10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017.

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-15752

CENTURY BANCORP, INC.

(Exact name of registrant as specified in its charter)

COMMONWEALTH OF MASSACHUSETTS	04-2498617
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
400 MYSTIC AVENUE, MEDFORD, MA	02155
(Address of principal executive offices)	(Zip Code)

(781) 391-4000

(Registrant’s telephone number, including area code)

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), (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ☒  Yes    ☐  No

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

(Check one):

Large accelerated filer	☐		Accelerated filer	☒
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes    ☒  No

As of October 31, 2017, the Registrant had outstanding:

Class A Common Stock, $1.00 par value	3,605,829 Shares
Class B Common Stock, $1.00 par value	1,962,080 Shares

Century Bancorp, Inc.

	Index	Page Number
Part I	Financial Information
	Forward Looking Statements		1
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets: September  30, 2017 and December 31, 2016		2
	Consolidated Statements of Income: Three Months and Nine Months Ended September 30, 2017 and 2016		3
	Consolidated Statements of Comprehensive Income: Three Months and Nine Months Ended September 30, 2017 and 2016		4
	Consolidated Statements of Changes in Stockholders’ Equity: Nine Months Ended September 30, 2017 and 2016		5
	Consolidated Statements of Cash Flows: Nine Months Ended September 30, 2017 and 2016		6
	Notes to Consolidated Financial Statements		7 - 29
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		29 -41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		41
Item 4.	Controls and Procedures		41
Part II.	Other Information
Item 1.	Legal Proceedings		42
Item 1A.	Risk Factors		42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 3.	Defaults Upon Senior Securities		42
Item 4.	Mine Safety Disclosures		42
Item 5.	Other Information		42
Item 6.	Exhibits		42 - 43
Signatures			44
Exhibits	Ex-31.1
	Ex-31.2
	Ex-32.1
	Ex-32.2
	Ex-101 Instance Document
	Ex-101 Schema Document
	Ex-101 Calculation Linkbase Document
	Ex-101 Labels Linkbase Document
	Ex-101 Presentation Linkbase Document
	Ex-101 Definition Linkbase Document

Forward Looking Statements

Except for the historical information contained herein, this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, including, without limitation, (i) the fact that the Company’s success is dependent to a significant extent upon general economic conditions in New England, (ii) the fact that the Company’s earnings depend to a great extent upon the level of net interest income (the difference between interest income earned on loans and investments and the interest expense paid on deposits and other borrowings) generated by the Bank and thus the Bank’s results of operations may be adversely affected by increases or decreases in interest rates, (iii) the fact that the banking business is highly competitive and the profitability of the Company depends upon the Bank’s ability to attract loans and deposits within its market area, where the Bank competes with a variety of traditional banking and other institutions such as credit unions and finance companies, and (iv) the fact that a significant portion of the Company’s loan portfolio is comprised of commercial loans, exposing the Company to the risks inherent in loans based upon analyses of credit risk, the value of underlying collateral, including real estate, and other more intangible factors, which are considered in making commercial loans. Accordingly, the Company’s profitability may be negatively impacted by errors in risk analyses, and by loan defaults, and the ability of certain borrowers to repay such loans may be adversely affected by any downturn in general economic conditions. These factors, as well as general economic and market conditions, may materially and adversely affect the market price of shares of the Company’s common stock. Because of these and other factors, past financial performance should not be considered an indicator of future performance. The forward-looking statements contained herein represent the Company’s judgment as of the date of this Form 10-Q, and the Company cautions readers not to place undue reliance on such statements.

Page 1 of 44

PART I - Item 1

Century Bancorp, Inc.

Consolidated Balance Sheets (unaudited)

(In thousands, except share data)

	September 30, 2017			December 31, 2016
Assets
Cash and due from banks	$	57,921		$	62,400
Federal funds sold and interest-bearing deposits in other banks		195,212			173,751
Total cash and cash equivalents		253,133			236,151
Short-term investments		—			3,183
Securities available-for-sale, amortized cost $388,004 and $500,220, respectively		387,790			499,297
Securities held-to-maturity, fair value $1,637,497 and $ 1,635,808, respectively		1,654,908			1,653,986
Federal Home Loan Bank of Boston, stock at cost		21,937			21,042
Loans, net:
Construction and land development		16,779			14,928
Commercial and industrial		702,646			612,503
Municipal		128,412			135,418
Commercial real estate		735,844			696,173
Residential real estate		272,588			241,357
Consumer and other		18,594			11,013
Home equity		237,094			211,857
Overdrafts		690			684
Total loans, net		2,112,647			1,923,933
Less: allowance for loan losses		25,698			24,406
Net loans		2,086,949			1,899,527
Bank premises and equipment		23,932			23,417
Accrued interest receivable		9,926			9,645
Goodwill		2,714			2,714
Other assets		116,783			113,646
Total assets	$	4,558,072		$	4,462,608
Liabilities
Deposits:
Demand deposits	$	702,527		$	689,286
Savings and NOW deposits		1,276,135			1,304,394
Money market accounts		1,019,741			1,181,179
Time deposits		607,279			478,359
Total deposits		3,605,682			3,653,218
Securities sold under agreements to repurchase		228,848			182,280
Other borrowed funds		358,000			293,000
Subordinated debentures		36,083			36,083
Due to broker		5,911			—
Other liabilities		60,900			57,986
Total liabilities		4,295,424			4,222,567
Stockholders’ Equity
Preferred Stock – $1.00 par value; 100,000 shares authorized; no shares issued and outstanding		—			—
Common stock, Class A, $1.00 par value per share; authorized 10,000,000 shares; issued 3,605,829 shares and 3,600,729 shares, respectively		3,606			3,601
Common stock, Class B, $1.00 par value per share; authorized 5,000,000 shares; issued 1,962,080 shares and 1,967,180 shares respectively		1,962			1,967
Additional paid-in capital		12,292			12,292
Retained earnings		264,191			243,565
		282,051			261,425
Unrealized losses on securities available-for-sale, net of taxes		(140	)		(567	)
Unrealized losses on securities transferred to held-to-maturity, net of taxes		(3,228	)		(4,084	)
Pension liability, net of taxes		(16,035	)		(16,733	)
Total accumulated other comprehensive loss, net of taxes		(19,403	)		(21,384	)
Total stockholders’ equity		262,648			240,041
Total liabilities and stockholders’ equity	$	4,558,072		$	4,462,608

See accompanying notes to unaudited consolidated interim financial statements.

Page 2 of 44

Century Bancorp, Inc.

Consolidated Statements of Income (unaudited)

(In thousands, except share data)

	Three months ended September 30,					Nine months ended September 30,
	2017		2016			2017		2016
Interest income
Loans	$	16,658	$	15,045		$	48,668	$	43,380
Securities held-to-maturity		9,447		8,238			28,806		24,178
Securities available-for-sale		1,809		1,439			5,143		3,546
Federal funds sold and interest-bearing deposits in other banks		607		283			1,349		906
Total interest income		28,521		25,005			83,966		72,010
Interest expense
Savings and NOW deposits		1,727		1,083			4,454		2,859
Money market accounts		1,395		909			3,903		2,485
Time deposits		2,095		1,464			5,648		4,216
Securities sold under agreements to repurchase		129		122			352		363
Other borrowed funds and subordinated debentures		1,822		2,213			5,695		6,767
Total interest expense		7,168		5,791			20,052		16,690
Net interest income		21,353		19,214			63,914		55,320
Provision for loan losses		450		375			1,340		1,175
Net interest income after provision for loan losses		20,903		18,839			62,574		54,145
Other operating income
Service charges on deposit accounts		2,089		1,983			6,179		5,882
Lockbox fees		735		759			2,367		2,431
Net gains on sales of securities		47		19			47		64
Gains on sales of mortgage loans		—		533			370		1,331
Other income		1,071		931			3,179		2,814
Total other operating income		3,942		4,225			12,142		12,522
Operating expenses
Salaries and employee benefits		10,282		10,544			32,144		30,360
Occupancy		1,427		1,509			4,663		4,639
Equipment		782		772			2,245		2,087
FDIC assessments		340		343			1,218		1,503
Other		3,374		3,462			10,857		10,012
Total operating expenses		16,205		16,630			51,127		48,601
Income before income taxes		8,640		6,434			23,589		18,066
Provision for income taxes		617		(52	)		1,313		32
Net income	$	8,023	$	6,486		$	22,276	$	18,034
Share data:
Weighted average number of shares outstanding, basic
Class A		3,605,829		3,600,729			3,603,429		3,600,729
Class B		1,962,080		1,967,180			1,964,480		1,967,180
Weighted average number of shares outstanding, diluted
Class A		5,567,909		5,567,909			5,567,909		5,567,909
Class B		1,962,080		1,967,180			1,964,480		1,967,180
Basic earnings per share:
Class A	$	1.75	$	1.41		$	4.86	$	3.93
Class B	$	0.87	$	0.71		$	2.43	$	1.97
Diluted earnings per share
Class A	$	1.44	$	1.16		$	4.00	$	3.24
Class B	$	0.87	$	0.71		$	2.43	$	1.97

See accompanying notes to unaudited consolidated interim financial statements.

Page 3 of 44

Century Bancorp, Inc.

Consolidated Statements of Comprehensive Income (unaudited)

(In thousands)

	Three months ended September 30,
	2017			2016
Net income	$	8,023		$	6,486
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities:
Unrealized (losses) gains arising during period		122			(98	)
Less: reclassification adjustment for gains included in net income		(28	)		(12	)
Total unrealized (losses) gains on securities		94			(110	)
Accretion of net unrealized losses transferred		223			527
Defined benefit pension plans:
Amortization of prior service cost and loss included in net periodic benefit cost		233			242
Other comprehensive income		550			659
Comprehensive income	$	8,573		$	7,145
	Nine months ended September 30,
	2017			2016
Net income	$	22,276		$	18,034
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities:
Unrealized (losses) gains arising during period		455			(109	)
Less: reclassification adjustment for gains included in net income		(28	)		(39	)
Total unrealized (losses) gains on securities		427			(148	)
Accretion of net unrealized losses transferred		856			2,274
Defined benefit pension plans:
Amortization of prior service cost and loss included in net periodic benefit cost		698			727
Other comprehensive income		1,981			2,853
Comprehensive income	$	24,257		$	20,887

See accompanying notes to unaudited consolidated interim financial statements.

Page 4 of 44

Century Bancorp, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

For the Nine Months Ended September 30, 2017 and 2016

	Class A Common Stock		Class B Common Stock			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	(In thousands)
Balance at December 31, 2015	$	3,601	$	1,967		$	12,292	$	221,232		$	(24,548	)	$	214,544
Net income		—		—			—		18,034			—			18,034
Other comprehensive income, net of tax:
Unrealized holding (losses) gains arising during period, net of $128 in taxes and $64 in realized gains		—		—			—		—			(148	)		(148	)
Accretion of unrealized losses on securities transferred to held-to-maturity, net of $1,216 in taxes		—		—			—		—			2,274			2,274
Pension liability adjustment, net of $484 in taxes		—		—			—		—			727			727
Cash dividends paid, Class A common stock, $.36 per share		—		—			—		(1,296	)		—			(1,296	)
Cash dividends paid, Class B common stock, $.18 per share		—		—			—		(354	)		—			(354	)
Balance at September 30, 2016	$	3,601	$	1,967		$	12,292	$	237,616		$	(21,695	)	$	233,781
Balance at December 31, 2016	$	3,601	$	1,967		$	12,292	$	243,565		$	(21,384	)	$	240,041
Net income		—		—			—		22,276			—			22,276
Other comprehensive income, net of tax:
Unrealized holding (losses) gains arising during period, net of $282 in taxes and $47 in realized gains		—		—			—		—			427			427
Accretion of unrealized losses on securities transferred to held-to-maturity, net of $1,022 in taxes		—		—			—		—			856			856
Pension liability adjustment, net of $465 in taxes		—		—			—		—			698			698
Conversion of Class B Common Stock to Class A Common Stock, 5,100 shares		5		(5	)		—		—			—			—
Cash dividends paid, Class A common stock, $.36 per share		—		—			—		(1,297	)		—			(1,297	)
Cash dividends paid, Class B common stock, $.18 per share		—		—			—		(353	)		—			(353	)
Balance at September 30, 2017	$	3,606	$	1,962		$	12,292	$	264,191		$	(19,403	)	$	262,648

See accompanying notes to unaudited consolidated interim financial statements.

