INVESTMENTS

AFS and HTM Investments

The following table summarizes the amortized cost and estimated fair values of AFS and HTM securities, as of the dates indicated:



	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
March 31, 2019
AFS Investments (carried at fair value):
Obligations of states and political subdivisions	$	92,030	$	1,095	$	(105	)	$	93,020
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	453,980		1,290		(6,449		)	448,821
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	366,727		1,888		(7,215		)	361,400
Subordinated corporate bonds	20,398		672		—			21,070
Total AFS investments	$	933,135	$	4,945	$	(13,769	)	$	924,311
HTM Investments (carried at amortized cost):
Obligations of states and political subdivisions	$	1,306	$	21	$	(3	)	$	1,324
Total HTM investments	$	1,306	$	21	$	(3	)	$	1,324
December 31, 2018
AFS Investments (carried at fair value):
Obligations of states and political subdivisions	$	94,430	$	216	$	(894	)	$	93,752
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	466,613		583		(13,524		)	453,672
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	351,958		1,007		(10,071		)	342,894
Subordinated corporate bonds	20,398		23		(47		)	20,374
Total AFS investments	$	933,399	$	1,829	$	(24,536	)	$	910,692
HTM Investments (carried at amortized cost):
Obligations of states and political subdivisions	$	1,307	$	8	$	(24	)	$	1,291
Total HTM investments	$	1,307	$	8	$	(24	)	$	1,291

Net unrealized losses on AFS investments at March 31, 2019 included in AOCI amounted to $6.9 million, net of a deferred tax benefit of $1.9 million. Net unrealized losses on AFS investments at December 31, 2018 included in AOCI amounted to $17.8 million, net of a deferred tax benefit of $4.9 million.

For the three months ended March 31, 2019 and 2018, the Company purchased debt investments of $26.7 million and $50.1 million, respectively, all of which were designated as AFS investments.

Impaired AFS and HTM Investments:

Management periodically reviews the Company’s AFS and HTM investments to determine the cause, magnitude and duration of declines in the fair value of each security. Thorough evaluations of the causes of the unrealized losses are performed to determine whether the impairment is temporary or other-than-temporary in nature. Considerations such as the ability of the securities to meet cash flow requirements, levels of credit enhancements, risk of curtailment, and recoverability of invested amount over a reasonable period of time, and the length of time the security is in a loss position, for example, are applied in determining OTTI. Once a decline in value is determined to be other-than-temporary, the cost basis of the security is permanently reduced and a corresponding charge to earnings is recognized.

The following table presents the estimated fair values and gross unrealized losses on AFS and HTM investments that were in a continuous loss position at March 31, 2019 and December 31, 2018, by length of time that an individual security in each category has been in a continuous loss position:



	Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2019
AFS Investments:
Obligations of states and political subdivisions	$	2,017	$	—		$	9,941	$	(105	)	$	11,958	$	(105	)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	8,859		(46		)	347,541		(6,403		)	356,400		(6,449		)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	—		—			224,959		(7,215		)	224,959		(7,215		)
Total AFS investments	$	10,876	$	(46	)	$	582,441	$	(13,723	)	$	593,317	$	(13,769	)
HTM Investments:
Obligations of states and political subdivisions	$	—	$	—		$	426	$	(3	)	$	426	$	(3	)
Total HTM investments	$	—	$	—		$	426	$	(3	)	$	426	$	(3	)
December 31, 2018
AFS Investments:
Obligations of states and political subdivisions	$	36,218	$	(281	)	$	28,437	$	(613	)	$	64,655	$	(894	)
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	46,459		(252		)	364,430		(13,272		)	410,889		(13,524		)
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	5,956		(40		)	227,461		(10,031		)	233,417		(10,071		)
Subordinated corporate bonds	11,378		(26		)	966		(21		)	12,344		(47		)
Total AFS investments	$	100,011	$	(599	)	$	621,294	$	(23,937	)	$	721,305	$	(24,536	)
HTM Investments:
Obligations of states and political subdivisions	$	509	$	(5	)	$	411	$	(19	)	$	920	$	(24	)
Total HTM investments	$	509	$	(5	)	$	411	$	(19	)	$	920	$	(24	)

At March 31, 2019 and December 31, 2018, the Company held 192 and 302 debt investments classified as AFS and HTM with a fair value of $593.7 million and $722.2 million that were in an unrealized loss position totaling $13.8 million and $24.6 million, respectively, that were considered temporary. Of these, MBS and CMOs with a fair value of $572.5 million and $591.9 million were in an unrealized loss position, and have been in an unrealized loss position for 12 months or more, totaling $13.6 million and $23.3 million at March 31, 2019 and December 31, 2018, respectively. The unrealized loss was reflective of current interest rates in excess of the yield received on debt investments and is not indicative of an overall change in credit quality or other factors with the Company's AFS and HTM investment portfolio. At March 31, 2019 and December 31, 2018, gross unrealized losses on the Company's AFS and HTM investments were 2.3% and 3.4%, respectively, of their respective fair values.

The Company has the intent and ability to retain its debt investments in an unrealized loss position at March 31, 2019 until the decline in value has recovered.

Sale of AFS Investments:

For the three months ended March 31, 2019 and 2018, the Company did not sell any AFS investments.

AFS and HTM Investments Pledged:

At March 31, 2019 and December 31, 2018, AFS and HTM investments with an amortized cost of $679.0 million and $734.1 million and estimated fair values of $671.6 million and $714.4 million, respectively, were pledged to secure FHLBB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law.

Contractual Maturities:

The amortized cost and estimated fair values of the Company's AFS and HTM investments by contractual maturity at March 31, 2019, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Amortized Cost		Fair Value
AFS Investments
Due in one year or less	$	14,702	$	14,669
Due after one year through five years	68,822		67,998
Due after five years through ten years	241,455		240,454
Due after ten years	608,156		601,190
	$	933,135	$	924,311
HTM Investments
Due in one year or less	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	1,306		1,324
Due after ten years	—		—
	$	1,306	$	1,324

Other Investments

The following table summarizes the cost and estimated fair values of the Company's investment in equity securities, FHLBB stock and FRBB stock as presented within other investments on the consolidated statements of condition, as of the dates indicated:



	Cost		Unrealized Gains		Unrealized Losses		Fair Value / Carrying Value
March 31, 2019
Equity securities - bank stock (carried at fair value)	$	544	$	444	$	—	$	988
FHLBB (carried at cost)	4,880		—		—		4,880
FRB (carried at cost)	5,374		—		—		5,374
Total other investments	$	10,798	$	444	$	—	$	11,242
December 31, 2018
Equity securities - bank stock (carried at fair value)	$	544	$	202	$	—	$	746
FHLBB (carried at cost)	8,559		—		—		8,559
FRB (carried at cost)	5,374		—		—		5,374
Total other investments	$	14,477	$	202	$	—	$	14,679

For the three months ended March 31, 2019 and 2018, the Company recognized an unrealized gain (loss) of $242,000 and ($35,000), respectively, due to the change in fair value of its bank stock equity securities, which were presented within other income on the consolidated statements of income. For the three months ended March 31, 2018, a gain of $195,000 was recognized within other income on the consolidated statements of income upon sale of an investment.

The Company did not record any OTTI on its FHLBB and FRB stock for the three months ended March 31, 2019 and 2018. For the three months ended March 31, 2019 and 2018 the Company recorded dividend income from its investment in FHLBB and FRB stock of $230,000 and $286,000, respectively.