Note 2. Securities Available-for-Sale


	June 30, 2017								December 31, 2016
	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	$	—	$	4	$	1,995	$	2,000	$	—	$	—	$	2,000
U.S. Government Sponsored Enterprises		10,000		—		—		10,000		25,000		—		48		24,952
SBA Backed Securities		71,357		27		195		71,189		57,899		14		146		57,767
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		223,655		463		336		223,782		243,703		293		671		243,325
Privately Issued Residential Mortgage-Backed Securities		1,025		3		13		1,015		1,121		2		14		1,109
Obligations Issued by States and Political Subdivisions		98,457		—		408		98,049		165,281		—		405		164,876
Other Debt Securities		5,100		85		193		4,992		5,100		18		194		4,924
Equity Securities		116		202		—		318		116		228		—		344

Total	$	411,709	$	780	$	1,149	$	411,340	$	500,220	$	555	$	1,478	$	499,297

Included in SBA Backed Securities and 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 $ 173,235,000 and $210,780,000 at June 30, 2017 and December 31, 2016, respectively. Also included in securities available-for-sale are securities at fair value pledged for borrowing at the Federal Home Loan Bank of Boston amounting to $49,416,000 and $53,396,000 at June 30, 2017 and December 31, 2016, respectively. There were no sales of available-for-sale securities for the six months ended June 30, 2017. The Company realized gross gains of $33,000 from the proceeds of $1,946,000 from the sales of available-for-sales securities for the six months ended June 30, 2016.

Debt securities of U.S. Government Sponsored Enterprises and U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities 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, 2017.


	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	90,264	$	90,255
After one but within five years		132,716		132,786
After five but within ten years		105,344		105,360
More than 10 years		81,769		81,270
Non-maturing		1,616		1,669

Total	$	411,709	$	411,340

The weighted average remaining life of investment securities available-for-sale at June 30, 2017 was 5.4 years. Included in the weighted average remaining life calculation at June 30, 2017 were $10,000,000 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, 2017 and December 31, 2016, 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 unrealized loss on SBA Backed Securities, U.S. Government Agency and Sponsored Enterprise Mortgage Backed Securities, Obligations Issued by States and Political Subdivisions, and Other Debt 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, 2017. 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 13 and 27 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 269 holdings at June 30, 2017.


	June 30, 2017
	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	$	1,995	$	4	$	—	$	—	$	1,995	$	4
U.S. Government Sponsored Enterprises		—		—		—		—		—		—
SBA Backed Securities		27,850		116		17,775		79		45,625		195
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		36,251		83		66,121		253		102,372		336
Privately Issued Residential Mortgage-Backed Securities		—		—		707		13		707		13
Obligations Issued by States and Political Subdivisions		—		—		4,297		408		4,297		408
Other Debt Securities		—		—		1,907		193		1,907		193

Total temporarily impaired securities	$	66,096	$	203	$	90,807	$	946	$	156,903	$	1,149

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at December 31, 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 49 and 15 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 270 holdings at December 31, 2016.


Temporarily Impaired Investments	December 31, 2016
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
U.S. Government Sponsored Enterprises	$	24,952	$	48	$	—	$	—	$	24,952	$	48
SBA Backed Securities		52,346		145		951		1		53,297		146
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		135,612		485		31,504		186		167,116		671
Privately Issued Residential Mortgage-Backed Securities		—		—		757		14		757		14
Obligations Issued by States and Political Subdivisions		—		—		4,298		405		4,298		405
Other Debt Securities		453		47		1,553		147		2,006		194

Total temporarily impaired securities	$	213,363	$	725	$	39,063	$	753	$	252,426	$	1,478