Page 5 of 44

Century Bancorp, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

For the Nine Months Ended September 30, 2017 and 2016

	Nine months ended September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	22,276		$	18,034
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Gain on sales of mortgage loans		(370	)		(1,331	)
Net gains on sales of securities		(47	)		(64	)
Provision for loan losses		1,340			1,175
Deferred income taxes		(3,477	)		(3,143	)
Net depreciation and amortization		2,444			2,498
(Increase) decrease in accrued interest receivable		(281	)		405
Increase in other assets		(1,478	)		(3,877	)
Increase in other liabilities		4,076			3,484
Net cash provided by operating activities		24,483			17,181
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds (purchase) of short-term investments		3,183			(8	)
Proceeds from redemptions of Federal Home Loan Bank of Boston stock		7,175			10,276
Purchase of Federal Home Loan Bank of Boston stock		(8,070	)		(2,617	)
Proceeds from calls/maturities of securities available-for-sale		211,576			206,025
Proceeds from sales of securities available-for-sale		18,133			2,376
Purchase of securities available-for-sale		(111,777	)		(328,565	)
Proceeds from calls/maturities of securities held-to-maturity		231,953			318,815
Proceeds from sales of securities held-to-maturity		—			192
Purchase of securities held-to-maturity		(230,813	)		(441,756	)
Net increase in loans		(215,063	)		(182,901	)
Proceeds from sales of portfolio loans		26,701			74,668
Capital expenditures		(2,881	)		(1,408	)
Net cash used in investing activities		(69,883	)		(344,903	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in time deposits		128,920			(18,795	)
Net (decrease) increase in demand, savings, money market and NOW deposits		(176,456	)		404,848
Cash dividends		(1,650	)		(1,650	)
Net increase in securities sold under agreements to repurchase		46,568			16,470
Net increase (decrease) in other borrowed funds		65,000			(75,000	)
Net cash provided by financing activities		62,382			325,873
Net increase (decrease) in cash and cash equivalents		16,982			(1,849	)
Cash and cash equivalents at beginning of period		236,151			220,724
Cash and cash equivalents at end of period	$	253,133		$	218,875
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	20,055		$	16,806
Income taxes		4,830			2,730
Change in unrealized gains (losses) on securities available-for-sale, net of taxes		427			(148	)
Change in unrealized losses on securities transferred to held-to-maturity, net of taxes		856			2,274
Pension liability adjustment, net of taxes		698			727
Change in due to (from) to broker		5,911			1,847

See accompanying notes to unaudited consolidated interim financial statements.

Page 6 of 44

Century Bancorp, Inc.

Notes to Unaudited Consolidated Interim Financial Statements

Nine Months Ended September 30, 2017 and 2016

Note 1. Basis of Financial Statement Presentation

The consolidated financial statements include the accounts of Century Bancorp, Inc. (the “Company”) and its wholly owned subsidiary, Century Bank and Trust Company (the “Bank”). The consolidated financial statements also include the accounts of the Bank’s wholly owned subsidiaries, Century Subsidiary Investments, Inc. (“CSII”), Century Subsidiary Investments, Inc. II (“CSII II”), Century Subsidiary Investments, Inc. III (“CSII III”) and Century Financial Services Inc. (“CFSI”). CSII, CSII II, and CSII III are engaged in buying, selling and holding investment securities. CFSI has the power to engage in financial agency, securities brokerage, and investment and financial advisory services and related securities credit. The Company also owns 100% of Century Bancorp Capital Trust II (“CBCT II”). The entity is an unconsolidated subsidiary of the Company.

All significant intercompany accounts and transactions have been eliminated in consolidation. The Company provides a full range of banking services to individual, business and municipal customers in Massachusetts, New Hampshire, Rhode Island, Connecticut, and New York. As a bank holding company, the Company is subject to the regulation and supervision of the Federal Reserve Board. The Bank, a state chartered financial institution, is subject to supervision and regulation by applicable state and federal banking agencies, including the Federal Reserve Board, the Federal Deposit Insurance Corporation (the “FDIC”) and the Commonwealth of Massachusetts Commissioner of Banks. The Bank is also subject to various requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered. Various consumer laws and regulations also affect the operations of the Bank. In addition to the impact of regulation, commercial banks are affected significantly by the actions of the Federal Reserve Board as it attempts to control the money supply and credit availability in order to influence the economy. All aspects of the Company’s business are highly competitive. The Company faces aggressive competition from other lending institutions and from numerous other providers of financial services. The Company has one reportable operating segment.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and general practices within the banking industry. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ from those estimates. The Company’s quarterly report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the Securities and Exchange Commission.

Material estimates that are susceptible to change in the near term relate to the allowance for loan losses. Management believes that the allowance for loan losses is adequate based on independent appraisals and review of other factors, including historical charge-off rates with additional allocations based on risk factors for each category and general economic factors. While management uses available information to recognize loan losses, future additions to the allowance for loan losses may be necessary based on changes in economic conditions. In addition, regulatory agencies periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination. Certain reclassifications are made to prior-year amounts whenever necessary to conform with the current-year presentation.

Page 7 of 44

Note 2. Securities Available-for-Sale

	September 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	$	—	$	5	$	1,994	$	2,000	$	—	$	—	$	2,000
U.S. Government Sponsored Enterprises		—		—		—		—		25,000		—		48		24,952
SBA Backed Securities		80,906		40		182		80,764		57,899		14		146		57,767
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		219,268		504		269		219,503		243,703		293		671		243,325
Privately Issued Residential Mortgage-Backed Securities		960		4		10		954		1,121		2		14		1,109
Obligations Issued by States and Political Subdivisions		79,655		—		410		79,245		165,281		—		405		164,876
Other Debt Securities		5,100		76		189		4,987		5,100		18		194		4,924
Equity Securities		116		227		—		343		116		228		—		344
Total	$	388,004	$	851	$	1,065	$	387,790	$	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 $165,178,000 and $210,780,000 at September 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 $49,248,000 and $53,396,000 at September 30, 2017 and December 31, 2016, respectively. The Company realized gross gains of $47,000 from the proceeds of $18,133,000 from the sales of available-for-sale securities for the nine months ended September 30, 2017. The Company realized gross gains of $52,000 from the proceeds of $2,376,000 from the sales of available-for-sales securities for the nine months ended September 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 September 30, 2017.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	68,921	$	68,915
After one but within five years		126,680		126,824
After five but within ten years		96,671		96,759
More than 10 years		94,116		93,597
Non-maturing		1,616		1,695
Total	$	388,004	$	387,790

The weighted average remaining life of investment securities available-for-sale at September 30, 2017 was 5.8 years. 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.

Page 8 of 44

As of September 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 U.S. Treasury, SBA Backed Securities, U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities, Privately Issued Residential 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 September 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 10 and 29 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 246 holdings at September 30, 2017.

	September 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	$	1,994	$	5	$	—	$	—	$	1,994	$	5
U.S. Government Sponsored Enterprises		—		—		—		—		—		—
SBA Backed Securities		10,561		28		44,789		154		55,350		182
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		30,914		77		59,918		192		90,832		269
Privately Issued Residential Mortgage-Backed Securities		—		—		671		10		671		10
Obligations Issued by States and Political Subdivisions		—		—		4,297		410		4,297		410
Other Debt Securities		399		1		1,812		188		2,211		189
Total temporarily impaired securities	$	43,868	$	111	$	111,487	$	954	$	155,355	$	1,065

Page 9 of 44

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.

	December 31, 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. 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

Note 3. Investment Securities Held-to-Maturity

	September 30, 2017								December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in thousands)
U.S. Government Sponsored Enterprises	$	114,527	$	828	$	281	$	115,074	$	148,326	$	1,066	$	527	$	148,865
SBA Backed Securities		58,844		3		1,003		57,844		46,140		—		1,088		45,052
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities		1,481,537		4,970		21,928		1,464,579		1,459,520		4,948		22,577		1,441,891
Total	$	1,654,908	$	5,801	$	23,212	$	1,637,497	$	1,653,986	$	6,014	$	24,192	$	1,635,808

Included in U.S. Government and Agency Securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $1,221,518,000 and $1,147,207,000 at September 30, 2017 and December 31, 2016, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank of Boston at fair value amounting to $291,330,000 and $424,353,000 at September 30, 2017 and December 31, 2016, respectively. There were no sales of held-to-maturity securities for the nine months ended September 30, 2017. The Company realized gross gains of $12,000 from the proceeds of $192,000 from the sales of securities held-to-maturity for the nine months ended September 30, 2016. The sales of securities held-to-maturity relate to certain mortgage backed securities for which the Company had previously collected a substantial portion of its principal investment.

At September 30, 2017 and December 31, 2016, all mortgage-backed securities are obligations of U.S. Government Agencies and Government Sponsored Enterprises. 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.

Page 10 of 44

The following table shows the maturity distribution of the Company’s securities held-to-maturity at September 30, 2017.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	39,780	$	39,804
After one but within five years		1,219,826		1,208,388
After five but within ten years		392,012		386,114
More than ten years		3,290		3,191
Total	$	1,654,908	$	1,637,497

The weighted average remaining life of investment securities held-to-maturity at September 30, 2017 was 4.2 years. Included in the weighted average remaining life calculation at September 30, 2017 were $20,496,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The actual maturities, which were used in the table above, of mortgage-backed securities, will differ from the contractual maturities, due to the ability of the issuers to prepay underlying obligations.

As of September 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 likely that it will be required to sell these debt securities before the anticipated recovery of their remaining amortized costs. In making its other-than-temporary impairment evaluation, the Company considered the fact that the principal and interest on these securities are from issuers that are investment grade.

The unrealized loss on U.S. Government Sponsored Enterprises, 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 does not intend to sell any of these securities and it is not likely that it will be required to sell these securities before the anticipated recovery of the remaining amortized cost, the Company does not consider these investments to be other-than-temporarily impaired September 30, 2017 and December 31, 2016.

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.

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at

September 30, 2017. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months or longer. There are 129 and 88 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 392 holdings at September 30, 2017.

	September 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. Government Sponsored Enterprises	$	35,226	$	270	$	4,989	$	11	$	40,215	$	281
SBA Backed Securities		45,551		659		9,275		344		54,826		1,003
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		652,183		9,601		431,094		12,327		1,083,277		21,928
Total temporarily impaired securities	$	732,960	$	10,530	$	445,358	$	12,682	$	1,178,318	$	23,212

Page 11 of 44

The following table shows the temporarily impaired securities of the Company’s held-to-maturity 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 194 and 16 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 375 holdings at December 31, 2016.

	December 31, 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. Government Sponsored Enterprises	$	59,219	$	527	$	—	$	—	$	59,219	$	527
SBA Backed Securities		45,052		1,088		—		—		45,052		1,088
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		1,008,960		20,725		58,535		1,852		1,067,495		22,577
Total temporarily impaired securities	$	1,113,231	$	22,340	$	58,535	$	1,852	$	1,171,766	$	24,192

Note 4. Allowance for Loan Losses

The Company maintains an allowance for loan losses in an amount determined by management on the basis of the character of the loans, loan performance, financial condition of borrowers, the value of collateral securing loans and other relevant factors.

