI
Carrying Value	7,338	32,246
Gross Unrealized Gains - Not Recognized in OCI	281	131
Gross Unrealized Losses - Not Recognized in OCI		(20)
Fair Value	7,619	32,357
U.S. Treasury obligations
Available-for-sale
Amortized Cost	19,814	38,782
Gross Unrealized Gains - Recognized in OCI	275	83
Gross Unrealized Losses - Recognized in OCI		(6)
Carrying Value	20,089	38,859
Gross Unrealized Gains - Not Recognized in OCI
Gross Unrealized Losses -Not Recognized in OCI
Fair Value	20,089	38,859
U.S. Government agency obligations
Available-for-sale
Amortized Cost	102,986	82,002
Gross Unrealized Gains - Recognized in OCI	168	43
Gross Unrealized Losses - Recognized in OCI	(35)	(240)
Carrying Value	103,119	81,805
Gross Unrealized Gains - Not Recognized in OCI
Gross Unrealized Losses -Not Recognized in OCI
Fair Value	103,119	81,805
Held-to-maturity
Amortized Cost		24,000
Gross Unrealized Gains - Recognized in OCI
Gross unrealized losses - Recognized in OCI
Carrying Value		24,000
Gross Unrealized Gains - Not Recognized in OCI		28
Gross Unrealized Losses - Not Recognized in OCI		(20)
Fair Value		24,008
Government sponsored residential mortgage-backed securities
Available-for-sale
Amortized Cost	3,751	4,958
Gross Unrealized Gains - Recognized in OCI	183	195
Gross Unrealized Losses - Recognized in OCI
Carrying Value	3,934	5,153
Gross Unrealized Gains - Not Recognized in OCI
Gross Unrealized Losses -Not Recognized in OCI
Fair Value	3,934	5,153
Held-to-maturity
Amortized Cost	7,338	8,246
Gross Unrealized Gains - Recognized in OCI
Gross unrealized losses - Recognized in OCI
Carrying Value	7,338	8,246
Gross Unrealized Gains - Not Recognized in OCI	281	103
Gross Unrealized Losses - Not Recognized in OCI
Fair Value	7,619	8,349
Corporate debt securities
Available-for-sale
Amortized Cost	1,000	1,000
Gross Unrealized Gains - Recognized in OCI	24	48
Gross Unrealized Losses - Recognized in OCI
Carrying Value	1,024	1,048
Gross Unrealized Gains - Not Recognized in OCI
Gross Unrealized Losses -Not Recognized in OCI
Fair Value	1,024	1,048
Preferred equity securities
Available-for-sale
Amortized Cost	2,000	2,000
Gross Unrealized Gains - Recognized in OCI
Gross Unrealized Losses - Recognized in OCI	(132)	(368)
Carrying Value	1,868	1,632
Gross Unrealized Gains - Not Recognized in OCI
Gross Unrealized Losses -Not Recognized in OCI
Fair Value	1,868	1,632
Marketable equity securities
Available-for-sale
Amortized Cost	108	108
Gross Unrealized Gains - Recognized in OCI	61	54
Gross Unrealized Losses - Recognized in OCI	(2)	(2)
Carrying Value	167	160
Gross Unrealized Gains - Not Recognized in OCI
Gross Unrealized Losses -Not Recognized in OCI
Fair Value	167	160
Mutual funds
Available-for-sale
Amortized Cost	4,042	3,957
Gross Unrealized Gains - Recognized in OCI
Gross Unrealized Losses - Recognized in OCI	(149)	(190)
Carrying Value	3,893	3,767
Gross Unrealized Gains - Not Recognized in OCI
Gross Unrealized Losses -Not Recognized in OCI
Fair Value	$ 3,893	$ 3,767

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Investment Securities - Gross unrealized losses and fair value (Details 1) $ in Thousands	Sep. 30, 2016 USD ($) Security	Dec. 31, 2015 USD ($) Security
Available-for-sale:
Number of Securities | Security	6	14
Less than 12 Months, Fair Value	$ 26,965	$ 76,697
Less than 12 months, Gross Unrealized Loss	(35)	(246)
12 months or more, Fair Value	5,766	4,405
12 months or more, Gross Unrealized Loss	(283)	(560)
Total Fair Value	32,731	81,102
Total Gross Unrealized Loss	$ (318)	$ (806)
Held-to-maturity
Number of Securities | Security		1
Less than 12 months, Fair Value		$ 6,980
Less than 12 months, Gross Unrealized Loss		(20)
12 months or more, Fair Value
12 months or more, Gross Unrealized Loss
Total Fair Value		6,980
Total Gross Unrealized Loss		$ (20)
Total number of securities | Security		15
Total investment securities in an unrealized loss position less than 12 months fair value		$ 83,677
Total investment securities in an unrealized loss position less than 12 months gross unrealized loss		(266)
Total investment securities in an unrealized loss position 12 months or more fair value		4,405
Total investment securities in an unrealized loss position 12 months or more gross unrealized loss		(560)
Total investment securities in an unrealized loss position fair value		88,082
Total investment securities in an unrealized loss position gross unrealized loss		$ (826)
U.S. Treasury obligations
Available-for-sale:
Number of Securities | Security		4
Less than 12 Months, Fair Value		$ 19,935
Less than 12 months, Gross Unrealized Loss		(6)
12 months or more, Fair Value
12 months or more, Gross Unrealized Loss
Total Fair Value		19,935
Total Gross Unrealized Loss		$ (6)
U.S. Government agency obligations
Available-for-sale:
Number of Securities | Security	3	7
Less than 12 Months, Fair Value	$ 26,965	$ 56,762
Less than 12 months, Gross Unrealized Loss	(35)	(240)
12 months or more, Fair Value
12 months or more, Gross Unrealized Loss
Total Fair Value	26,965	56,762
Total Gross Unrealized Loss	$ (35)	$ (240)
Held-to-maturity
Number of Securities | Security		1
Less than 12 months, Fair Value		$ 6,980
Less than 12 months, Gross Unrealized Loss		(20)
12 months or more, Fair Value
12 months or more, Gross Unrealized Loss
Total Fair Value		6,980
Total Gross Unrealized Loss		$ (20)
Preferred equity securities
Available-for-sale:
Number of Securities | Security	1	1
Less than 12 Months, Fair Value
Less than 12 months, Gross Unrealized Loss
12 months or more, Fair Value	1,868	1,632
12 months or more, Gross Unrealized Loss	(132)	(368)
Total Fair Value	1,868	1,632
Total Gross Unrealized Loss	$ (132)	$ (368)
Marketable equity securities
Available-for-sale:
Number of Securities | Security	1	1
Less than 12 Months, Fair Value
Less than 12 months, Gross Unrealized Loss
12 months or more, Fair Value	5	5
12 months or more, Gross Unrealized Loss	(2)	(2)
Total Fair Value	5	5
Total Gross Unrealized Loss	$ (2)	$ (2)
Mutual funds
Available-for-sale:
Number of Securities | Security	1	1
Less than 12 Months, Fair Value
Less than 12 months, Gross Unrealized Loss
12 months or more, Fair Value	3,893	2,768
12 months or more, Gross Unrealized Loss	(149)	(190)
Total Fair Value	3,893	2,768
Total Gross Unrealized Loss	$ (149)	$ (190)

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Investment Securities - Amortized cost and estimated market value of debt securities (Details 2) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Available-for-Sale - Amortized Cost
Due in one year or less	$ 42,485	$ 54,499
Due after one year through five years	81,315	67,285
Due after five years through ten years
Due after ten years
Government sponsored residential mortgage-backed securities	3,751	4,958
Available-for-sale, Amortized Cost	127,551	126,742
Available-for-Sale - Estimated Fair Value
Due in one year or less	42,494	54,511
Due after one year through five years	81,738	67,201
Due after five years through ten years
Due after ten years
Government sponsored residential mortgage-backed securities	3,934	5,153
Available-for-Sale, Estimated Fair Value	128,166	126,865
Held-to-Maturity - Amortized Cost
Due in one year or less
Due after one year through five years		24,000
Due after five years through ten years
Due after ten years
Government sponsored residential mortgage-backed securities	7,338	8,246
Held-to-Maturity, Amortized Cost	7,338	32,246
Held-to-Maturity - Estimated Fair Value
Due in one year or less
Due after one year through five years		24,008
Due after five years through ten years
Due after ten years
Government sponsored residential mortgage-backed securities	7,619	8,349
Held-to-Maturity, Estimated Fair Value	$ 7,619	$ 32,357

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Investment Securities (Detail Textuals) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Gross realized gains on sales of securities available-for-sale	$ 0.0	$ 1.5
U.S. Treasury, U.S. Government agency obligations and Government sponsored residential mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Fair value of securities			$ 115.8	$ 112.4

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Investment Securities (Detail Textuals 1) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FHLB Stock	$ 15,139	$ 21,729
Federal Home Loan Bank of Boston ("FHLBB") Stock
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FHLB Stock	$ 15,100	$ 21,700

