Note 2. Securities Available-for-Sale


	June 30, 2016								December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
							(in thousands)
U.S. Treasury	$	1,999	$	1	$	—	$	2,000	$	1,999	$	—	$	10	$	1,989
U.S. Government Sponsored Enterprises		15,000		24		—		15,024		—		—		—		—
SBA Backed Securities		45,698		31		24		45,705		5,983		8		2		5,989
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		280,931		434		488		280,877		232,967		859		300		233,526
Privately Issued Residential Mortgage-Backed Securities		1,301		2		17		1,286		1,437		10		13		1,434
Obligations Issued by States and Political Subdivisions		213,241		—		403		212,838		157,838		—		878		156,960
Other Debt Securities		5,100		—		158		4,942		4,600		3		130		4,473
Equity Securities		116		145		—		261		153		99		—		252

Total	$	563,386	$	637	$	1,090	$	562,933	$	404,977	$	979	$	1,333	$	404,623

Included in U.S. Government Sponsored Enterprise Securities and U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities are securities at fair value pledged to secure public deposits and repurchase agreements amounting to $220,489,000 and $220,482,000 at June 30, 2016 and December 31, 2015, respectively. Also included in securities available-for-sale are securities pledged for borrowing at the Federal Home Loan Bank of Boston amounting to $66,454,000 and $20,056,000 at June 30, 2016 and December 31, 2015, respectively. The Company realized gross gains of $33,000 from the proceeds of $1,946,000 from the sales of available-for-sale securities for the six months ended June 30, 2016. The Company realized gross gains of $118,000 from the proceeds of $21,215,000 from the sales of available-for-sale securities for the six months ended June 30, 2015.

Debt securities of Government Sponsored Enterprises primarily refer to debt securities of Fannie Mae and Freddie Mac.

The following table shows the maturity distribution of the Company’s securities available-for-sale at June 30, 2016.


	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	217,903	$	217,912
After one but within five years		232,419		232,311
After five but within ten years		105,748		105,767
More than 10 years		5,700		5,292
Non-maturing		1,616		1,651

Total	$	563,386	$	562,933

The weighted average remaining life of investment securities available-for-sale at June 30, 2016 was 3.5 years. Included in the weighted average remaining life calculation at June 30, 2016 were $15,000,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The contractual maturities, which were used in the table above, of mortgage-backed securities, will differ from the actual maturities, due to the ability of the issuers to prepay underlying obligations.

As of June 30, 2016 and December 31, 2015, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not more likely than not that it will be required to sell these debt securities before the anticipated recovery of its remaining amortized cost. In making its other-than-temporary impairment evaluation, the Company considered that the principal and interest on these securities are from issuers that are investment grade. The change in the unrealized losses on the state and municipal securities and the nonagency mortgage-backed securities was primarily caused by changes in credit spreads and liquidity issues in the marketplace.

The unrealized loss on U.S. Treasury, SBA Backed Securities, and U.S. Government Agency and Sponsored Enterprise Mortgage Backed Securities, related primarily to interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired.

In evaluating the underlying credit quality of a security, management considers several factors such as the credit rating of the obligor and the issuer, if applicable. Internal reviews of issuer financial statements are performed as deemed necessary. In the case of privately issued mortgage-backed securities, the performance of the underlying loans is analyzed as deemed necessary to determine the estimated future cash flows of the securities. Factors considered include the level of subordination, current and estimated future default rates, current and estimated prepayment rates, estimated loss severity rates, geographic concentrations and origination dates of underlying loans. In the case of marketable equity securities, the severity of the unrealized loss, the length of time the unrealized loss has existed, and the issuer’s financial performance are considered.

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at June 30, 2016. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for less than 12 months and a continuous loss position for 12 months or longer. There are 37 and 10 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 327 holdings at June 30, 2016.


	June 30, 2016
	Less than 12 months				12 months or longer				Total
Temporarily Impaired Investments	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
U.S. Treasury	$	—	$	—	$	—	$	—	$	—	$	—
SBA Backed Securities		10,959		24		—		—		10,959		24
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		127,281		372		27,894		116		155,175		488
Privately Issued Residential Mortgage-Backed Securities		415		2		467		15		882		17
Obligations Issued by States and Political Subdivisions		—		—		4,298		403		4,298		403
Other Debt Securities		1,553		47		1,789		111		3,342		158

Total temporarily impaired securities	$	140,208	$	445	$	34,448	$	645	$	174,656	$	1,090

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at December 31, 2015. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for less than 12 months and a continuous loss position for 12 months or longer. There are 14 and 11 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 290 holdings at December 31, 2015.


	December 31, 2015
	Less than 12 months				12 months or longer				Total
Temporarily Impaired Investments	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
U.S. Treasury	$	1,989	$	10	$	—	$	—	$	1,989	$	10
SBA Backed Securities		1,031		2		—		—		1,031		2
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		26,519		52		49,341		248		75,860		300
Privately Issued Residential Mortgage-Backed Securities		—		—		490		13		490		13
Obligations Issued by States and Political Subdivisions		—		—		3,820		878		3,820		878
Other Debt Securities		497		3		1,373		127		1,870		130

Total temporarily impaired securities	$	30,036	$	67	$	55,024	$	1,266	$	85,060	$	1,333