The following table summarizes the changes in the Company’s allowance for loan losses for the periods indicated.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
	(in thousands)
Allowance for loan losses, beginning of period	$	25,289		$	23,863		$	24,406		$	23,075
Loans charged off		(95	)		(118	)		(292	)		(298	)
Recoveries on loans previously charged-off		54			93			244			345
Net recoveries (charge-offs)		(41	)		(25	)		(48	)		47
Provision charged to expense		450			375			1,340			1,175
Reclassification to other liabilities *		—			(5	)		—			(89	)
Allowance for loan losses, end of period	$	25,698		$	24,208		$	25,698		$	24,208

* The reclassification relates to allowance for loan loss allocations on unused commitments that have been reclassified to other liabiliites.

Page 12 of 44

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2017 follows:

	Construction and Land Development		Commercial and Industrial			Municipal		Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at June 30, 2017	$	1,137	$	7,563		$	1,859	$	11,028		$	2,118		$	195		$	1,146		$	243		$	25,289
Charge-offs		—		(20	)		—		—			—			(75	)		—			—			(95	)
Recoveries		—		9			—		—			—			45			—			—			54
Provision		323		1,297			265		(1,491	)		(45	)		220			(103	)		(16	)		450
Ending balance at September 30, 2017	$	1,460	$	8,849		$	2,124	$	9,537		$	2,073		$	385		$	1,043		$	227		$	25,698
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	8		$	—	$	111		$	67		$	—		$	—		$	—		$	186
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,460	$	8,841		$	2,124	$	9,426		$	2,006		$	385		$	1,043		$	227		$	25,512
Loans:
Ending balance	$	16,779	$	702,646		$	128,412	$	735,844		$	272,588		$	19,284		$	237,094		$	—		$	2,112,647
Loans deemed to be impaired	$	—	$	366		$	—	$	2,583		$	4,318		$	—		$	—		$	—		$	7,267
Loans not deemed to be impaired	$	16,779	$	702,280		$	128,412	$	733,261		$	268,270		$	19,284		$	237,094		$	—		$	2,105,380
Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2017 follows:
	Construction and Land Development		Commercial and Industrial			Municipal		Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at December 31, 2016	$	1,012	$	6,972		$	1,612	$	11,135		$	1,698		$	582		$	1,102		$	293		$	24,406
Charge-offs		—		(49	)		—		—			—			(243	)		—			—			(292	)
Recoveries		—		63			—		—			2			179			—			—			244
Provision		448		1,863			512		(1,598	)		373			(133	)		(59	)		(66	)		1,340
Ending balance at September 30, 2017	$	1,460	$	8,849		$	2,124	$	9,537		$	2,073		$	385		$	1,043		$	227		$	25,698
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	8		$	—	$	111		$	67		$	—		$	—		$	—		$	186
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,460	$	8,841		$	2,124	$	9,426		$	2,006		$	385		$	1,043		$	227		$	25,512
Loans:
Ending balance	$	16,779	$	702,646		$	128,412	$	735,844		$	272,588		$	19,284		$	237,094		$	—		$	2,112,647
Loans deemed to be impaired	$	—	$	366		$	—	$	2,583		$	4,318		$	—		$	—		$	—		$	7,267
Loans not deemed to be impaired	$	16,779	$	702,280		$	128,412	$	733,261		$	268,270		$	19,284		$	237,094		$	—		$	2,105,380

During the nine months ending September 30, 2017, the Company’s provision was primarily attributable to an increase in commercial and industrial, construction and land development, and residential real estate balances offset, somewhat, by changes in historical loss rates and qualitative factors. During the three months ending September 30, 2017 the Company’s provision was primarily attributable to an increase in commercial and industrial loan balances offset, somewhat, by changes in historical loss rates and qualitative factors.

Page 13 of 44

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2016 follows:

	Construction and Land Development			Commercial and Industrial			Municipal			Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at June 30, 2016	$	2,234		$	5,842		$	1,801		$	10,650		$	1,302		$	608		$	1,158		$	268		$	23,863
Charge-offs		—			—			—			—			—			(91	)		(27	)		—			(118	)
Recoveries		—			24			—			—			2			67			—			—			93
Provision		(3	)		307			(29	)		(752	)		624			5			155			68			375
Reclassification to other liabilities		—			—			—			—			—			—			(5	)		—			(5	)
Ending balance at September 30, 2016	$	2,231		$	6,173		$	1,772		$	9,898		$	1,928		$	589		$	1,281		$	336		$	24,208
Amount of allowance for loan losses for loans deemed to be impaired	$	4		$	9		$	—		$	143		$	7		$	—		$	—		$	—		$	163
Amount of allowance for loan losses for loans not deemed to be impaired	$	2,227		$	6,164		$	1,772		$	9,755		$	1,921		$	589		$	1,281		$	336		$	24,045
Loans:
Ending balance	$	19,522		$	549,290		$	145,063		$	692,778		$	222,881		$	11,474		$	200,085		$	—		$	1,841,093
Loans deemed to be impaired	$	95		$	399		$	—		$	3,707		$	208		$	—		$	—		$	—		$	4,409
Loans not deemed to be impaired	$	19,427		$	548,891		$	145,063		$	689,071		$	222,673		$	11,474		$	200,085		$	—		$	1,836,684
Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2016 follows:
	Construction and Land Development			Commercial and Industrial			Municipal			Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at December 31, 2015	$	2,041		$	5,899		$	994		$	10,589		$	1,320		$	644		$	1,077		$	511		$	23,075
Charge-offs		—			—			—			—			—			(271	)		(27	)		—			(298	)
Recoveries		—			115			—			—			5			225			—			—			345
Provision		193			188			778			(680	)		605			(6	)		272			(175	)		1,175
Reclassification to other liabilities		(3	)		(29	)		—			(11	)		(2	)		(3	)		(41	)		—			(89	)
Ending balance at September 30, 2016	$	2,231		$	6,173		$	1,772		$	9,898		$	1,928		$	589		$	1,281		$	336		$	24,208
Amount of allowance for loan losses for loans deemed to be impaired	$	4		$	9		$	—		$	143		$	7		$	—		$	—		$	—		$	163
Amount of allowance for loan losses for loans not deemed to be impaired	$	2,227		$	6,164		$	1,772		$	9,755		$	1,921		$	589		$	1,281		$	336		$	24,045
Loans:
Ending balance	$	19,522		$	549,290		$	145,063		$	692,778		$	222,881		$	11,474		$	200,085		$	—		$	1,841,093
Loans deemed to be impaired	$	95		$	399		$	—		$	3,707		$	208		$	—		$	—		$	—		$	4,409
Loans not deemed to be impaired	$	19,427		$	548,891		$	145,063		$	689,071		$	222,673		$	11,474		$	200,085		$	—		$	1,836,684

During the nine months ending September 30, 2016, the Company’s provision was primarily attributable to an increase in municipal and residential real estate balances, offset, somewhat by changes in historical loss and qualitative factors. During the three months ending September 30, 2016 the Company’s provision was primarily attributable to an increase in commercial and industrial loan balances.

Page 14 of 44

The Company utilizes a six grade internal loan rating system for commercial real estate, construction and commercial loans as follows:

Loans rated 1-3 (Pass):

Loans in this category are considered “pass” rated loans with low to average risk.

Loans rated 4 (Monitor):

These loans represent classified loans that management is closely monitoring for credit quality. These loans have had or may have minor credit quality deterioration as of September 30, 2017 and December 31, 2016.

Loans rated 5 (Substandard):

Substandard loans represent classified loans that management is closely monitoring for credit quality. These loans have had more significant credit quality deterioration as of September 30, 2017 and December 31, 2016.

Loans rated 6 (Doubtful):

Doubtful loans represent classified loans that management is closely monitoring for credit quality. These loans had more significant credit quality deterioration as of September 30, 2017 and December 31, 2016 and are doubtful for full collection.

Impaired:

Impaired loans represent classified loans that management is closely monitoring for credit quality. A loan is classified as impaired when it is probable that the Company will be unable to collect all amounts due.

The following table presents the Company’s loans by risk rating at September 30, 2017.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	16,779	$	696,934	$	128,412	$	708,558
4 (Monitor)		—		5,346		—		24,703
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		366		—		2,583
Total	$	16,779	$	702,646	$	128,412	$	735,844

The following table presents the Company’s loans by risk rating at December 31, 2016.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	14,834	$	612,114	$	135,418	$	661,271
4 (Monitor)		—		—		—		31,753
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		94		389		—		3,149
Total	$	14,928	$	612,503	$	135,418	$	696,173

Page 15 of 44

The Company has increased its exposure to larger loans to large institutions with publically available credit ratings beginning in 2015. These ratings are tracked as a credit quality indicator for these loans. Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at September 30, 2017 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	365,441	$	62,657	$	45,371	$	473,469
A1 – A3		247,253		7,770		128,743		383,766
Baa1 – Baa3		—		46,970		124,932		171,902
Ba2		—		8,165		—		8,165
Total	$	612,694	$	125,562	$	299,046	$	1,037,302

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2016.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	334,674	$	66,245	$	6,596	$	407,515
A1 – A3		188,777		33,365		129,423		351,565
Baa1 – Baa3		—		26,970		127,366		154,336
Ba2		—		3,610		—		3,610
Total	$	523,451	$	130,190	$	263,385	$	917,026

The Company utilized payment performance as credit quality indicators for the loan types listed below. The indicators are depicted in the table “aging of past due loans,” below.

Further information pertaining to the allowance for loan losses at September 30, 2017 follows:

	Accruing 30-89 Days Past Due		Non Accrual		Accruing Greater than 90 Days		Total Past Due		Current Loans		Total
	(in thousands)
Construction and land development	$	—	$	—	$	—	$	—	$	16,779	$	16,779
Commercial and industrial		159		55		—		214		702,432		702,646
Municipal		—		—		—		—		128,412		128,412
Commercial real estate		611		225		—		836		735,008		735,844
Residential real estate		237		670		—		907		271,681		272,588
Consumer and overdrafts		11		—		—		11		19,273		19,284
Home equity		1,032		648		—		1,680		235,414		237,094
Total	$	2,050	$	1,598	$	—	$	3,648	$	2,108,999	$	2,112,647

Page 16 of 44

Further information pertaining to the allowance for loan losses at December 31, 2016 follows:

	Accruing 30-89 Days Past Due		Non Accrual		Accruing Greater than 90 Days		Total Past Due		Current Loans		Total
	(in thousands)
Construction and land development	$	—	$	94	$	—	$	94	$	14,834	$	14,928
Commercial and industrial		37		65		—		102		612,401		612,503
Municipal		—		—		—		—		135,418		135,418
Commercial real estate		597		150		—		747		695,426		696,173
Residential real estate		245		656		—		901		240,456		241,357
Consumer and overdrafts		—		11		—		11		11,686		11,697
Home equity		735		108		—		843		211,014		211,857
Total	$	1,614	$	1,084	$	—	$	2,698	$	1,921,235	$	1,923,933

A loan is impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. When a loan is impaired, the Company measures impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except that as a practical expedient, the Company measures impairment based on a loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Loans are charged-off when management believes that the collectability of the loan’s principal is not probable. The specific factors that management considers in making the determination that the collectability of the loan’s principal is not probable include: the delinquency status of the loan, the fair value of the collateral, if secured, and the financial strength of the borrower and/or guarantors. For collateral dependent loans, the amount of the recorded investment in a loan that exceeds the fair value of the collateral is charged-off against the allowance for loan losses in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible. The Company’s policy for recognizing interest income on impaired loans is contained within Note 1 of the consolidated financial statements contained in the Company’s Annual Report for the fiscal year ended December 31, 2016.