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Investment Securities (Detail Textuals 2) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Schedule Of Available For Sale Securities and Held To Maturity [Line Items]
Alternative investments	$ 2,300,000		$ 2,300,000
Amount of profit distributed in limited partnerships	179,000	$ 26,000
Unfunded commitments for alternative investments	619,000
Other noninterest income
Schedule Of Available For Sale Securities and Held To Maturity [Line Items]
Other-than-temporary impairment charge on limited partnership	219,000	$ 144,000
Other assets
Schedule Of Available For Sale Securities and Held To Maturity [Line Items]
Alternative investments	$ 2,300,000		$ 2,300,000

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Loans and Allowance for Loan Losses - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 2,472,422		$ 2,357,812
Net deferred loan costs	3,942		3,984
Loans	2,476,364		2,361,796
Allowance for loan losses	(21,263)	$ (20,720)	(20,198)	$ (20,010)	$ (19,581)	$ (18,960)
Loans, net	2,455,101		2,341,598
Real estate | Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	864,054		849,722
Allowance for loan losses	(3,844)	(3,744)	(4,084)	(4,113)	(4,452)	(4,382)
Real estate | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	931,703		887,431
Allowance for loan losses	(10,640)	(10,489)	(10,255)	(9,465)	(9,001)	(8,949)
Real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	50,083		30,895
Allowance for loan losses	(429)	(327)	(231)	(226)	(361)	(478)
Installment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	3,211		2,970
Allowance for loan losses	(38)	(39)	(39)	(34)	(36)	(41)
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	449,008		409,550
Allowance for loan losses	(4,779)	(4,630)	(4,119)	(4,095)	(3,745)	(3,250)
Collateral
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	1,621		1,668
Allowance for loan losses
Home equity line of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	172,148		174,701
Allowance for loan losses	(1,533)	(1,491)	(1,470)	(2,077)	(1,986)	(1,859)
Revolving credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	82		91
Allowance for loan losses
Resort
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	512		784
Allowance for loan losses						$ (1)

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Loans and Allowance for Loan Losses - Changes in allowance for loan losses by segments (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	$ 20,720	$ 19,581	$ 20,198	$ 18,960
Charge-offs	(162)	(64)	(686)	(752)
Recoveries	7	107	35	138
Provision for (Reduction of) loan losses	698	386	1,716	1,664
Balance at end of period	21,263	20,010	21,263	20,010
Real estate | Residential
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	3,744	4,452	4,084	4,382
Charge-offs	(57)	(2)	(81)	(195)
Recoveries		95	1	111
Provision for (Reduction of) loan losses	157	(432)	(160)	(185)
Balance at end of period	3,844	4,113	3,844	4,113
Real estate | Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	10,489	9,001	10,255	8,949
Charge-offs				(213)
Recoveries
Provision for (Reduction of) loan losses	151	464	385	729
Balance at end of period	10,640	9,465	10,640	9,465
Real estate | Construction
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	327	361	231	478
Charge-offs
Recoveries
Provision for (Reduction of) loan losses	102	(135)	198	(252)
Balance at end of period	429	226	429	226
Installment
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	39	36	39	41
Charge-offs	(2)		(3)	(3)
Recoveries
Provision for (Reduction of) loan losses	1	(2)	2	(4)
Balance at end of period	38	34	38	34
Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	4,630	3,745	4,119	3,250
Charge-offs	(28)	(4)	(370)	(24)
Recoveries		6	10	6
Provision for (Reduction of) loan losses	177	348	1,020	863
Balance at end of period	4,779	4,095	4,779	4,095
Collateral
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period
Charge-offs			(10)
Recoveries
Provision for (Reduction of) loan losses			10
Balance at end of period
Home equity line of credit
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	1,491	1,986	1,470	1,859
Charge-offs	(13)		(13)	(138)
Recoveries
Provision for (Reduction of) loan losses	55	91	76	356
Balance at end of period	1,533	2,077	1,533	2,077
Revolving credit
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period
Charge-offs	(62)	(58)	(209)	(179)
Recoveries	7	6	24	21
Provision for (Reduction of) loan losses	55	52	185	158
Balance at end of period
Resort
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period				1
Charge-offs
Recoveries
Provision for (Reduction of) loan losses				(1)
Balance at end of period

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Loans and Allowance for Loan Losses - Allocation of the allowance by impairment methodology and by loan segment (Details 2) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment	$ 37,598		$ 41,017
Reserve Allocation - Loans individually evaluated for impairment	464		534
Total - Loans collectively evaluated for impairment	2,438,766		2,320,779
Reserve Allocation - Loans collectively evaluated for impairment	20,799		19,664
Total loans	2,476,364		2,361,796
Total Reserve Allocation	21,263	$ 20,720	20,198	$ 20,010	$ 19,581	$ 18,960
Real estate | Residential
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment	12,577		12,377
Reserve Allocation - Loans individually evaluated for impairment	141		139
Total - Loans collectively evaluated for impairment	856,224		841,921
Reserve Allocation - Loans collectively evaluated for impairment	3,703		3,945
Total Reserve Allocation	3,844	3,744	4,084	4,113	4,452	4,382
Real estate | Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment	15,089		16,152
Reserve Allocation - Loans individually evaluated for impairment	19		26
Total - Loans collectively evaluated for impairment	915,861		870,757
Reserve Allocation - Loans collectively evaluated for impairment	10,621		10,229
Total Reserve Allocation	10,640	10,489	10,255	9,465	9,001	8,949
Real estate | Construction
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment	4,719		4,719
Reserve Allocation - Loans individually evaluated for impairment
Total - Loans collectively evaluated for impairment	45,364		26,176
Reserve Allocation - Loans collectively evaluated for impairment	429		231
Total Reserve Allocation	429	327	231	226	361	478
Installment
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment	230		259
Reserve Allocation - Loans individually evaluated for impairment	7		8
Total - Loans collectively evaluated for impairment	2,974		2,695
Reserve Allocation - Loans collectively evaluated for impairment	31		31
Total Reserve Allocation	38	39	39	34	36	41
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment	2,604		6,023
Reserve Allocation - Loans individually evaluated for impairment	297		361
Total - Loans collectively evaluated for impairment	446,359		403,473
Reserve Allocation - Loans collectively evaluated for impairment	4,482		3,758
Total Reserve Allocation	4,779	4,630	4,119	4,095	3,745	3,250
Collateral
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment
Reserve Allocation - Loans individually evaluated for impairment
Total - Loans collectively evaluated for impairment	1,621		1,668
Reserve Allocation - Loans collectively evaluated for impairment
Total Reserve Allocation
Home equity line of credit
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment	1,867		703
Reserve Allocation - Loans individually evaluated for impairment
Total - Loans collectively evaluated for impairment	170,281		173,998
Reserve Allocation - Loans collectively evaluated for impairment	1,533		1,470
Total Reserve Allocation	1,533	1,491	1,470	2,077	1,986	1,859
Revolving credit
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment
Reserve Allocation - Loans individually evaluated for impairment
Total - Loans collectively evaluated for impairment	82		91
Reserve Allocation - Loans collectively evaluated for impairment
Total Reserve Allocation
Resort
Financing Receivable, Allowance for Credit Losses [Line Items]
Total - Loans individually evaluated for impairment	512		784
Reserve Allocation - Loans individually evaluated for impairment
Total - Loans collectively evaluated for impairment
Reserve Allocation - Loans collectively evaluated for impairment
Total Reserve Allocation						$ 1