Page 17 of 44

The following is information pertaining to impaired loans for September 30, 2017:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/17		Interest Income Recognized for 3 Months Ending 9/30/17		Average Carrying Value for 9 Months Ending 9/30/17		Interest Income Recognized for 9 Months Ending 9/30/17
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		54		261		—		60		—		49		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		91		109		—		45		—		313		—
Residential real estate		72		163		—		75		2		81		5
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	217	$	533	$	—	$	180	$	2	$	443	$	5
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	56	$	—
Commercial and industrial		312		328		8		319		4		328		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,492		2,599		111		2,547		22		2,542		69
Residential real estate		4,246		4,247		67		4,257		19		1,767		36
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	7,050	$	7,174	$	186	$	7,123	$	45	$	4,693	$	117
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	56	$	—
Commercial and industrial		366		589		8		379		4		377		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,583		2,708		111		2,592		22		2,855		69
Residential real estate		4,318		4,410		67		4,332		21		1,848		41
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	7,267	$	7,707	$	186	$	7,303	$	47	$	5,136	$	122

Page 18 of 44

The following is information pertaining to impaired loans for September 30, 2016:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/16		Interest Income Recognized for 3 Months Ending 9/30/16		Average Carrying Value for 9 Months Ending 9/30/16		Interest Income Recognized for 9 Months Ending 9/30/16
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		228		414		—		51		2		54		7
Municipal		—		—		—		—		—		—		—
Commercial real estate		593		593		—		594		9		310		30
Residential real estate		97		186		—		101		2		106		6
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	918	$	1,193	$	—	$	746	$	13	$	470	$	43
With required reserve recorded:
Construction and land development	$	95	$	108	$	4	$	96	$	—	$	97	$	—
Commercial and industrial		171		187		9		353		2		367		7
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,114		3,219		143		3,128		31		2,251		64
Residential real estate		111		110		7		111		1		387		4
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		36		—
Total	$	3,491	$	3,624	$	163	$	3,688	$	34	$	3,138	$	75
Total:
Construction and land development	$	95	$	108	$	4	$	96	$	—	$	97	$	—
Commercial and industrial		399		601		9		404		4		421		14
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,707		3,812		143		3,722		40		2,561		94
Residential real estate		208		296		7		212		3		493		10
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		36		—
Total	$	4,409	$	4,817	$	163	$	4,434	$	47	$	3,608	$	118

There was no troubled debt restructurings that occurred during the nine month period ended September 30, 2017.

There was one commercial real estate troubled debt restructuring during the nine month period ending September 30, 2016. The pre-modification and post-modification outstanding recorded investment was $2,091,000. The loan was modified for 2016, by reducing the interest rate as well as extending the term on the loan. The financial impact for the modification was $7,000 reduction in principal payments and $2,000 reduction in interest payments for the three month period. The financial impact for the modification was $10,000 reduction in principal payments and $2,000 reduction in interest payments for the nine month period.

There were no troubled debt restructurings that subsequently defaulted during the three and nine month periods ending September 30, 2016.

Page 19 of 44

Note 5. Reclassifications Out of Accumulated Other Comprehensive Income (a)

Amount Reclassified from Accumulated Other Comprehensive Income

Details about Accumulated Other Comprehensive Income Components	Three Months Ended September 30, 2017			Three Months Ended September 30, 2016			Affected Line Item in the Statement where Net Income is Presented
(in thousands)
Unrealized gains and losses on available-for-sale securities	$	47		$	19		Net gains on sales of investments
		(19	)		(7	)	Provision for income taxes
	$	28		$	12		Net income
Accretion of unrealized losses transferred	$	(554	)	$	(809	)	Interest on securities held-to-maturity
		331			282		Provision for income taxes
	$	(223	)	$	(527	)	Net income
Amortization of defined benefit pension items
Prior-service costs	$	(3	)(b)	$	(3	)(b)	Salaries and employee benefits
Actuarial gains (losses)		(385	)(b)		(401	)(b)	Salaries and employee benefits
Total before tax		(388	)		(404	)	Income before taxes
		155			162		Provision for income taxes
	$	(233	)	$	(242	)	Net income
Details about Accumulated Other Comprehensive Income Components	Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016			Affected Line Item in the Statement where Net Income is Presented
(in thousands)
Unrealized gains and losses on available-for-sale securities	$	47		$	64		Net gains on sales of investments
		(19	)		(25	)	Provision for income taxes
	$	28		$	39		Net income
Accretion of unrealized losses transferred	$	(1,878	)	$	(3,490	)	Interest on securities held-to-maturity
		1,022			1,216		Provision for income taxes
	$	(856	)	$	(2,274	)	Net income
Amortization of defined benefit pension items
Prior-service costs	$	(8	)(b)	$	(8	)(b)	Salaries and employee benefits
Actuarial gains (losses)		(1,155	)(b)		(1,203	)(b)	Salaries and employee benefits
Total before tax		(1,163	)		(1,211	)	Income before taxes
		465			484		Provision for income taxes
	$	(698	)	$	(727	)	Net income

(a) Amount in parentheses indicates reductions to net income.

(b) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Employee Benefits footnote (Note 7) for additional details).

Page 20 of 44

Note 6. Earnings per Share (“EPS”)

Class A and Class B shares participate equally in undistributed earnings. Under the Company’s Articles of Organization, the holders of Class A Common Stock are entitled to receive dividends per share equal to at least 200% of dividends paid, if any, from time to time, on each share of Class B Common Stock.

Diluted EPS includes the dilutive effect of common stock equivalents; basic EPS excludes all common stock equivalents. The Company had no common stock equivalents outstanding for the periods ended September 30, 2017 and 2016.

The following table is a reconciliation of basic EPS and diluted EPS.

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands except share and per share data)	2017		2016		2017		2016
Basic EPS Computation:
Numerator:
Net income, Class A	$	6,307	$	5,094	$	17,505	$	14,165
Net income, Class B		1,716		1,392		4,771		3,869
Denominator:
Weighted average shares outstanding, Class A		3,605,829		3,600,729		3,603,429		3,600,729
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Basic EPS, Class A	$	1.75	$	1.41	$	4.86	$	3.93
Basic EPS, Class B		0.87		0.71		2.43		1.97
Diluted EPS Computation:
Numerator:
Net income, Class A	$	6,307	$	5,094	$	17,505	$	14,165
Net income, Class B		1,716		1,392		4,771		3,869
Total net income, for diluted EPS, Class A computation		8,023		6,486		22,276		18,034
Denominator:
Weighted average shares outstanding, basic, Class A		3,605,829		3,600,729		3,603,429		3,600,729
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Weighted average shares outstanding diluted, Class A		5,567,909		5,567,909		5,567,909		5,567,909
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Diluted EPS, Class A	$	1.44	$	1.16	$	4.00	$	3.24
Diluted EPS, Class B		0.87		0.71		2.43		1.97

Note 7. Employee Benefits

The Company provides pension benefits to its employees under a noncontributory, defined benefit plan which is funded on a current basis in compliance with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”) and recognizes costs over the estimated employee service period.

The Company also has a Supplemental Executive Insurance/Retirement Plan (the “Supplemental Plan”) which is limited to certain officers and employees of the Company. The Supplemental Plan is accrued on a current basis and recognizes costs over the estimated employee service period.

Executive officers of the Company and its subsidiaries who have at least one year of service may participate in the Supplemental Plan. The Supplemental Plan is voluntary and participants are required to contribute to its cost. Life insurance policies, which are owned by the Company, are purchased covering the lives of each participant.

Page 21 of 44

Components of Net Periodic Benefit Cost for the Three Months Ended September 30,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2017			2016			2017		2016
	(in thousands)
Service cost	$	310		$	318		$	395	$	455
Interest		362			340			345		334
Expected return on plan assets		(746	)		(694	)		—		—
Recognized prior service cost (benefit)		(26	)		(26	)		29		29
Recognized net actuarial losses		226			200			159		200
Net periodic benefit (credit) cost	$	126		$	138		$	928	$	1,018

Components of Net Periodic Benefit Cost for the Nine Months Ended September 30,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2017			2016			2017		2016
	(in thousands)
Service cost	$	930		$	954		$	1,184	$	1,366
Interest		1,087			1,020			1,035		1,002
Expected return on plan assets		(2,238	)		(2,082	)		—		—
Recognized prior service cost (benefit)		(78	)		(78	)		87		87
Recognized net actuarial losses		678			600			477		600
Net periodic benefit (credit) cost	$	379		$	414		$	2,783	$	3,055

Contributions

The Company intends to contribute $1,000,000 to the Pension Plan in 2017. As of September 30, 2017, $750,000 has been contributed.

Note 8. Fair Value Measurements

The Company follows FASB ASC 820-10, Fair Value Measurements and Disclosures, which among other things, requires enhanced disclosures about assets and liabilities carried at fair value. ASC 820-10 establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring financial instruments at fair value. The three broad levels of the hierarchy are as follows:

Level I – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The type of financial instruments included in Level I are highly liquid cash instruments with quoted prices such as G-7 government, agency securities, listed equities and money market securities, as well as listed derivative instruments.

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Instruments which are generally included in this category are corporate bonds and loans, mortgage whole loans and municipal bonds.

Level III – Instruments that have little to no pricing observability as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. Instruments that are included in this category generally include certain commercial mortgage loans, certain private equity investments, and distressed debt and non-investment grade residual interests in securitizations.

Page 22 of 44

The results of the fair value hierarchy as of September 30, 2017, are as follows:

Financial Instruments Measured at Fair Value on a Recurring Basis:

	Securities AFS Fair Value Measurements Using
	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(in thousands)
U.S. Treasury	$	1,994	$	—	$	1,994	$	—
U.S. Government Sponsored Enterprises		—		—		—		—
SBA Backed Securities		80,764		—		80,764		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		219,503		—		219,503		—
Privately Issued Residential Mortgage-Backed Securities		954		—		954		—
Obligations Issued by States and Political Subdivisions		79,245		—		—		79,245
Other Debt Securities		4,987		—		4,987		—
Equity Securities		343		343		—		—
Total	$	387,790	$	343	$	308,202	$	79,245
Financial Instruments Measured at Fair Value on a Non-recurring Basis:
Impaired Loans	$	134	$	—	$	—	$	134

Impaired loan balances represent those collateral dependent loans where management has estimated the credit loss by comparing the loan’s carrying value against the expected realizable fair value of the collateral. Fair value is generally determined through a review process that includes independent appraisals, discounted cash flows, or other external assessments of the underlying collateral, which generally include various Level 3 inputs which are not observable. The Company discounts the fair values, as appropriate, based on management’s observations of the local real estate market for loans in this category.

Appraisals, discounted cash flows and real estate tax assessments are reviewed quarterly. There is no specific policy regarding how frequently appraisals will be updated. Adjustments are made to appraisals and real estate tax assessments based on management’s estimate of changes in real estate values. Within the past twelve months there have been no updated appraisals, however, all impaired loans have been reviewed during the past quarter using either a discounted cash flow analysis, appraisal of collateral or other type of real estate tax assessment. The types of adjustments that are made to specific provisions (credits) relate to impaired loans recognized for the three and nine month periods ended September 30, 2017 amounted to $15,000 and $11,000, respectively.

There were no transfers between level 1, 2 and 3 for the nine months ended September 30, 2017. There were no liabilities measured at fair value on a recurring or nonrecurring basis during the nine month period ended September 30, 2017.

Page 23 of 44

The following table presents additional information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands). Management continues to monitor the assumptions used to value the assets listed below.

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Securities AFS (4)	$	79,245	Discounted cash flow	Discount rate	0%-2% (3)
Impaired Loans	$	134	Appraisal of collateral (1)	Appraisal adjustments (2)	0%-30% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated expenses.

(3) Weighted averages.

(4) Municipal securities generally have maturities of one year or less and, therefore, the amortized cost equates to the fair value. There was one auction rate security whose fair value is based on the evaluation of the underlying issuer, prevailing interest rates and market liquidity.

The changes in Level 3 securities for the three month period ended September 30, 2017 are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Equity Securities		Total
	(in thousands)
Balance at December 31, 2016	$	4,298	$	160,578		$	—	$	164,876
Purchases		—		61,393			—		61,393
Maturities and calls		—		(146,869	)		—		(146,869	)
Amortization		—		(155	)		—		(155	)
Changes in fair value		—		—			—		—
Balance at September 30, 2017	$	4,298	$	74,947		$	—	$	79,245

The amortized cost of Level 3 securities was $79,655,000 at September 30, 2017 with an unrealized loss of $410,000. The securities in this category are generally municipal securities with no readily determinable fair value or failed auction rate securities. Management evaluated the fair value of these securities based on an evaluation of the underlying issuer, prevailing rates and market liquidity.

The changes in Level 3 securities for the six month period ended September 30, 2016, are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Equity Securities			Total
	(in thousands)
Balance at December 31, 2015	$	3,820	$	153,140		$	37		$	156,997
Purchases		—		181,752			—			181,752
Maturities and calls		—		(159,116	)		(37	)		(159,153	)
Amortization		—		(163	)		—			(163	)
Changes in fair value		478		—			—			478
Balance at September 30, 2016	$	4,298	$	175,613		$	—		$	179,911

The amortized cost of Level 3 securities was $180,315,000 at September 30, 2016 with an unrealized loss of $404,000. The securities in this category are generally equity investments, municipal securities with no readily determinable fair value or failed auction rate securities. Management evaluated the fair value of these securities based on an evaluation of the underlying issuer, prevailing rates and market liquidity.

Page 24 of 44

The results of the fair value hierarchy as of December 31, 2016, are as follows:

Financial Instruments Measured at Fair Value on a Recurring Basis:

	Securities AFS Fair Value Measurements Using
	Carrying Value		Quoted Prices In Active Markets for Identitcal Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(in thousands)
U.S. Treasury	$	2,000	$	—	$	2,000	$	—
U.S. Government Sponsored Enterprises		24,952		—		24,952		—
SBA Backed Securities		57,767		—		57,767		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		243,325		—		243,325		—
Privately Issued Residential Mortgage-Backed Securities		1,109		—		1,109		—
Obligations Issued by States and Political Subdivisions		164,876		—		—		164,876
Other Debt Securities		4,924		—		4,924		—
Equity Securities		344		344		—		—
Total	$	499,297	$	344	$	334,077	$	164,876
Financial Instruments Measured at Fair Value on a Non-recurring Basis:
Impaired Loans	$	260	$	—	$	—	$	260

Impaired loan balances represent those collateral dependent loans where management has estimated the credit loss by comparing the loan’s carrying value against the expected realizable fair value of the collateral. Fair value is generally determined through a review process that includes independent appraisals, discounted cash flows, or other external assessments of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. The Company discounts the fair values, as appropriate, based on management’s observations of the local real estate market for loans in this category.

Appraisals, discounted cash flows and real estate tax assessments are reviewed quarterly. There is no specific policy regarding how frequently appraisals will be updated. Adjustments are made to appraisals and real estate tax assessments based on management’s estimate of changes in real estate values. Within the past twelve months there have been no updated appraisals, however, all impaired loans have been reviewed during the past quarter using either a discounted cash flow analysis, appraisal of collateral or other type of real estate tax assessment. The types of adjustments that are made to specific provisions (credits) relate to impaired loans recognized for 2016 for the estimated credit loss amounted to ($135,000).

There were no transfers between level 1, 2 and 3 for the year ended December 31, 2016. There were no liabilities measured at fair value on a recurring or nonrecurring basis during the year ended December 31, 2016.

The following table presents additional information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands). Management continues to monitor the assumptions used to value the assets listed below.

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Securities AFS (4)	$	164,876	Discounted cash flow	Discount rate	0%-1% (3)
Impaired Loans	$	260	Appraisal of collateral (1)	Appraisal adjustments (2)	0%-30% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

Page 25 of 44

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated expenses.

(3) Weighted averages

(4) Municipal securities generally have maturities of one year or less and, therefore, the amortized cost equates to the fair value. There was one auction rate security whose fair value is based on the evaluation of the underlying issuer, prevailing interest rates and market liquidity.

Note 9. Fair Values of Financial Instruments

The following methods and assumptions were used by the Company in estimating fair values of its financial instruments. Excluded from this disclosure are all nonfinancial instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The assumptions used below are expected to approximate those that market participants would use in valuing these financial instruments.

Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of timing, amount of expected future cash flows and the credit standing of the issuer. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In some cases, the fair value estimates cannot be substantiated by comparison to independent markets. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below.

Securities held-to-maturity: The fair values of these securities were based on quoted market prices, where available, as provided by third-party investment portfolio pricing vendors. If quoted market prices were not available, fair values provided by the vendors were based on quoted market prices of comparable instruments in active markets and/or based on a matrix pricing methodology which employs The Bond Market Association’s standard calculations for cash flow and price/yield analysis, live benchmark bond pricing and terms/condition data available from major pricing sources. Management regards the inputs and methods used by third party pricing vendors to be “Level 2 inputs and methods” as defined in the “fair value hierarchy” provided by FASB.

Loans Held-for-Sale: Fair value is measured using quoted market prices when available. These assets are typically categorized as Level 1. If quoted market prices are not available, comparable market values may be utilized. These assets are typically categorized as Level 2.

Loans: For variable-rate loans, that reprice frequently and with no significant change in credit risk, fair values are based on carrying amounts. The fair value of other loans is estimated using discounted cash flow analysis, based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Incremental credit risk for nonperforming loans has been considered.

Time deposits: The fair value of time deposits was estimated using a discounted cash flow approach that applies prevailing market interest rates for similar maturity instruments. The fair values of the Company’s time deposit liabilities do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

Other borrowed funds: The fair value of other borrowed funds is based on the discounted value of contractual cash flows. The discount rate used is estimated based on the rates currently offered for other borrowed funds of similar remaining maturities.

Subordinated debentures: The fair value of subordinated debentures is based on the discounted value of contractual cash flows. The discount rate used is estimated based on the rates currently offered for other subordinated debentures of similar remaining maturities.

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The following presents (in thousands) the carrying amount, estimated fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2017 and December 31, 2016. This table excludes financial instruments for which the carrying amount approximates fair value. Financial assets for which the fair value approximates carrying value include cash and cash equivalents, short-term investments, FHLBB stock and accrued interest receivable. Financial liabilities for which the fair value approximates carrying value include non-maturity deposits, short-term borrowings and accrued interest payable.

September 30, 2017	Carrying Amount		Estimated Fair Value		Fair Value Measurements Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(in thousands)
Financial assets:
Securities held-to-maturity	$	1,654,908	$	1,637,497	$	—	$	1,637,497	$	—
Loans (1)		2,086,949		2,059,983		—		—		2,059,983
Financial liabilities:
Time deposits		607,279		606,256		—		606,256		—
Other borrowed funds		358,000		359,305		—		359,305		—
Subordinated debentures		36,083		36,083		—		—		36,083
December 31, 2016
Financial assets:
Securities held-to-maturity	$	1,653,986	$	1,635,808	$	—	$	1,635,808	$	—
Loans (1)		1,899,527		1,873,703		—		—		1,873,703
Financial liabilities:
Time deposits		478,359		480,133		—		480,133		—
Other borrowed funds		293,000		294,940		—		294,940		—
Subordinated debentures		36,083		36,083		—		—		36,083

(1) Comprised of loans (including collateral dependent impaired loans), net of deferred loan costs and the allowance for loan losses.

Note 10. Recent Accounting Developments

In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interest with a Scope Exception. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2018. Management is currently assessing the applicability of ASU 2017-11 and has not determined the impact of the adoption, if any, as of September 30, 2017.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. FASB issued this Update to address the diversity in practice as well as the cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017. Management is currently assessing ASU 2017-09. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In March 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt. The FASB is issuing this ASU to amend the amortization period for certain purchased callable debt securities held at a premium. The FASB is shortening the amortization period for the premium to the earliest call date. Under current generally accepted accounting principles (GAAP), entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently assessing the applicability of this ASU and has not determined the impact, if any, as of September 30, 2017.

In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this

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ASU require that an employer disaggregate the service cost component from the other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. Management is currently assessing this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In February 2017, the FASB issued ASU 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960) Defined Contribution Pension Plans (Topic 962) Health and Welfare Benefit Plans (Topic 965), Employee Benefit Plan Master Trust Reporting. The FASB has issued this ASU to improve the usefulness of the information reported to users of employee benefit plan financial statements and to provide clarity to preparers and auditors. This ASU relates primarily to the reporting by an employee benefit plan for its interest in a master trust. The amendments in this ASU clarify presentation requirements for a plan’s interest in a master trust and require more detailed disclosures of the plan’s interest in the master trust. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. Management is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In February 2017, the FASB issued ASU 2017-05, Other Income Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). This ASU was issued to clarify the scope of Subtopic 610-20, and to add guidance for partial sales of nonfinancial assets. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017 Management is currently assessing this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU was issued to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. For public entities, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted and application should be on a prospective basis. Management is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The intention of this ASU is to provide additional clarification on specific issues brought forth by the FASB and the International Accounting Standards Board Joint Transition Resource Group for Revenue Recognition in relation to Topic 606 and revenue recognition. This ASU is to have the same effective date as ASU 2015-14 which deferred the effective date of ASU 2014-09 to December 15, 2017. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. Since the issuance of Update 2014-09, the FASB has finalized various amendments to the standard that include corrections, improvements and timing modifications.

In July 2015, the FASB approved the deferral of the new standard’s effective date by one year. The new standard is effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016.

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In 2017, we established a cross-functional implementation team consisting of representatives from across our business segments. We utilized a bottom-up approach to analyze the impact of the standard on our contract portfolio by reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our revenue contracts. In addition, we identified and implemented appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. The implementation team has reported the findings and progress of the project to management on a frequent basis over this past year.

We have been closely monitoring FASB activity related to the new standard. In the first nine months of 2017, we made significant progress toward completing our evaluation of the potential changes from adopting the new standard on our future financial reporting and disclosures. In the third quarter of 2017, we finalized our contract reviews. Based on our evaluation, we will use the modified retrospective transition method.

The Company is continuing to assess this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to put most leases on their balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting. This ASU also eliminates today’s real estate-specific provisions for all companies. For lessors, this ASU modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods therein. Early adoption is permitted. The Company is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

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

Executive Overview

Century Bancorp, Inc. (together with its bank subsidiary, unless the context otherwise requires, the “Company”) is a Massachusetts state-chartered bank holding company headquartered in Medford, Massachusetts. The Company is a Massachusetts corporation formed in 1972 and has one banking subsidiary (the “Bank”): Century Bank and Trust Company formed in 1969. At September 30, 2017, the Company had total assets of $4.6 billion. Currently, the Company operates 27 banking offices in 20 cities and towns in Massachusetts, ranging from Braintree in the south to Andover in the north. The Bank’s customers consist primarily of small and medium-sized businesses and retail customers in these communities and surrounding areas, as well as local governments, businesses, and educational institutions throughout Massachusetts, New Hampshire, Rhode Island, Connecticut and New York.

The Company’s results of operations are largely dependent on net interest income, which is the difference between the interest earned on loans and securities and interest paid on deposits and borrowings. The results of operations are also affected by the level of income and fees from loans, deposits, as well as operating expenses, the provision for loan losses, the impact of federal and state income taxes and the relative levels of interest rates and economic activity.