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Loans and Allowance for Loan Losses - Summary of loan delinquencies at recorded investment (Details 3) $ in Thousands	Sep. 30, 2016 USD ($) Loan	Dec. 31, 2015 USD ($) Loan
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	59	67
Loan receivable, recorded investment, past due	$ 18,238	$ 14,945
Loan receivable, recorded investment, past due 90 days or more and still accruing
30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	22	38
Loan receivable, recorded investment, past due	$ 2,905	$ 4,265
60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	15	7
Loan receivable, recorded investment, past due	$ 6,065	$ 1,223
> 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	22	22
Loan receivable, recorded investment, past due	$ 9,268	$ 9,457
Real estate | Residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	40	38
Loan receivable, recorded investment, past due	$ 11,303	$ 10,546
Loan receivable, recorded investment, past due 90 days or more and still accruing
Real estate | Residential | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	12	18
Loan receivable, recorded investment, past due	$ 2,476	$ 3,379
Real estate | Residential | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	12	5
Loan receivable, recorded investment, past due	$ 1,445	$ 863
Real estate | Residential | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	16	15
Loan receivable, recorded investment, past due	$ 7,382	$ 6,304
Real estate | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1	3
Loan receivable, recorded investment, past due	$ 914	$ 1,312
Loan receivable, recorded investment, past due 90 days or more and still accruing
Real estate | Commercial | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan		2
Loan receivable, recorded investment, past due		$ 318
Real estate | Commercial | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Real estate | Commercial | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1	1
Loan receivable, recorded investment, past due	$ 914	$ 994
Real estate | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	2	1
Loan receivable, recorded investment, past due	$ 4,719	$ 187
Loan receivable, recorded investment, past due 90 days or more and still accruing
Real estate | Construction | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Real estate | Construction | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1
Loan receivable, recorded investment, past due	$ 4,532
Real estate | Construction | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1	1
Loan receivable, recorded investment, past due	$ 187	$ 187
Installment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1	3
Loan receivable, recorded investment, past due	$ 24	$ 38
Loan receivable, recorded investment, past due 90 days or more and still accruing
Installment | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan		3
Loan receivable, recorded investment, past due		$ 38
Installment | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1
Loan receivable, recorded investment, past due	$ 24
Installment | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	5	6
Loan receivable, recorded investment, past due	$ 567	$ 1,905
Loan receivable, recorded investment, past due 90 days or more and still accruing
Commercial | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	2	4
Loan receivable, recorded investment, past due	$ 45	$ 153
Commercial | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1
Loan receivable, recorded investment, past due	$ 64
Commercial | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	2	2
Loan receivable, recorded investment, past due	$ 458	$ 1,752
Collateral
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	4	8
Loan receivable, recorded investment, past due	$ 32	$ 78
Loan receivable, recorded investment, past due 90 days or more and still accruing
Collateral | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	4	7
Loan receivable, recorded investment, past due	$ 32	$ 68
Collateral | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Collateral | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan		1
Loan receivable, recorded investment, past due		$ 10
Home equity line of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	5	7
Loan receivable, recorded investment, past due	$ 644	$ 850
Loan receivable, recorded investment, past due 90 days or more and still accruing
Home equity line of credit | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	3	3
Loan receivable, recorded investment, past due	$ 317	$ 280
Home equity line of credit | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan		2
Loan receivable, recorded investment, past due		$ 360
Home equity line of credit | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	2	2
Loan receivable, recorded investment, past due	$ 327	$ 210
Demand
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1	1
Loan receivable, recorded investment, past due	$ 35	$ 29
Loan receivable, recorded investment, past due 90 days or more and still accruing
Demand | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan	1	1
Loan receivable, recorded investment, past due	$ 35	$ 29
Demand | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Demand | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Revolving credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Loan receivable, recorded investment, past due 90 days or more and still accruing
Revolving credit | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Revolving credit | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Revolving credit | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Resort
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Loan receivable, recorded investment, past due 90 days or more and still accruing
Resort | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Resort | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due
Resort | > 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan receivable, recorded investment, past due | Loan
Loan receivable, recorded investment, past due

XML

Loans and Allowance for Loan Losses - Nonperforming assets (Details 4) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans	$ 17,829	$ 14,913
Loans 90 days past due and still accruing
Other real estate owned		279
Total nonperforming assets	17,829	15,192
Real estate | Residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans	9,575	9,773
Loans 90 days past due and still accruing
Real estate | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans	1,008	1,106
Loans 90 days past due and still accruing
Real estate | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans	4,719	187
Loans 90 days past due and still accruing
Installment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans	24	32
Loans 90 days past due and still accruing
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans	1,677	3,232
Loans 90 days past due and still accruing
Collateral
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans	11	10
Loans 90 days past due and still accruing
Home equity line of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans	815	573
Loans 90 days past due and still accruing
Revolving credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans
Loans 90 days past due and still accruing
Resort
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccruing loans
Loans 90 days past due and still accruing

XML

Loans and Allowance for Loan Losses - Summary of impaired loans (Details 5) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Impaired loans without a valuation allowance
Recorded Investment	$ 33,156	$ 35,092
Unpaid Principal Balance	35,367	36,917
Impaired loans with a valuation allowance
Recorded Investment	4,442	5,925
Unpaid Principal Balance	5,153	6,329
Related Allowance	464	534
Total Recorded Investment	37,598	41,017
Total Unpaid Principal Balance	40,520	43,246
Total Related Allowance	464	534
Real estate | Residential
Impaired loans without a valuation allowance
Recorded Investment	11,616	11,530
Unpaid Principal Balance	13,168	12,878
Impaired loans with a valuation allowance
Recorded Investment	961	847
Unpaid Principal Balance	980	881
Related Allowance	141	139
Real estate | Commercial
Impaired loans without a valuation allowance
Recorded Investment	12,208	13,233
Unpaid Principal Balance	12,336	13,303
Impaired loans with a valuation allowance
Recorded Investment	2,881	2,919
Unpaid Principal Balance	2,881	2,919
Related Allowance	19	26
Real estate | Construction
Impaired loans without a valuation allowance
Recorded Investment	4,719	4,719
Unpaid Principal Balance	4,964	4,965
Impaired loans with a valuation allowance
Recorded Investment
Unpaid Principal Balance
Related Allowance
Installment
Impaired loans without a valuation allowance
Recorded Investment	205	202
Unpaid Principal Balance	222	202
Impaired loans with a valuation allowance
Recorded Investment	25	57
Unpaid Principal Balance	25	72
Related Allowance	7	8
Commercial
Impaired loans without a valuation allowance
Recorded Investment	2,029	3,921
Unpaid Principal Balance	2,255	4,066
Impaired loans with a valuation allowance
Recorded Investment	575	2,102
Unpaid Principal Balance	1,267	2,457
Related Allowance	297	361
Collateral
Impaired loans without a valuation allowance
Recorded Investment
Unpaid Principal Balance
Impaired loans with a valuation allowance
Recorded Investment
Unpaid Principal Balance
Related Allowance
Home equity line of credit
Impaired loans without a valuation allowance
Recorded Investment	1,867	703
Unpaid Principal Balance	1,910	719
Impaired loans with a valuation allowance
Recorded Investment
Unpaid Principal Balance
Related Allowance
Revolving credit
Impaired loans without a valuation allowance
Recorded Investment
Unpaid Principal Balance
Impaired loans with a valuation allowance
Recorded Investment
Unpaid Principal Balance
Related Allowance
Resort
Impaired loans without a valuation allowance
Recorded Investment	512	784
Unpaid Principal Balance	512	784
Impaired loans with a valuation allowance
Recorded Investment
Unpaid Principal Balance
Related Allowance

XML

Loans and Allowance for Loan Losses - Summary of information pertaining to impaired loans (Details 6) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Impaired loans without a valuation allowance
Average Recorded Investment	$ 33,791	$ 33,917
Interest Income Recognized	172	241	$ 607	$ 730
Impaired loans with a valuation allowance
Average Recorded Investment	5,065	8,117
Interest Income Recognized	44	48	142	162
Total Average Recorded Investment	38,856	42,034
Total Interest Income Recognized	216	289	749	892
Real estate | Residential
Impaired loans without a valuation allowance
Average Recorded Investment	11,394	9,204
Interest Income Recognized	22	25	71	78
Impaired loans with a valuation allowance
Average Recorded Investment	876	2,308
Interest Income Recognized	8	9	33	27
Real estate | Commercial
Impaired loans without a valuation allowance
Average Recorded Investment	12,850	13,817
Interest Income Recognized	125	144	396	433
Impaired loans with a valuation allowance
Average Recorded Investment	2,900	4,086
Interest Income Recognized	35	36	105	122
Real estate | Construction
Impaired loans without a valuation allowance
Average Recorded Investment	4,719	4,719
Interest Income Recognized		35	69	103
Impaired loans with a valuation allowance
Average Recorded Investment
Interest Income Recognized
Installment
Impaired loans without a valuation allowance
Average Recorded Investment	211	243
Interest Income Recognized	3	3	9	11
Impaired loans with a valuation allowance
Average Recorded Investment	33	29
Interest Income Recognized			1
Commercial
Impaired loans without a valuation allowance
Average Recorded Investment	2,552	4,083
Interest Income Recognized	8	27	27	82
Impaired loans with a valuation allowance
Average Recorded Investment	1,256	1,694
Interest Income Recognized	1	3	3	13
Collateral
Impaired loans without a valuation allowance
Average Recorded Investment
Interest Income Recognized
Impaired loans with a valuation allowance
Average Recorded Investment
Interest Income Recognized
Home equity line of credit
Impaired loans without a valuation allowance
Average Recorded Investment	1,417	1,010
Interest Income Recognized	9	2	18	3
Impaired loans with a valuation allowance
Average Recorded Investment
Interest Income Recognized
Revolving credit
Impaired loans without a valuation allowance
Average Recorded Investment
Interest Income Recognized
Impaired loans with a valuation allowance
Average Recorded Investment
Interest Income Recognized
Resort
Impaired loans without a valuation allowance
Average Recorded Investment	648	841
Interest Income Recognized	5	5	17	20
Impaired loans with a valuation allowance
Average Recorded Investment
Interest Income Recognized

XML

Loans and Allowance for Loan Losses - Information modified in a troubled debt restructuring (Details 7) $ in Thousands	Sep. 30, 2016 USD ($) Loan	Dec. 31, 2015 USD ($) Loan
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan	33	33
TDRs on Accrual Status of Recorded Investment | $	$ 10,915	$ 16,952
Number of TDRs on Nonaccrual Status of Loans | Loan	21	22
TDRs on Nonaccrual Status of Recorded Investment | $	$ 10,712	$ 7,258
Number of Total TDRs of Loans | Loan	54	55
Total TDRs of Recorded Investment | $	$ 21,627	$ 24,210
Real estate | Residential
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan	14	14
TDRs on Accrual Status of Recorded Investment | $	$ 2,549	$ 2,242
Number of TDRs on Nonaccrual Status of Loans | Loan	9	11
TDRs on Nonaccrual Status of Recorded Investment | $	$ 4,691	$ 5,557
Number of Total TDRs of Loans | Loan	23	25
Total TDRs of Recorded Investment | $	$ 7,240	$ 7,799
Real estate | Commercial
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan	3	4
TDRs on Accrual Status of Recorded Investment | $	$ 5,972	$ 6,664
Number of TDRs on Nonaccrual Status of Loans | Loan
TDRs on Nonaccrual Status of Recorded Investment | $
Number of Total TDRs of Loans | Loan	3	4
Total TDRs of Recorded Investment | $	$ 5,972	$ 6,664
Real estate | Construction
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan		1
TDRs on Accrual Status of Recorded Investment | $		$ 4,532
Number of TDRs on Nonaccrual Status of Loans | Loan	2	1
TDRs on Nonaccrual Status of Recorded Investment | $	$ 4,719	$ 187
Number of Total TDRs of Loans | Loan	2	2
Total TDRs of Recorded Investment | $	$ 4,719	$ 4,719
Installment
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan	4	4
TDRs on Accrual Status of Recorded Investment | $	$ 206	$ 227
Number of TDRs on Nonaccrual Status of Loans | Loan	1	2
TDRs on Nonaccrual Status of Recorded Investment | $	$ 24	$ 32
Number of Total TDRs of Loans | Loan	5	6
Total TDRs of Recorded Investment | $	$ 230	$ 259
Commercial
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan	3	6
TDRs on Accrual Status of Recorded Investment | $	$ 600	$ 2,350
Number of TDRs on Nonaccrual Status of Loans | Loan	8	8
TDRs on Nonaccrual Status of Recorded Investment | $	$ 1,220	$ 1,482
Number of Total TDRs of Loans | Loan	11	14
Total TDRs of Recorded Investment | $	$ 1,820	$ 3,832
Collateral
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan
TDRs on Accrual Status of Recorded Investment | $
Number of TDRs on Nonaccrual Status of Loans | Loan
TDRs on Nonaccrual Status of Recorded Investment | $
Number of Total TDRs of Loans | Loan
Total TDRs of Recorded Investment | $
Home equity line of credit
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan	8	3
TDRs on Accrual Status of Recorded Investment | $	$ 1,076	$ 153
Number of TDRs on Nonaccrual Status of Loans | Loan	1
TDRs on Nonaccrual Status of Recorded Investment | $	$ 58
Number of Total TDRs of Loans | Loan	9	3
Total TDRs of Recorded Investment | $	$ 1,134	$ 153
Revolving credit
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan
TDRs on Accrual Status of Recorded Investment | $
Number of TDRs on Nonaccrual Status of Loans | Loan
TDRs on Nonaccrual Status of Recorded Investment | $
Number of Total TDRs of Loans | Loan
Total TDRs of Recorded Investment | $
Resort
Financing Receivable, Modifications [Line Items]
Number of TDRs on Accrual Status of Loans | Loan	1	1
TDRs on Accrual Status of Recorded Investment | $	$ 512	$ 784
Number of TDRs on Nonaccrual Status of Loans | Loan
TDRs on Nonaccrual Status of Recorded Investment | $
Number of Total TDRs of Loans | Loan	1	1
Total TDRs of Recorded Investment | $	$ 512	$ 784

XML

Loans and Allowance for Loan Losses - Recorded investment and number of modifications for modified loans (Details 8) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016 USD ($) Loan	Sep. 30, 2015 USD ($) Loan	Sep. 30, 2016 USD ($) Loan	Sep. 30, 2015 USD ($) Loan
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan		2	2	8	16
Recorded Investment Prior to Modification		$ 348	$ 507	$ 1,333	$ 2,372
Recorded Investment After Modification	[1]	$ 348	$ 507	$ 1,330	$ 2,346
Real estate | Residential
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan		1	2	1	8
Recorded Investment Prior to Modification		$ 231	$ 507	$ 231	$ 1,549
Recorded Investment After Modification	[1]	$ 231	$ 507	$ 231	$ 1,536
Real estate | Commercial
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan					1
Recorded Investment Prior to Modification					$ 493
Recorded Investment After Modification	[1]				$ 487
Installment
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan					1
Recorded Investment Prior to Modification					$ 44
Recorded Investment After Modification	[1]				$ 41
Commercial
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan		1		1	3
Recorded Investment Prior to Modification		$ 117		$ 117	$ 133
Recorded Investment After Modification	[1]	$ 117		$ 117	$ 129
Home equity line of credit
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan				6	3
Recorded Investment Prior to Modification				$ 985	$ 153
Recorded Investment After Modification	[1]			$ 982	$ 153

[1] The period end balances are inclusive of all partial paydowns and charge-offs since the modification date. TDRs fully paid off, charged-off or foreclosed upon by period end are not included.

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Loans and Allowance for Loan Losses - TDR loans (Details 9) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($) Loan	Sep. 30, 2015 USD ($) Loan	Sep. 30, 2016 USD ($) Loan	Sep. 30, 2015 USD ($) Loan
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan	2	2	8	16
Extended Maturity	$ 117		$ 117
Adjusted Interest Rates
Combination of Rate and Maturity				34
Other	231	507	1,213	2,312
Total	$ 348	$ 507	$ 1,330	$ 2,346
Real estate | Residential
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan	1	2	1	8
Extended Maturity
Adjusted Interest Rates
Combination of Rate and Maturity
Other	231	507	231	1,536
Total	$ 231	$ 507	$ 231	$ 1,536
Real estate | Commercial
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan				1
Extended Maturity
Adjusted Interest Rates
Combination of Rate and Maturity
Other				487
Total				$ 487
Installment
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan				1
Extended Maturity
Adjusted Interest Rates
Combination of Rate and Maturity
Other				41
Total				$ 41
Commercial
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan	1		1	3
Extended Maturity	$ 117		$ 117
Adjusted Interest Rates
Combination of Rate and Maturity				34
Other				95
Total	$ 117		$ 117	$ 129
Home equity line of credit
Financing Receivable, Modifications [Line Items]
Number of Modifications | Loan			6	3
Extended Maturity
Adjusted Interest Rates
Combination of Rate and Maturity
Other			982	153
Total			$ 982	$ 153

XML

Loans and Allowance for Loan Losses - Loans modified as TDR (Details 10) $ in Thousands		3 Months Ended	9 Months Ended
		Sep. 30, 2016 USD ($) Loan	Sep. 30, 2016 USD ($) Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Loan		2	2
Recorded Investment | $	[1]	$ 352	$ 352
Real estate | Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Loan		1	1
Recorded Investment | $	[1]	$ 319	$ 319
Installment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Loan		1	1
Recorded Investment | $	[1]	$ 33	$ 33

[1] The period end balances are inclusive of all partial paydowns and charge-offs since the modification date. TDRs fully paid off, charged-off or foreclosed upon by period end are not included.

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Loans and Allowance for Loan Losses - Risk rating (Details 11) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 2,472,422	$ 2,357,812
Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,422,602	2,302,027
Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans	11,209	22,650
Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	38,494	32,969
Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans	117	166
Real estate | Residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	864,054	849,722
Real estate | Residential | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	853,388	838,314
Real estate | Residential | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans	762	1,154
Real estate | Residential | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	9,904	10,254
Real estate | Residential | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans
Real estate | Commercial
Financing Receivable, Recorded Investment [Line Items]
Total loans	931,703	887,431
Real estate | Commercial | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	917,459	867,531
Real estate | Commercial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,610	10,861
Real estate | Commercial | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	9,634	9,039
Real estate | Commercial | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans
Real estate | Construction
Financing Receivable, Recorded Investment [Line Items]
Total loans	50,083	30,895
Real estate | Construction | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	45,364	26,176
Real estate | Construction | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans
Real estate | Construction | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,719	4,719
Real estate | Construction | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans
Installment
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,211	2,970
Installment | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,161	2,886
Installment | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans	26	52
Installment | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	24	32
Installment | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans
Commercial
Financing Receivable, Recorded Investment [Line Items]
Total loans	449,008	409,550
Commercial | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	429,921	390,719
Commercial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans	5,772	10,354
Commercial | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	13,198	8,311
Commercial | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans	117	166
Collateral
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,621	1,668
Collateral | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,610	1,647
Collateral | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans
Collateral | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	11	21
Collateral | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans
Home equity line of credit
Financing Receivable, Recorded Investment [Line Items]
Total loans	172,148	174,701
Home equity line of credit | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	171,105	173,879
Home equity line of credit | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans	39	229
Home equity line of credit | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,004	593
Home equity line of credit | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans
Revolving credit
Financing Receivable, Recorded Investment [Line Items]
Total loans	82	91
Revolving credit | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	82	91
Revolving credit | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans
Revolving credit | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans
Revolving credit | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans
Resort
Financing Receivable, Recorded Investment [Line Items]
Total loans	512	784
Resort | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	512	784
Resort | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans
Resort | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans
Resort | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans

XML

Loans and Allowance for Loan Losses (Detail Textuals)	9 Months Ended
	Sep. 30, 2016 USD ($) Loan	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Receivables [Abstract]
Recorded investment balance of TDRs approximated	$ 21,627,000		$ 24,210,000
TDRs on accrual status	10,915,000		16,952,000
TDRs on nonaccrual status	$ 10,712,000		7,258,000
Percentage of accruing TDRs	100.00%
Allowance for loan losses included specific reserves	$ 282,000		340,000
Bank charge-offs	28,000	$ 204,000
Additional funds available to borrowers in TDR status	$ 87,000		$ 272,000
Number of loan reviews undertaken by consulting firms | Loan	2
Threshold for percentage of market penetration for specified segment in loans of total lending	65.00%

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Mortgage Servicing Rights (Detail Textuals) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Servicing Assets At Amortized Value [Line Items]
Mortgage servicing rights impairment			$ 283,000
Net gain on loans sold	$ 939,000	$ 993,000	2,180,000	$ 1,925,000
Other noninterest income
Servicing Assets At Amortized Value [Line Items]
Mortgage servicing rights impairment			283,000	0
Mortgage servicing rights
Servicing Assets At Amortized Value [Line Items]
Fair value of mortgage servicing rights	4,400,000		4,400,000		$ 5,000,000
Loans sold with servicing rights retained			106,900,000	149,200,000
Principal balance of loans serviced for others	522,400,000		522,400,000		457,500,000
Mortgage servicing rights | Other noninterest income
Servicing Assets At Amortized Value [Line Items]
Mortgage servicing rights impairment			283,000	0
Loan servicing fees			897,000	$ 653,000
Mortgage servicing rights | Prepaid expenses and other assets
Servicing Assets At Amortized Value [Line Items]
Carrying value of mortgage servicing rights	$ 4,400,000		$ 4,400,000		$ 4,400,000

XML

Credit Arrangements (Detail Textuals) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Balance with the bank	$ 30,400,000	$ 17,700,000
Federal Home Loan Bank of Boston ("FHLBB") Stock | Line of credit
Line of Credit Facility [Line Items]
Pre-approved line of credit	8,800,000	8,800,000
Federal Home Loan Bank of Boston ("FHLBB") Stock | Unsecured line of credit with bank
Line of Credit Facility [Line Items]
Pre-approved line of credit	55,000,000	$ 45,000,000
Amount under unsecured line of credit agreement	3,500,000
Balance with the bank	$ 512,500

XML

Credit Arrangements (Detail Textuals 1) - Federal Home Loan Bank of Boston ("FHLBB") Stock - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal Home Loan Bank of Boston advances	$ 220.6	$ 377.6
Collateral value first mortgage loans	1,200.0	1,300.0
Line of credit facility, remaining borrowing capacity	518.5	407.8
Letter of credit	$ 95.5	$ 63.0
Minimum percent of aggregate principal amount of unpaid residential mortgage loans for acquiring shares in FHLBB	0.35%
Maximum percent of advances (borrowings) from the FHLBB to acquire shares in FHLBB	4.50%

XML

Credit Arrangements (Detail Textuals 2) - Discount Window Loan Collateral Program - Federal Reserve Bank Advances - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Short-term Debt [Line Items]
Amount borrowed under discount window loan collateral program	$ 66.6	$ 63.2
Collateralized amount of funding arrangement in pledged commercial real estate loans	$ 135.1	$ 136.6

XML

Credit Arrangements (Detail Textuals 3) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Treasury bill securities with a fair value	$ 41,400	$ 40,400
Repurchase liabilities	35,036	35,769
Master Repurchase Agreement Borrowing Facility | Broker
Line of Credit Facility [Line Items]
Treasury bill securities with a fair value	11,000	11,300
Outstanding borrowings	10,500	10,500
Repurchase liabilities	$ 35,000	$ 35,800

XML

Deposits - Deposit balances and weighted average interest rates (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Banking and Thrift [Abstract]
Noninterest-bearing demand deposits	$ 419,664	$ 401,388
Interest-bearing
NOW accounts	590,213	468,054
Money market	536,979	460,737
Savings accounts	223,848	220,389
Time deposits	477,169	440,790
Total interest-bearing deposits	1,828,209	1,589,970
Total deposits	$ 2,247,873	$ 1,991,358

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Deposits (Detail Textuals) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Banking and Thrift [Abstract]
Brokered deposits	$ 43.2	$ 44.3
Time certificates of deposit in denominations of $250,000 or more	$ 106.3	$ 89.6

XML

Pension and Other Postretirement Benefit Plans - Components of net periodic pension and benefit costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Pension Benefits
Components of net periodic pension cost
Service cost
Interest cost	264	259	789	777
Expected return on plan assets	(279)	(362)	(835)	(1,086)
Amortization:
Loss	176	178	528	532
Prior service cost
Net periodic benefit cost	161	75	482	223
Other Postretirement Benefits
Components of net periodic pension cost
Service cost	14	14	42	43
Interest cost	30	30	90	91
Expected return on plan assets
Amortization:
Loss		3		9
Prior service cost	(13)	(13)	(38)	(38)
Net periodic benefit cost	$ 31	$ 34	$ 94	$ 105

XML

Pension and Other Postretirement Benefit Plans - Shares held by ESOP (Details 1) - Farmington Bank Employee Stock Ownership Plan (ESOP)	Sep. 30, 2016 shares
Employee Stock Ownership Plan (Esop) Disclosures [Line Items]
Allocated	476,805
Committed to be released	71,391
Unallocated	882,220
Total shares held by the ESOP	1,430,416

XML

Pension and Other Postretirement Benefit Plans (Detail Textuals 1) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Fair value of unallocated ESOP shares	$ 15.7
Farmington Bank Employee Stock Ownership Plan (ESOP) | Farmington Bank
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Loan provided by the company to purchase common stock (in shares)	1,430,416
Debt structure direct loan description of variable rate basis	Wall Street Journal Prime Rate
Debt structure direct loan basis spread on variable rate	1.00%
Term of loan for annual payments of interest and principal	15 years
Outstanding balance of loan provided by the company to purchase common stock	$ 12.0
Interest rate of outstanding balance of Loan provided by the company to purchase common stock	4.50%
ESOP compensation expense	$ 1.2	$ 1.1

XML

Stock Incentive Plan - Weighted-average estimated fair values of stock option grants (Details) - Stock options - $ / shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted per share average fair value of options granted	$ 3	$ 3.33
Weighted-average assumptions:
Risk-free interest rate	1.53%	1.61%
Expected volatility	22.88%	24.96%
Expected dividend yield	2.13%	1.99%
Expected life of options granted	6 years	6 years
Minimum
Weighted-average assumptions:
Weighted-average dividend yield	1.91%	1.50%
Maximum
Weighted-average assumptions:
Weighted-average dividend yield	2.25%	2.35%

XML

Stock Incentive Plan - Summary of Company's stock option activity (Details 1) - Stock options $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares
Number of Stock Options
Outstanding at December 31, 2015 | shares	1,656,157
Granted | shares	9,000
Exercised | shares	(110,131)
Forfeited | shares	(2,700)
Expired | shares
Outstanding at September 30, 2016 | shares	1,552,326
Exercisable at September 30, 2016 | shares	1,503,176
Weighted-Average Exercise Price
Outstanding at December 31, 2015 | $ / shares	$ 13.11
Granted | $ / shares	16.52
Exercised | $ / shares	13.00
Forfeited | $ / shares	14.59
Expired | $ / shares
Outstanding at September 30, 2016 | $ / shares	13.14
Exercisable at September 30, 2016 | $ / shares	$ 13.05
Weighted-average remaining contractual term outstanding (in years)	6 years 22 days
Weighted-average remaining contractual term Exercisable at September 30, 2016 (in years)	5 years 11 months 27 days
Aggregate intrinsic value of options outstanding at September 30, 2016 | $	$ 7,218
Aggregate intrinsic value of options exercisable at September 30, 2016 | $	$ 7,128