The Company offers a wide range of services to commercial enterprises, state and local governments and agencies, non-profit organizations and individuals. It emphasizes service to small and medium sized businesses and retail customers in its market area. In recent quarters, the Company has increased business to larger institutions, specifically, healthcare and higher education. The Company makes commercial loans, real estate and construction loans and consumer loans, and accepts savings, time, and demand deposits. In addition, the Company offers its corporate and institutional customers automated lock box collection services, cash management services and account reconciliation services, and actively promotes the marketing of these services to the municipal market. Also, the Company provides full service securities brokerage services through a program called Investment Services at Century Bank, which is supported by LPL Financial, a third party full-service securities brokerage business.

The Company has municipal cash management client engagements in Massachusetts, New Hampshire and Rhode Island comprising of approximately 250 government entities.

Net income for the nine months ended September 30, 2017, was $22,276,000 or $4.00 per Class A share diluted, an increase of 23.5% compared to net income of $18,034,000, or $3.24 per Class A share diluted, for the same period a year ago. For the quarter ended September 30, 2017, net income totaled $8,023,000 or $1.44 per Class A share diluted, an increase of 23.7% compared to net income of $6,486,000, or $1.16 per Class A share diluted, for the same period a year ago.

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Earnings per share (EPS) for each class of stock and time period is as follows:

	Three Months Ended September 30,
	2017		2016
Basic EPS – Class A common	$	1.75	$	1.41
Basic EPS – Class B common	$	0.87	$	0.71
Diluted EPS – Class A common	$	1.44	$	1.16
Diluted EPS – Class B common	$	0.87	$	0.71
	Nine Months Ended September 30,
	2017		2016
Basic EPS – Class A common	$	4.86	$	3.93
Basic EPS – Class B common	$	2.43	$	1.97
Diluted EPS – Class A common	$	4.00	$	3.24
Diluted EPS – Class B common	$	2.43	$	1.97

Net interest income totaled $63,914,000 for the nine months ended September 30, 2017 compared to $55,320,000 for the same period in 2016. The 15.5% increase in net interest income for the period is primarily due to an increase in average earning assets and an increase in the net interest margin. The net interest margin increased from 2.15% on a fully taxable equivalent basis in 2016 to 2.24% for the same period in 2017. This was primarily the result of an increase in rates on earning assets and prepayment penalties collected. The average balances of earning assets increased by 9.6% combined with a similar increase in average deposits. Also, interest expense increased 20.1% primarily as a result of an increase in rates and an increase in deposit balances.

The trends in the net interest margin are illustrated in the graph below:

During the second and third quarter of 2015 the net interest margin increased primarily as a result of an increase in higher yielding assets as well as prepayment penalties collected. The increase in higher yielding assets was primarily the result of increased purchases of securities held-to-maturity. The margin decreased during the fourth quarter of 2015 primarily as a result of lower yielding loan originations. The margin increased during the first quarter of 2016 primarily as a result of an increase in rates on earning assets. The margin decreased during the second, third, and fourth quarters of 2016 primarily as a result of a decrease in rates on earning assets. The margin increased during the first, second and third quarters of 2017 primarily as a result of an increase in rates on earning assets. This increase was primarily the result of the yield on floating rate assets increasing as a result of recent increases in short term interest rates as well as an increase in prepayment penalties collected during the second quarter of 2017. Prepayment penalties collected amounted to $825,000 and contributed approximately seven basis points to the net interest margin for the second quarter. During the first, second, and third quarters of 2017, the Company has not seen a corresponding increase in short term rates on interest bearing liabilities.

While management will continue its efforts to improve the net interest margin, there can be no assurance that certain factors beyond its control, such as the prepayment of loans and changes in market interest rates, will continue to positively impact the net interest margin.

The provision for loan losses increased by $165,000 from $1,175,000 for the nine months ended September 30, 2016 to $1,340,000 for the same period in 2017, primarily as a result of an increase in loan growth offset, somewhat, by

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changes in historical loss factors. Refer to the allowance for loan loss section of the management discussion and analysis for additional discussion. Non-performing assets totaled $1,598,000 at September 30, 2017, compared to $1,084,000 at December 31, 2016.

For the first nine months of 2017, the Company’s effective income tax rate was 5.6% compared to 0.2% for last year’s corresponding period. The effective income tax rate increased primarily as a result of an increase in taxable income.

During June 2016, the Company entered into a lease agreement to open a new branch located in Wellesley, Massachusetts. The Company closed its existing Wellesley branch and transferred the accounts to the new Wellesley branch which opened on December 19, 2016. On September 25, 2017 the Company purchased the new Wellesley location.

Recent Market Developments

Since June 2009, the U.S. economy has been recovering from the most severe recession and financial crisis since the Great Depression. There have been improvements in private sector employment, industrial production and U.S. exports. Even though the U.S. economy is in its eighth year of expansion, the consensus forecast is for expansion through at least 2018. Short and medium-term risks to the outlook include uncertainty in the United States over potential fiscal policy changes and uncertainty in Europe with respect to the United Kingdom’s decision to leave the European Union. Long-term risks to the U.S. economy include the slowdown in productivity growth, which may pose a risk to the U.S. standard of living.

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) became law. The Act was intended to address many issues arising in the recent financial crisis and is exceedingly broad in scope, affecting many aspects of bank and financial market regulation. The Act requires, or permits by implementing regulation, enhanced prudential standards for banks and bank holding companies inclusive of capital, leverage, liquidity, concentration and exposure measures. In addition, traditional bank regulatory principles such as restrictions on transactions with affiliates and insiders were enhanced. The Act also contains reforms of consumer mortgage lending practices and creates a Bureau of Consumer Financial Protection, which is granted broad authority over consumer financial practices of banks and others. It is expected as the specific new or incremental requirements applicable to the Company become effective that the costs and difficulties of remaining compliant with all such requirements will increase. The Act broadened the base for FDIC assessments to average consolidated assets less tangible equity of financial institutions and also permanently raises the current standard maximum FDIC deposit insurance amount to $250,000. The Act extended unlimited deposit insurance on non-interest bearing transaction accounts through December 31, 2012.

In addition, the Act added a new Section 13 to the Bank Holding Company Act, the so-called “Volcker Rule,” (the “Rule”) which generally restricts certain banking entities such as the Company and its subsidiaries or affiliates, from engaging in proprietary trading activities and owning equity in or sponsoring any private equity or hedge fund. The Rule became effective July 21, 2012. The final implementing regulations for the Rule were issued by various regulatory agencies in December, 2013 and under an extended conformance regulation compliance was required to be achieved by July 21, 2015. The conformance period for investments in and relationships with certain “legacy covered funds” was extended to July 21, 2017. Under the Rule, the Company may be restricted from engaging in proprietary trading, investing in third party hedge or private equity funds or sponsoring new funds unless it qualifies for an exemption from the rule. The Company has little involvement in prohibited proprietary trading or investment activities in covered funds and the Company does not expect that complying with the requirements of the Rule will have any material effect on the Company’s financial condition or results of operation. The 2016 Presidential election and resulting change to a Republican Administration created the possibility that some of the “reforms” contained in the Act may be repealed or modified. New reforms under discussion include the prospect of some type of regulatory burden relief for small banks which in this context might include the Company. The extent and consequences of any such changes can’t be currently assessed but at the present time the Company does not think it is likely that changes that may be made will have any material effect on the Company’s financial condition and results of operations.

Federal banking regulators have issued risk-based capital guidelines, which assign risk factors to asset categories and off-balance-sheet items. Also, the Basel Committee has issued capital standards entitled “Basel III: A global regulatory framework for more resilient banks and banking systems” (“Basel III”). The Federal Reserve Board has finalized its rule implementing the Basel III regulatory capital framework. The rule that came into effect in January 2015 sets the Basel III minimum regulatory capital requirements for all organizations. It included a new common equity Tier I ratio of 4.5 percent of risk-weighted assets, raised the minimum Tier I capital ratio from 4 percent to 6 percent of risk-weighted assets and would set a new conservation buffer of 2.5 percent of risk-weighted assets. The implementation of the framework did not have a material impact on the Company’s financial condition or results of operations.

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Financial Condition

Loans

On September 30, 2017, total loans outstanding were $2,112,647,000, up by $188,714,000 from the total on December 31, 2016. At September 30, 2017, commercial real estate loans accounted for 34.8%, commercial and industrial accounted for 33.3%, and residential real estate loans, including home equity loans, accounted for 24.1% of total loans.

Commercial real estate loans increased to $735,844,000 at September 30, 2017 from $696,173,000 at December 31, 2016, primarily as a result of new loan originations. Residential real estate loans increased to $272,588,000 at September 30, 2017 from $241,357,000 at December 31, 2016, primarily as a result of new loan originations. Home equity loans increased to $237,094,000 at September 30, 2017 from $211,857,000 at December 31, 2016, primarily as a result of a home equity loan promotion.

Commercial and industrial loans increased to $702,646,000 at September 30, 2017 from $612,503,000 at December 31, 2016, primarily as a result of an increase in larger loan originations to large institutions. Construction loans increased to $16,779,000 at September 30, 2017 from $14,928,000 on December 31, 2016. Municipal loans decreased to $128,412,000 from $135,418,000, primarily as a result of payoffs of existing loans. In recent quarters, the Company has increased business to larger institutions, specifically, healthcare, higher education, and municipal organizations. Further discussion relating to changes in portfolio composition is discussed in the allowance for loan loss section of the management discussion and analysis.

Allowance for Loan Losses

The allowance for loan loss at September 30, 2017 was $25,698,000 as compared to $24,406,000 at December 31, 2016. The level of the allowance for loan losses to total loans was 1.22% at September 30, 2017 and 1.27% at December 31, 2016.

During 2015, the Company enhanced its approach to the development of the historical loss factors and qualitative factors used on certain loan portfolios. The methodology enhancement was in response to the changes in the risk characteristics of the Company’s new loan originations, as the Company has continued to increase its exposure to larger loan originations to large institutions with strong credit quality. The Company has limited internal loss history experience with these types of loans, and has determined a more appropriate representation of loss expectation is to utilize external historical loss factors based on public credit ratings, as there is a great deal of default and loss data available on these types of loans from the credit rating agencies. As of June 30, 2015, the Company incorporated this information into the development of the historical loss rates for these loan types. The combination of the enhancements made to the allowance methodology to address the changing risk profile of the Company’s new loan originations and the increase in these loans types as a percentage of the overall portfolio, has resulted in a decrease in the ratio of allowance for loan losses to total loans for 2016 and has continued into 2017. Also, during 2016 and the first nine months of 2017, the Company’s weighted average risk rating has decreased. Additionally, the Company has continued to increase its lending for large loans to large institutions with publicly available credit ratings. The historical loss allocation for these types of loans is low. This has contributed to the continued decrease in the ratio of allowance for loan losses to total loans for 2017.

In addition, the Company monitors the outlook for the industries in which these institutions operate. Healthcare and higher education are the primary industries. The Company also monitors the volatility of the losses within the historical data.

By combining the credit rating, the industry outlook and the loss volatility, the Company arrives at the quantitative loss factor for each credit grade.

For a large loan to large institutions with publically available credit ratings the Company tracks these ratings. These ratings are tracked as a credit quality indicator for these loans. Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at September 30, 2017.

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	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	365,441	$	62,657	$	45,371	$	473,469
A1 – A3		247,253		7,770		128,743		383,766
Baa1 – Baa3		—		46,970		124,932		171,902
Ba2		—		8,165		—		8,165
Total	$	612,694	$	125,562	$	299,046	$	1,037,302

Credit ratings issued by national organizations are presented in the following table at December 31, 2016.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	334,674	$	66,245	$	6,596	$	407,515
A1 – A3		188,777		33,365		129,423		351,565
Baa1 – Baa3		—		26,970		127,366		154,336
Ba2		—		3,610		—		3,610
Total	$	523,451	$	130,190	$	263,385	$	917,026

The allowance for loan losses is an estimate of the amount needed for an adequate reserve to absorb losses in the existing loan portfolio. This amount is determined by an evaluation of the loan portfolio, including input from an independent organization engaged to review selected larger loans, a review of loan experience and current economic conditions. Although the allowance is allocated between categories, the entire allowance is available to absorb losses attributable to all loan categories.