XML

Stock Incentive Plan - Summary of status of Company's restricted stock (Details 2) - Restricted Stock	9 Months Ended
	Sep. 30, 2016 $ / shares shares
Number of Restricted Stock
Unvested at December 31, 2015 | shares	126,290
Granted | shares
Vested | shares	(126,290)
Forfeited | shares
Unvested at September 30, 2016 | shares
Weighted-Average Grant Date Fair Value
Unvested at December 31, 2015 | $ / shares	$ 12.95
Granted | $ / shares
Vested | $ / shares	12.95
Forfeited | $ / shares
Unvested at September 30, 2016 | $ / shares

XML

Stock Incentive Plan (Detail Textuals) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	May 31, 2016	Dec. 31, 2015	Aug. 31, 2012
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of non-vested restricted shares				126,290
2012 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for grants					2,503,228
Share-based compensation expense	$ 1,800,000	$ 2,500,000
Method used	Black-Scholes option pricing model
Total intrinsic value of options exercised	$ 416,000
2012 Stock Incentive Plan | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiry term of stock options	10 years
Share-based compensation expense	$ 726,000	1,000,000
Number of non-vested options outstanding	49,150
Expected future compensation expense	$ 150,000
Expected unrecognized compensation expense, weighted average period	2 years 3 months 26 days
2012 Stock Incentive Plan | Stock options | Vested Immediately
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage of stock awards	20.00%
2012 Stock Incentive Plan | Stock options | Vest each annual anniversary of the grant date through 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage of stock awards	20.00%
2012 Stock Incentive Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for grants					715,208
Share-based compensation expense	$ 1,100,000	$ 1,500,000
2012 Stock Incentive Plan | Restricted Stock | Vested Immediately
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage of stock awards	20.00%
2012 Stock Incentive Plan | Restricted Stock | Vest each annual anniversary of the grant date through 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage of stock awards	20.00%
2012 Stock Incentive Plan | Non Qualified Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for grants					1,788,020
2016 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for grants			300,000

XML

Derivative Financial Instruments - Not designated outstanding interest rate swaps (Details) - Not Designated as Hedging Instrument $ in Thousands	Sep. 30, 2016 USD ($) Security	Dec. 31, 2015 USD ($) Security
Other Assets | Commercial loan customer interest rate swap position
Derivatives, Fair Value [Line Items]
Number of Instruments | Security	81	60
Notional Amount	$ 371,691	$ 257,693
Estimated Fair Values	$ 23,952	$ 10,564
Other Liabilities | Commercial loan customer interest rate swap position
Derivatives, Fair Value [Line Items]
Number of Instruments | Security		6
Notional Amount		$ 23,411
Estimated Fair Values		$ (78)
Other Liabilities | Counter party interest rate swap position
Derivatives, Fair Value [Line Items]
Number of Instruments | Security	81	66
Notional Amount	$ 371,691	$ 281,104
Estimated Fair Values	$ (24,246)	$ (10,599)

XML

Derivative Financial Instruments - Changes in the fair value of non-hedge accounting derivatives (Details 1) - Not Designated as Hedging Instrument - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Commercial loan customer interest rate swap position
Derivative [Line Items]
Changes in fair value of non-hedge accounting derivatives	$ (3,062)	$ 5,461	$ 9,107	$ 2,349
Commercial loan customer interest rate swap position | Interest Income Recorded in Interest Income
Derivative [Line Items]
Changes in fair value of non-hedge accounting derivatives	(1,468)	(1,462)	(4,281)	(3,799)
Commercial loan customer interest rate swap position | MTM Gain (Loss) Recorded in Noninterest Income
Derivative [Line Items]
Changes in fair value of non-hedge accounting derivatives	(1,594)	6,923	13,388	6,148
Counter party interest rate swap position
Derivative [Line Items]
Changes in fair value of non-hedge accounting derivatives	3,062	(5,461)	(9,107)	(2,349)
Counter party interest rate swap position | Interest Income Recorded in Interest Income
Derivative [Line Items]
Changes in fair value of non-hedge accounting derivatives	1,468	1,462	4,281	3,799
Counter party interest rate swap position | MTM Gain (Loss) Recorded in Noninterest Income
Derivative [Line Items]
Changes in fair value of non-hedge accounting derivatives	$ 1,594	$ (6,923)	$ (13,388)	$ (6,148)

XML

Derivative Financial Instruments (Detail Textuals) $ in Millions	Sep. 30, 2016 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Minimum threshold amount of long-term commercial loans or commercial mortgages to offer interest rate swap agreements	$ 1.0
Cash balance maintained with a correspondent bank to collateralize company's position	26.7
Outstanding receivables secured in excess of by a correspondent bank	10.0
Outstanding rate locks | Forward Contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Mortgage banking derivatives, notional amount	37.7
Outstanding commitments to sell residential mortgage loans | Forward Contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Mortgage banking derivatives, notional amount	38.5
Mandatory forward commitments | Forward Contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Mortgage banking derivatives, notional amount	$ 31.4

XML

Offsetting of Financial Assets and Liabilities - Summary of repurchase agreement borrowings and repurchase liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings	$ 10,500	$ 10,500
Total repurchase liabilities	35,036	35,769
Total	45,536	46,269
U.S. Government agency obligations
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings	6,000	6,000
Total repurchase liabilities	35,036	35,769
Government sponsored residential mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings	4,500	4,500
Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings
Total repurchase liabilities	35,036	35,769
Total	35,036	35,769
Overnight and Continuous | U.S. Government agency obligations
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings
Total repurchase liabilities	35,036	35,769
Overnight and Continuous | Government sponsored residential mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings
Up to One Year
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings
Total repurchase liabilities
Total
Up to One Year | U.S. Government agency obligations
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings
Total repurchase liabilities
Up to One Year | Government sponsored residential mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings
One Year to Three Years
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings	10,500	10,500
Total repurchase liabilities
Total	10,500	10,500
One Year to Three Years | U.S. Government agency obligations
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings	6,000	6,000
Total repurchase liabilities
One Year to Three Years | Government sponsored residential mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Total repurchase agreement borrowings	$ 4,500	$ 4,500

XML

Offsetting of Financial Assets and Liabilities - Potential effect of rights of setoff associated with recognized financial assets and liabilities (Details 1) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Interest rate swap derivatives, gross amount of recognized assets	$ 23,952	$ 10,564
Interest rate swap derivatives, gross amounts offset in statement of financial condition
Interest rate swap derivatives, Net amounts of assets presented in statement of financial condition	23,952	10,564
Interest rate swap derivatives, Gross amounts not offset in statement of financial condition, Financial instruments
Interest rate swap derivatives, Gross amounts not offset in statement of financial condition, securities collateral received
Interest rate swap derivatives, Gross amounts not offset in statement of financial condition, cash collateral received	23,952	10,564
Interest rate swap derivatives, Gross amounts not offset in statement of financial condition, Net amount
Gross amount of recognized assets	23,952	10,564
Gross amounts offset in statement of financial condition
Net amounts of assets presented in statement of financial condition	23,952	10,564
Gross amounts not offset in statement of financial condition, financial instruments
Gross amounts not offset in statement of financial condition, securities collateral received
Gross amounts not offset in statement of financial condition, cash collateral received	23,952	10,564
Gross amounts not offset in statement of financial condition, Net amount
Interest rate swap derivatives, Gross amount of recognized liabilities	24,246	10,677
Interest rate swap derivatives, Gross amounts offset in statement of financial condition
Interest rate swap derivatives, Net amounts of liabilities presented in statement of financial condition	24,246	10,677
Interest rate swap derivatives, Gross amounts not offset in statement of financial condition liabilities, Financial instruments
Interest rate swap derivatives, Gross amounts not offset in statement of financial condition, securities collateral pledged
Interest rate swap derivatives, Gross amounts not offset in statement of financial condition, cash collateral pledged	24,246	10,677
Interest rate swap derivatives, Gross amounts not offset in statement of financial condition liabilities, Net amount
Repurchase agreement borrowings, Gross amount of recognized liabilities	10,500	10,500
Repurchase agreement borrowings, Gross amounts offset in statement of financial condition
Repurchase agreement borrowings, Net amounts of liabilities presented in statement of financial condition	10,500	10,500
Repurchase agreement borrowings, Gross amounts not offset in statement of financial condition liabilities, financial instruments
Repurchase agreement borrowings, Gross amounts not offset in statement of financial condition, securities collateral pledged	10,500	10,500
Repurchase agreement borrowings, Gross amounts not offset in statement of financial condition, cash collateral pledged
Repurchase agreement borrowings, Net amount
Gross amount of recognized liabilities	34,746	21,177
Gross amounts offset in statement of financial condition
Net Amounts of Liabilities Presented in the Statement of Financial Condition	34,746	21,177
Gross amounts not offset in statement of financial condition liabilities, Financial instruments
Gross amounts not offset in statement of financial condition, securities collateral pledged	10,500	10,500
Gross amounts not offset in statement of financial condition, cash collateral pledged	24,246	10,677
Gross amounts not offset in statement of financial condition liabilities, Net amount

XML

Financial Instruments with Off-Balance Sheet Risk - Financial instruments whose contract amounts represent credit risk (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair value, off-balance sheet risks, amount, liability	$ 556,368	$ 487,326
Approved loan commitments
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair value, off-balance sheet risks, amount, liability	73,531	46,144
Unadvanced portion of construction loans
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair value, off-balance sheet risks, amount, liability	63,581	44,457
Unused lines for home equity loans
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair value, off-balance sheet risks, amount, liability	193,845	204,983
Unused revolving lines of credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair value, off-balance sheet risks, amount, liability	68	365
Unused commercial letters of credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair value, off-balance sheet risks, amount, liability	3,970	3,558
Unused commercial lines of credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair value, off-balance sheet risks, amount, liability	$ 221,373	$ 187,819

XML

Financial Instruments with Off-Balance Sheet Risk (Details Textuals) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Financial Instruments With Off Balance Sheet Risk Disclosure [Abstract]
Financial instruments with off-balance sheet risk, valuation allowance	$ 86,000	$ 501,000

XML

Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets
Securities available-for-sale	$ 134,094	$ 132,424
Fair Value Measurements Recurring | Total
Assets
Securities available-for-sale	134,094	132,424
Total Assets	158,556	143,195
Liabilities
Total Liabilities	24,473	10,747
Fair Value Measurements Recurring | Total | U.S. Treasury obligations
Assets
Securities available-for-sale	20,089	38,859
Fair Value Measurements Recurring | Total | U.S. Government agency obligations
Assets
Securities available-for-sale	103,119	81,805
Fair Value Measurements Recurring | Total | Government sponsored residential mortgage-backed securities
Assets
Securities available-for-sale	3,934	5,153
Fair Value Measurements Recurring | Total | Corporate debt securities
Assets
Securities available-for-sale	1,024	1,048
Fair Value Measurements Recurring | Total | Preferred equity securities
Assets
Securities available-for-sale	1,868	1,632
Fair Value Measurements Recurring | Total | Marketable equity securities
Assets
Securities available-for-sale	167	160
Fair Value Measurements Recurring | Total | Mutual funds
Assets
Securities available-for-sale	3,893	3,767
Fair Value Measurements Recurring | Total | Interest rate swap derivative
Assets
Derivative Assets	23,952	10,564
Liabilities
Derivative Liabilities	24,246	10,677
Fair Value Measurements Recurring | Total | Derivative loan commitments
Assets
Derivative Assets	510	207
Fair Value Measurements Recurring | Total | Forward loan sales commitments
Liabilities
Derivative Liabilities	227	70
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets
Securities available-for-sale	5,035	23,788
Total Assets	5,035	23,788
Liabilities
Total Liabilities
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury obligations
Assets
Securities available-for-sale	3,000	21,996
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Government agency obligations
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Government sponsored residential mortgage-backed securities
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt securities
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Preferred equity securities
Assets
Securities available-for-sale	1,868	1,632
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable equity securities
Assets
Securities available-for-sale	167	160
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Mutual funds
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate swap derivative
Assets
Derivative Assets
Liabilities
Derivative Liabilities
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivative loan commitments
Assets
Derivative Assets
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Forward loan sales commitments
Liabilities
Derivative Liabilities
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2)
Assets
Securities available-for-sale	129,059	108,636
Total Assets	153,011	119,200
Liabilities
Total Liabilities	24,246	10,677
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | U.S. Treasury obligations
Assets
Securities available-for-sale	17,089	16,863
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | U.S. Government agency obligations
Assets
Securities available-for-sale	103,119	81,805
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | Government sponsored residential mortgage-backed securities
Assets
Securities available-for-sale	3,934	5,153
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | Corporate debt securities
Assets
Securities available-for-sale	1,024	1,048
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | Preferred equity securities
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | Marketable equity securities
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | Mutual funds
Assets
Securities available-for-sale	3,893	3,767
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | Interest rate swap derivative
Assets
Derivative Assets	23,952	10,564
Liabilities
Derivative Liabilities	24,246	10,677
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | Derivative loan commitments
Assets
Derivative Assets
Fair Value Measurements Recurring | Significant Observable Inputs (Level 2) | Forward loan sales commitments
Liabilities
Derivative Liabilities
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3)
Assets
Securities available-for-sale
Total Assets	510	207
Liabilities
Total Liabilities	227	70
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | U.S. Treasury obligations
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | U.S. Government agency obligations
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Government sponsored residential mortgage-backed securities
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Preferred equity securities
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Marketable equity securities
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Mutual funds
Assets
Securities available-for-sale
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Interest rate swap derivative
Assets
Derivative Assets
Liabilities
Derivative Liabilities
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Derivative loan commitments
Assets
Derivative Assets	510	207
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Forward loan sales commitments
Liabilities
Derivative Liabilities	$ 227	$ 70

XML

Fair Value Measurements - Additional information about assets measured at fair value (Details 1) - Fair Value Measurements Recurring - Derivative and Forward Loan Sales Commitments, Net - Significant Unobservable Inputs (Level 3) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, at beginning of period	$ 177	$ 140	$ 137	$ 14
Total realized gain (loss):
Included in earnings	106	(74)	146	52
Balance, at the end of period	$ 283	$ 66	$ 283	$ 66

XML

Fair Value Measurements - Valuation methodology and unobservable inputs for Level 3 assets (Details 2) - Level 3 - Fair Value Measurements Recurring - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	$ 510	$ 207
Derivative and forward loan sales commitments, net
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	$ 283	$ 137
Valuation Methodology	Adjusted quoted prices in active markets	Adjusted quoted prices in active markets
Significant Unobservable Inputs	Embedded servicing value	Embedded servicing value
Mortgage serving rights of input embedded servicing value percent	1.01%	1.28%

XML

Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Details 3) - Fair value, measurements, nonrecurring - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans
Mortgage servicing rights
Other real estate owned
Significant Observable Inputs (Level 2)
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans
Mortgage servicing rights
Other real estate owned
Significant Unobservable Inputs (Level 3)
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans	1,990	4,225
Mortgage servicing rights	4,401
Other real estate owned		$ 279

XML

Fair Value Measurements - Valuation methodology and unobservable inputs for Level 3 assets (Details 4) - Significant Unobservable Inputs (Level 3) - Fair value, measurements, nonrecurring - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Impaired loans
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	$ 1,990	$ 4,225
Valuation Methodology	Appraisals	Appraisals
Impaired loans | Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount for dated appraisal	5.00%	5.00%
Discount for costs to sell	8.00%	8.00%
Impaired loans | Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount for dated appraisal	20.00%	20.00%
Discount for costs to sell	15.00%	15.00%
Impaired loans | Weighted Average
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount for dated appraisal	12.50%	12.50%
Discount for costs to sell	11.50%	11.50%
Mortgage servicing rights
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	$ 4,401
Valuation Methodology	Discounted Cash Flows
Mortgage servicing rights | Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Prepayment speeds	7.46%
Mortgage servicing rights | Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Prepayment speeds	20.72%
Mortgage servicing rights | Weighted Average
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Prepayment speeds	14.04%
Discount rate	9.00%
Other real estate owned
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value		$ 279
Valuation Methodology		Appraisals
Other real estate owned | Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount for costs to sell		8.00%
Discount for condition		10.00%
Other real estate owned | Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount for costs to sell		15.00%
Discount for condition		30.00%
Other real estate owned | Weighted Average
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Discount for costs to sell		11.50%
Discount for condition		20.00%

XML

Fair Value Measurements - Carrying amount, fair value of financial instruments (Details 5) - USD ($) $ in Thousands		Sep. 30, 2016	Dec. 31, 2015
Financial assets
Securities held-to-maturity		$ 7,338	$ 32,246
Securities available-for-sale		134,094	132,424
Loans	[1]	2,476,364	2,361,796
Alternative investments		2,300	2,300
Financial liabilities
Time deposits		477,169	440,790
Federal Home Loan Bank of Boston advances		220,600	377,600
Repurchase agreement borrowings		10,500	10,500
Repurchase liabilities		35,036	35,769
Carrying Amount
Financial assets
Securities held-to-maturity	[2]	7,338	32,246
Securities available-for-sale	[3]	134,094	132,424
Loans	[4]	2,476,364	2,361,796
Loans held-for-sale	[2]	5,462	9,637
Mortgage servicing rights	[4]	4,401	4,406
Federal Home Loan Bank of Boston stock	[2]	15,139	21,729
Alternative investments	[4]	2,327	2,508
Interest rate swap derivatives	[2]	23,952	10,564
Derivative loan commitments	[4]	510	207
Financial liabilities
Deposits other than time deposits	[5]	1,770,704	1,550,568
Time deposits	[2]	477,169	440,790
Federal Home Loan Bank of Boston advances	[2]	220,600	377,600
Repurchase agreement borrowings	[2]	10,500	10,500
Repurchase liabilities	[2]	35,036	35,769
Interest rate swap derivatives	[2]	24,246	10,677
Forward loan sales commitments	[4]	227	70
Estimated Fair Value
Financial assets
Securities held-to-maturity	[2]	7,619	32,357
Securities available-for-sale	[3]	134,094	132,424
Loans	[4]	2,469,126	2,336,293
Loans held-for-sale	[2]	5,574	9,686
Mortgage servicing rights	[4]	4,401	5,029
Federal Home Loan Bank of Boston stock	[2]	15,139	21,729
Alternative investments	[4]	2,335	2,409
Interest rate swap derivatives	[2]	23,952	10,564
Derivative loan commitments	[4]	510	207
Financial liabilities
Deposits other than time deposits	[5]	1,770,704	1,550,568
Time deposits	[2]	481,334	444,803
Federal Home Loan Bank of Boston advances	[2]	222,666	376,626
Repurchase agreement borrowings	[2]	10,651	10,539
Repurchase liabilities	[2]	35,031	35,765
Interest rate swap derivatives	[2]	24,246	10,677
Forward loan sales commitments	[4]	$ 227	$ 70

[1] Loans include net deferred loan costs of $3.9 million and $4.0 million at September 30, 2016 and December 31, 2015, respectively.