The following table summarizes the changes in the Company’s allowance for loan losses for the periods indicated.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
	(in thousands)
Allowance for loan losses, beginning of period	$	25,289		$	23,863		$	24,406		$	23,075
Loans charged off		(95	)		(118	)		(292	)		(298	)
Recoveries on loans previously charged-off		54			93			244			345
Net recoveries (charge-offs)		(41	)		(25	)		(48	)		47
Provision charged to expense		450			375			1,340			1,175
Reclassification to other liabilities *		—			(5	)		—			(89	)
Allowance for loan losses, end of period	$	25,698		$	24,208		$	25,698		$	24,208

* The reclassification relates to allowance for loan loss allocations on unused commitments that have been reclassified to other liabiliites.

The Company may experience increased levels of nonaccrual loans if borrowers are negatively impacted by future negative economic conditions. Management continually monitors trends in the loan portfolio to determine the appropriate level of allowance for loan losses. At the current time, management believes that the allowance for loan losses is adequate.

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Nonperforming Assets

The following table sets forth information regarding nonperforming assets held by the Bank at the dates indicated:

	September 30 2017			December 31, 2016
	(dollars in thousands)
Nonaccruing loans	$	1,598		$	1,084
Total nonperforming assets	$	1,598		$	1,084
Loans past due 90 days or more and still accruing	$	—		$	—
Nonaccruing loans as a percentage of total loans		0.08	%		0.06	%
Nonperforming assets as a percentage of total assets		0.04	%		0.02	%
Accruing troubled debt restructures	$	2,843		$	3,526

Cash and Cash Equivalents

Cash and cash equivalents increased from $236,151,000 to $253,133,000 during the first nine months of 2017. This increase was primarily attributable to increased temporary borrowings.

Short-term Investments

Short-term investments decreased by $3,183,000, as a result of maturities during the first nine months of 2017.

Investments

Management continually evaluates its investment alternatives in order to properly manage the overall balance sheet mix. The timing of purchases, sales and reinvestments, if any, will be based on various factors including expectation of movements in market interest rates, deposit flows and loan demand. Notwithstanding these events, it is the intent of management to grow the earning asset base mainly through loan originations while funding this growth through a mix of retail deposits, FHLB advances, and retail repurchase agreements.

Securities Available-for-Sale (at Fair Value)

The securities available-for-sale portfolio totaled $387,790,000 at September 30, 2017, a decrease of 22.3% from December 31, 2016. The portfolio decreased mainly as a result of calls and maturities of securities available-for-sale totaling $211,576,000 for the nine months ended September 30, 2017. The calls and maturities were offset, somewhat, by purchases of $111,777,000. The portfolio is concentrated in United States Government Sponsored Enterprises, Mortgage-backed Securities and Obligations issued by States and Political Subdivisions and had an estimated weighted average remaining life of 5.8 years.

At September 30, 2017, 79.5% of the Company’s securities available-for-sale are classified as Level 2. The fair values of these securities are generally obtained from a pricing service, which provides the Company with a description of the inputs generally utilized for each type of security. These inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. Market indicators and industry and economic events are also monitored.

Securities available-for-sale totaling $79,245,000 or 20.4% of securities available-for-sale are classified as Level 3. These securities are generally municipal securities with no observable fair value. The securities are carried at cost which approximates fair value. A periodic review of underlying financial statements and credit ratings is performed to assess the appropriateness of these valuations.

During the first nine months of 2017, net unrealized losses on the securities available-for-sale decreased to $214,000 from a net unrealized loss of $923,000 at December 31, 2016. The following table sets forth the fair value of securities available-for-sale at the dates indicated.

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	September 30,		December 31,
	2017		2016
	(in thousands)
U.S. Treasury	$	1,994	$	2,000
U.S. Government Sponsored Enterprises		—		24,952
Small Business Administration		80,764		57,767
U.S Government Agency and Sponsored Enterprise Mortgage-backed Securities		219,503		243,325
Privately Issued Residential Mortgage- backed Securities		954		1,109
Obligations issued by States and Political Subdivisions		79,245		164,876
Other Debt Securities		4,987		4,924
Equity Securities		343		344
Total Securities Available–for-Sale	$	387,790	$	499,297

The Company realized gross gains of $47,000 from the proceeds of $18,133,000 from the sales of available-for-sale securities for the nine months ended September 30, 2017. The Company realized gross gains of $52,000 from the proceeds of $2,376,000 from the sales of available-for-sales securities for the nine months ended September 30, 2016.

Securities Held-to-Maturity (at Amortized Cost)

The securities held-to-maturity portfolio totaled $1,654,908,000 on September 30, 2017, an increase of 0.1% from December 31, 2016. Purchases of securities held-to-maturity totaled $230,813,000 for the nine months ended September 30, 2017. The purchases were offset, by calls and maturities of $231,953,000. The portfolio is concentrated in United States Government Sponsored Enterprises and Mortgage-backed Securities and had an estimated weighted average remaining life of 4.2 years. The following table sets forth the fair value of securities held-to-maturity at the dates indicated.

	September 30, 2017		December 31, 2016
	(in thousands)
U.S. Government Sponsored Enterprises	$	114,527	$	148,326
SBA Backed Securities		58,844		46,140
U.S. Government Agency and Sponsored Enterprise Mortgage-backed Securities		1,481,537		1,459,520
Total Securities Held-to-Maturity	$	1,654,908	$	1,653,986

There were no sales of held-to-maturity securities for the nine months ended September 30, 2017. The Company realized gross gains of $12,000 from the proceeds of $192,000 from the sales of securities held-to-maturity for the nine months ended September 30, 2016. The sales of securities held-to-maturity relate to certain mortgage backed securities for which the Company had previously collected a substantial portion of its principal investment.

At September 30, 2017 and December 31, 2016, all mortgage-backed securities are obligations of U.S. Government Sponsored Enterprises. There were no sales of investments for the nine months ending September 30, 2017.

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

Federal Home Loan Bank of Boston Stock

The Bank, as a member of the Federal Home Loan Bank of Boston (“FHLBB”), is required to maintain an investment in capital stock of the FHLBB. Based on redemption provisions, the stock has no quoted market value and is carried at cost. At its discretion, the FHLBB may declare dividends on the stock. The Company reviews for impairment based on the ultimate recoverability of the cost basis in the stock. During the first nine months of 2017, the FHLBB redeemed $7,175,000 of FHLBB stock and the Company purchased $8,070,000 of FHLBB stock. As of September 30, 2017, no impairment has been recognized.

Page 35 of 44

Deposits and Borrowed Funds

On September 30, 2017, deposits totaled $3,605,682,000, representing a 1.3% decrease from December 31, 2016. Total deposits decreased primarily as a result of decreases in money market accounts and savings and NOW deposits. Money market deposits decreased mainly as a result of decreased corporate account balances. Savings and NOW deposits decreased, mainly as a result of decreased personal and municipal deposits. Time deposits increased primarily as a result of increased personal, corporate, and municipal time deposits as the Company has offered competitive rates for these types of deposits.

Borrowed funds totaled $586,848,000 at September 30, 2017 compared to $475,280,000 at December 31, 2016. Borrowed funds increased mainly as a result of an increase in short-term FHLBB borrowings and securities sold under agreements to repurchase. Securities sold under agreements to repurchase increased primarily as a result of increases in corporate accounts.

Stockholders’ Equity

At September 30, 2017, total equity was $262,648,000 compared to $240,041,000 at December 31, 2016. The Company’s equity increased primarily as a result of earnings and a decrease in other comprehensive loss, net of taxes, offset somewhat by dividends paid. Other comprehensive loss, net of taxes, decreased as a result of a decrease in unrealized losses on securities available-for-sale, unrealized losses on securities transferred from available-for-sale to held-to-maturity and amortization of the pension liability. The Company’s leverage ratio stood at 6.56% at September 30, 2017, compared to 6.28% at December 31, 2016. The increase in the leverage ratio was due to an increase in stockholders’ equity, offset somewhat by an increase in quarterly average assets. Book value as of September 30, 2017 was $47.17 per share compared to $43.11 at December 31, 2016.

Page 36 of 44

Results of Operations

The following table sets forth the distribution of the Company’s average assets, liabilities and stockholders’ equity, and average rates earned or paid on a fully taxable equivalent basis for each of the three-month periods indicated.

	Three Months Ended
	September 30, 2017									September 30, 2016
	Average Balance			Interest Income/ Expenses (1)			Rate Earned/ Paid (1)			Average Balance			Interest Income/ Expenses (1)			Rate Earned/ Paid (1)
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loans (2)
Loans taxable	$	996,343		$	10,007			3.98	%	$	872,906		$	9,016			4.11	%
Loans tax-exempt		1,075,118			10,104			3.73	%		1,005,725			9,240			3.65	%
Securities available-for-sale (5):
Taxable		335,701			1,560			1.86	%		395,670			1,112			1.12	%
Tax-exempt		85,642			353			1.65	%		174,942			454			1.04	%
Securities held-to-maturity:
Taxable		1,695,355			9,447			2.23	%		1,559,082			8,238			2.11	%
Interest-bearing deposits in other banks		190,274			607			1.28	%		216,768			283			0.52	%
Total interest-earning assets		4,378,433			32,078			2.92	%		4,225,093			28,343			2.69	%
Non interest-earning assets		219,310									210,568
Allowance for loan losses		(25,562	)								(24,092	)
Total assets	$	4,572,181								$	4,411,569
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing deposits:
NOW accounts	$	938,137		$	1,029			0.44	%	$	947,041		$	622			0.26	%
Savings accounts		512,521			698			0.54	%		426,241			461			0.43	%
Money market accounts		1,022,148			1,395			0.54	%		1,066,121			909			0.34	%
Time deposits		594,193			2,095			1.40	%		454,578			1,464			1.28	%
Total interest-bearing deposits		3,066,999			5,217			0.67	%		2,893,981			3,456			0.48	%
Securities sold under agreements to repurchase		183,929			129			0.28	%		233,188			122			0.21	%
Other borrowed funds and subordinated debentures		311,540			1,822			2.32	%		371,246			2,213			2.37	%
Total interest-bearing liabilities		3,562,468			7,168			0.80	%		3,498,415			5,791			0.66	%
Non-interest-bearing liabilities
Demand deposits		689,274									625,024
Other liabilities		61,785									57,812
Total liabilities		4,313,527									4,181,251
Stockholders’ equity		258,654									230,318
Total liabilities & stockholders’ equity	$	4,572,181								$	4,411,569
Net interest income on a fully taxable equivalent basis					24,910									22,552
Less taxable equivalent adjustment					(3,557	)								(3,338	)
Net interest income				$	21,353								$	19,214
Net interest spread (3)								2.12	%								2.01	%
Net interest margin (4)								2.26	%								2.12	%

(1) On a fully taxable equivalent basis calculated using a federal tax rate of 34%.

(2) Nonaccrual loans are included in average amounts outstanding.

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

(4) Net interest margin represents net interest income as a percentage of average interest-earning assets.

(5) Average balances of securities available-for-sale calculated utilizing amortized cost.

Page 37 of 44

The following table sets forth the distribution of the Company’s average assets, liabilities and stockholders’ equity, and average rates earned or paid on a fully taxable equivalent basis for each of the six-month periods indicated.