[2] Level 2

[3] See previous table

[4] Level 3

[5] Level 1

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Fair Value Measurements (Detail Textuals) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Total alternative investments	$ 2,300,000		$ 2,300,000
Mortgage servicing rights impairment	283,000
Recognized profit distributions in its limited partnerships	179,000	$ 26,000
Unfunded commitments for alternative investments	619,000
Other noninterest income
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Recognized gain (loss) on forward loan sale commitments	146,000	52,000
Mortgage servicing rights impairment	283,000	0
Other-than-temporary impairment charge on limited partnership	$ 219,000	$ 144,000

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Regulatory Matters - Actual capital amounts and ratios (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total Capital (to Risk Weighted Assets) Actual Amount	$ 283,164	$ 273,255
Total Capital (to Risk Weighted Assets) Actual Ratio	12.57%	12.88%
Total Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Amount	$ 180,196	$ 169,724
Total Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Ratio	8.00%	8.00%
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Amount	$ 225,245	$ 212,155
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Ratio	10.00%	10.00%
Tier I Capital (to Risk Weighted Assets) Actual Amount	$ 261,815	$ 252,556
Tier I Capital (to Risk Weighted Assets) Actual Ratio	11.62%	11.91%
Tier I Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Amount	$ 135,147	$ 127,232
Tier I Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Ratio	6.00%	6.00%
Tier I Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Amount	$ 180,195	$ 169,643
Tier I Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Ratio	8.00%	8.00%
Common Equity Tier I Capital (to Risk Weighted Assets) Actual Amount	$ 261,815	$ 252,556
Common Equity Tier I Capital (to Risk Weighted Assets) Actual Ratio	11.62%	11.91%
Common Equity Tier I Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Amount	$ 101,360	$ 95,424
Common Equity Tier I Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Ratio	4.50%	4.50%
Common Equity Tier I Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Amount	$ 146,409	$ 137,835
Common Equity Tier I Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Ratio	6.50%	6.50%
Tier I Leverage Capital (to Average Assets) Actual Amount	$ 261,815	$ 252,556
Tier I Leverage Capital (to Average Assets) Actual Ratio	9.40%	9.39%
Tier I Leverage Capital (to Average Assets) Minimum Required for Capital Adequacy Purposes Amount	$ 111,438	$ 107,585
Tier I Leverage Capital (to Average Assets) Minimum Required for Capital Adequacy Purposes Ratio	4.00%	4.00%
Tier I Leverage Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Amount	$ 139,297	$ 134,481
Tier I Leverage Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Ratio	5.00%	5.00%
Farmington Bank
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total Capital (to Risk Weighted Assets) Actual Amount	$ 249,304	$ 236,486
Total Capital (to Risk Weighted Assets) Actual Ratio	11.07%	11.16%
Total Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Amount	$ 180,118	$ 169,524
Total Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Ratio	8.00%	8.00%
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Amount	$ 225,148	$ 211,905
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Ratio	10.00%	10.00%
Tier I Capital (to Risk Weighted Assets) Actual Amount	$ 227,955	$ 215,787
Tier I Capital (to Risk Weighted Assets) Actual Ratio	10.12%	10.18%
Tier I Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Amount	$ 135,088	$ 127,183
Tier I Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Ratio	6.00%	6.00%
Tier I Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Amount	$ 180,118	$ 169,577
Tier I Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Ratio	8.00%	8.00%
Common Equity Tier I Capital (to Risk Weighted Assets) Actual Amount	$ 227,955	$ 215,787
Common Equity Tier I Capital (to Risk Weighted Assets) Actual Ratio	10.12%	10.18%
Common Equity Tier I Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Amount	$ 101,316	$ 95,387
Common Equity Tier I Capital (to Risk Weighted Assets) Minimum Required for Capital Adequacy Purposes Ratio	4.50%	4.50%
Common Equity Tier I Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Amount	$ 146,346	$ 137,781
Common Equity Tier I Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Ratio	6.50%	6.50%
Tier I Leverage Capital (to Average Assets) Actual Amount	$ 227,955	$ 215,787
Tier I Leverage Capital (to Average Assets) Actual Ratio	8.19%	8.03%
Tier I Leverage Capital (to Average Assets) Minimum Required for Capital Adequacy Purposes Amount	$ 111,397	$ 107,490
Tier I Leverage Capital (to Average Assets) Minimum Required for Capital Adequacy Purposes Ratio	4.00%	4.00%
Tier I Leverage Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Amount	$ 139,247	$ 134,363
Tier I Leverage Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Ratio	5.00%	5.00%

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Regulatory Matters (Detail Textuals)	Sep. 30, 2016
Regulatory Matters Disclosure [Abstract]
Percentage of tier one capital greater than risk weighted assets	2.50%

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Other Comprehensive Income - Changes in accumulated other comprehensive loss, net of tax (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income Loss Net [Roll Forward]
Balance at beginning			$ (7,162)
Balance at ending	$ (6,344)		(6,344)
Investment Securities Available-for-Sale
Accumulated Other Comprehensive Income Loss Net [Roll Forward]
Balance at beginning	247	$ 105	(249)	$ 1,046
Other comprehensive income (loss) during the period	5	67	501	(1,861)
Amount reclassified from accumulated other comprehensive income, net of tax				987
Net change	5	67	501	(874)
Balance at ending	252	172	252	172
Employee Benefit Plans
Accumulated Other Comprehensive Income Loss Net [Roll Forward]
Balance at beginning	(6,702)	(7,433)	(6,913)	(7,557)
Other comprehensive income (loss) during the period
Amount reclassified from accumulated other comprehensive income, net of tax	106	110	317	234
Net change	106	110	317	234
Balance at ending	(6,596)	(7,323)	(6,596)	(7,323)
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive Income Loss Net [Roll Forward]
Balance at beginning	(6,455)	(7,328)	(7,162)	(6,511)
Other comprehensive income (loss) during the period	5	67	501	(1,861)
Amount reclassified from accumulated other comprehensive income, net of tax	106	110	317	1,221
Net change	111	177	818	(640)
Balance at ending	$ (6,344)	$ (7,151)	$ (6,344)	$ (7,151)

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Other Comprehensive Income - Reconciliation of changes in components of other comprehensive income including amount of income tax expense allocated to each component of other comprehensive income (Details 1) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Unrealized gains (losses) on available-for-sale securities, Pre Tax Amount		$ 8	$ 103	$ 776	$ (2,872)
Unrealized gains (losses) on available-for-sale securities, Tax Benefit (Expense)		(3)	(36)	(275)	1,011
Unrealized gains (losses) on available-for-sale securities, After Tax Amount		5	67	501	(1,861)
Less: net security gains reclassified into other noninterest income, Pre Tax Amount					1,523
Less: net security gains reclassified into other noninterest income, Tax Benefit (Expense)					(536)
Less: net security gains reclassified into other noninterest income, After Tax Amount					987
Net change in fair value of securities available-for-sale, Pre Tax Amount		8	103	776	(1,349)
Net change in fair value of securities available-for-sale, Tax Benefit (Expense)		(3)	(36)	(275)	475
Net change in fair value of securities available-for-sale, After Tax Amount		5	67	501	(874)
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs, Pre Tax Amount	[1]	164	170	491	361
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs, Tax Benefit (Expense)	[1]	(58)	(60)	(174)	(127)
Reclassification adjustment for prior service costs and net gain included in net periodic pension costs, After Tax Amount	[1]	106	110	317	234
Total other comprehensive income (loss), Pre Tax Amount		172	273	1,267	(988)
Total other comprehensive income (loss), Tax Benefit (Expense)		(61)	(96)	(449)	348
Total other comprehensive income (loss), After Tax Amount		$ 111	$ 177	$ 818	$ (640)

[1] Amounts are included in salaries and employee benefits in the unaudited Consolidated Statements of Income.