	Nine Months Ended
	September 30, 2017									September 30, 2016
	Average Balance			Interest Income/ Expenses (1)			Rate Earned/ Paid (1)			Average Balance			Interest Income/ Expenses (1)			Rate Earned/ Paid (1)
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loans (2)
Loans taxable	$	967,482		$	28,782			3.98	%	$	856,797		$	25,728			4.01	%
Loans tax-exempt		1,068,716			29,897			3.74	%		962,930			27,083			3.76	%
Securities available-for-sale (5):
Taxable		361,400			4,236			1.56	%		336,354			2,805			1.11	%
Tax-exempt		120,150			1,280			1.42	%		149,766			1,035			0.92	%
Securities held-to-maturity:
Taxable		1,739,189			28,806			2.21	%		1,504,728			24,178			2.14	%
Interest-bearing deposits in other banks		177,233			1,349			1.01	%		233,531			906			0.52	%
Total interest-earning assets		4,434,170			94,350			2.84	%		4,044,106			81,735			2.70	%
Non interest-earning assets		220,194									207,571
Allowance for loan losses		(25,089	)								(23,714	)
Total assets	$	4,629,275								$	4,227,963
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing deposits:
NOW accounts	$	976,215		$	2,610			0.36	%	$	891,267		$	1,635			0.25	%
Savings accounts		503,218			1,844			0.49	%		405,594			1,224			0.40	%
Money market accounts		1,100,304			3,903			0.47	%		1,011,283			2,485			0.33	%
Time deposits		550,996			5,648			1.37	%		450,799			4,216			1.25	%
Total interest-bearing deposits		3,130,733			14,005			0.60	%		2,758,943			9,560			0.46	%
Securities sold under agreements to repurchase		193,519			352			0.24	%		229,668			363			0.21	%
Other borrowed funds and subordinated debentures		317,180			5,695			2.40	%		367,638			6,767			2.00	%
Total interest-bearing liabilities		3,641,432			20,052			0.74	%		3,356,249			16,690			0.66	%
Non-interest-bearing liabilities
Demand deposits		676,655									590,669
Other liabilities		60,274									57,151
Total liabilities		4,378,361									4,004,069
Stockholders’ equity		250,914									223,894
Total liabilities & stockholders’ equity	$	4,629,275								$	4,227,963
Net interest income on a fully taxable equivalent basis					74,298									65,045
Less taxable equivalent adjustment					(10,384	)								(9,725	)
Net interest income				$	63,914								$	55,320
Net interest spread (3)								2.11	%								2.04	%
Net interest margin (4)								2.24	%								2.15	%

(1) On a fully taxable equivalent basis calculated using a federal tax rate of 34%.

(2) Nonaccrual loans are included in average amounts outstanding.

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

(4) Net interest margin represents net interest income as a percentage of average interest-earning assets.

(5) Average balances of securities available-for-sale calculated utilizing amortized cost.

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The following table presents certain information on a fully-tax equivalent basis regarding changes in the Company’s interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to changes in rate and changes in volume.

	Three Months Ended September 30, 2017 Compared with Three Months Ended September 30, 2016									Nine Months Ended September 30, 2017 Compared with Nine Months Ended September 30, 2016
	Increase/(Decrease) Due to Change in									Increase/(Decrease) Due to Change in
	Volume			Rate			Total			Volume			Rate			Total
	(in thousands)
Interest income:
Loans
Taxable	$	1,267		$	(276	)	$	991		$	3,272		$	(218	)	$	3,054
Tax-exempt		669			195			864			2,936			(122	)		2,814
Securities available-for-sale
Taxable		(189	)		637			448			222			1,209			1,431
Tax-exempt		(295	)		194			(101	)		(234	)		479			245
Securities held-to-maturity
Taxable		744			465			1,209			3,864			764			4,628
Interest-bearing deposits in other banks		(38	)		362			324			(261	)		704			443
Total interest income		2,158			1,577			3,735		$	9,799		$	2,816		$	12,615
Interest expense:
Deposits
NOW accounts		(6	)		413			407			168			807			975
Savings accounts		105			132			237			327			293			620
Money market accounts		(39	)		525			486			234			1,184			1,418
Time deposits		486			145			631			997			435			1,432
Total interest-bearing deposits		546			1,215			1,761			1,726			2,719			4,445
Securities sold under agreements to repurchase		(29	)		36			7			(61	)		50			(11	)
Other borrowed funds and subordinated debentures		(345	)		(46	)		(391	)		(914	)		(158	)		(1,072	)
Total interest expense		172			1,205			1,377			751			2,611			3,362
Change in net interest income	$	1,986		$	372		$	2,358		$	9,048		$	205		$	9,253

Net Interest Income

For the three months ended September 30, 2017, net interest income on a fully taxable equivalent basis totaled $24,910,000 compared to $22,552,000 for the same period in 2016, an increase of $2,358,000 or 10.5%. This increase in net interest income for the period is primarily due to an increase in average interest earning assets combined with a fourteen basis point increase in the net interest margin. The average balance of earning assets increased by 3.6% combined with a similar increase in average deposits. The net interest margin increased from 2.12% on a fully taxable equivalent basis in 2016 to 2.26% on the same basis for 2017. This was primarily the result of an increase in rates on earning assets. Prepayment penalties collected decreased from $384,000 for the three months ended September 30, 2016 compared to $2,000 for the same period in 2017. This decrease accounted for an approximate three basis point offset to the increased net interest margin. Also, interest income on a fully taxable equivalent basis increased 13.2%, mainly as a result of an increase in interest earning assets. Interest expense increased 23.8% mainly as a result of an increase in rates paid on deposit balances.

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For the nine months ended September 30, 2017, net interest income on a fully taxable equivalent basis totaled $74,298,000 compared to $65,045,000 for the same period in 2016, an increase of $9,253,000 or 14.2%. This increase in net interest income for the period is primarily due to an increase in average interest earning assets combined with a nine basis point increase in the net interest margin. The average balance of earning assets increased by 9.6% combined with a similar increase in average deposits. The net interest margin increased from 2.15% on a fully taxable equivalent basis in 2016 to 2.24% on the same basis for 2017. This was primarily the result of an increase in rates on earning assets. Prepayment penalties collected increased from $415,000 for the nine months ended September 30, 2016 compared to $861,000 for the same period in 2017. This increase contributed approximately one basis point to the increase in the net interest margin. Also, interest income on a fully taxable equivalent basis increased 15.4%, mainly as a result of an increase in interest earning assets. Interest expense increased 20.1% mainly as a result of an increase in rates paid on deposit balances.

As illustrated in the table above, the main contributors to the increase in net interest income were from securities held-to-maturity, loans and securities available-for-sale. Securities held-to-maturity income increased primarily as a result of an increase in volume. Loans income increased primarily from an increase in volume, this was partially offset by decrease rates on loans from new loan originations. Securities available-for-sale income increased from an increase in rates paid on the portfolio. The Company has a sizable floating rate available-for-sale portfolio. These securities reprice as interest rates rise. The increase in net interest income was partially offset by an increase in interest expense. This was mainly the result of increased rates paid on money market, saving and NOW accounts, and time deposits. The Company has modestly raised interest rates on these products to remain competitive.

Provision for Loan Losses

For the three months ended Sept 30, 2017, the loan loss provision was $450,000 compared to a provision of $375,000 for the same period last year. For the nine months ended September 30, 2017, the loan loss provision was $1,340,000 compared to a provision of $1,175,000 for the same period last year. The increase in the provision, for both time periods presented, was primarily as a result of an increase in loan growth offset, somewhat, by changes in historical loss factors. Further discussion relating to changes in portfolio composition is discussed in footnote number four.

Non-Interest Income and Expense

Other operating income for the quarter ended September 30, 2017 decreased by $283,000 from the same period last year to $3,942,000. This was mainly attributable to a decrease in gains on sales of mortgage loans of $533,000. This was partially offset by an increase of $140,000 in other income and a $106,000 increase in service charges on deposit accounts. Other income increased primarily as a result of an increase in wealth management fees, merchant charge card fees, and other customer fees. Also, service charges on deposit accounts increased primarily as a result of an increase in customer activity. Lockbox income decreased by $24,000, mainly as a result of decreased customer activity.

Other operating income for the nine months ended September 30, 2017 decreased by $380,000 from the same period last year to $12,142,000. This was mainly attributable to a decrease in gains on sales of mortgage loans of $961,000, and a decrease of $64,000 in lock box income. This was partially offset by an increase of $365,000 in other income and a $297,000 increase in service charges on deposit accounts. Other income increased primarily as a result of an increase in wealth management fees, merchant charge card fees, and other customer fees. Also, service charges on deposit accounts increased primarily as a result of an increase in customer activity. Lockbox income decreased mainly as a result of decreased customer activity.

For the quarter ended September 30, 2017, operating expenses decreased by $425,000 or 2.6% to $16,205,000, from the same period last year. The decrease in operating expenses for the quarter was mainly attributable to a decrease of $262,000 in salaries and employee benefits, $88,000 in other expenses, and $82,000 in occupancy expenses. This was partially offset by an increase in equipment expense of $10,000. Salaries and employee benefits decreased mainly as a result of decreased bonus accruals. Other expenses decreased primarily as a result of a decrease in marketing expenses, legal expense, contributions, and customer losses. FDIC assessments decreased slightly primarily as a result of a decrease in the assessment rate. Occupancy costs decreased primarily as a result of decreased rent expense associated with a reduction in rent at select locations. Equipment expenses increased primarily as a result of an increase in service contracts.

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For the nine months ended September 30, 2017, operating expenses increased by $2,526,000 or 5.2% to $51,127,000, from the same period last year. The increase in operating expenses for the nine months was mainly attributable to an increase of $1,784,000 in salaries and employee benefits, $845,000 in other expenses, $158,000 in equipment expenses, and $24,000 in occupancy expenses. This was partially offset by a decrease in FDIC assessments of $285,000. Salaries and employee benefits increased mainly as a result of merit increases and increased bonus accruals. Occupancy cost increased primarily as a result of amortization of leasehold improvements and increased building maintenance costs associated with snow removal. Equipment expenses increased primarily as a result of an increase in service contracts. Other expenses increased primarily as a result of an increase in marketing expenses and increased contributions. FDIC assessments decreased primarily as a result of a decrease in the assessment rate.

Income Taxes

For the third quarter of 2017, the Company’s income tax (benefit) expense totaled $617,000 on pretax income of $8,640,000 resulting in an effective tax rate of 7.1%. For last year’s corresponding quarter, the Company’s income tax expense (benefit) totaled $(52,000) on pretax income of $6,434,000 resulting in an effective tax rate of (0.8)%. The increase in the effective income tax rate was primarily the result of an increase in taxable income. Taxable income increased primarily from an increase in taxable interest income as a percentage of total interest income.

For the nine months ended September 30, 2017, the Company’s income tax expense totaled $1,313,000 on pretax income of $23,589,000 resulting in an effective tax rate of 5.6%. For last year’s corresponding period, the Company’s income tax expense totaled $32,000 on pretax income of $18,066,000 resulting in an effective tax rate of 0.2%. The increase in the effective income tax rate was primarily the result of an increase in taxable income. Taxable income increased primarily from an increase in taxable interest income as a percentage of total interest income.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from interest rate risk inherent in its lending and deposit taking activities. To that end, management actively monitors and manages its interest rate risk exposure. The Company’s profitability is affected by fluctuations in interest rates. A sudden and substantial increase or decrease in interest rates may adversely impact the Company’s earnings to the extent that the interest rates tied to specific assets and liabilities do not change at the same speed, to the same extent, or on the same basis. The Company monitors the impact of changes in interest rates on its net interest income using several tools. The Company’s primary objective in managing interest rate risk is to minimize the adverse impact of changes in interest rates on the Company’s net interest income and capital, while structuring the Company’s asset-liability structure to obtain the maximum yield-cost spread on that structure. Management believes that there has been no material changes in the interest rate risk reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the Securities and Exchange Commission. The information is contained in the Form 10-K within the Market Risk and Asset Liability Management section of Management’s Discussion and Analysis of Results of Operations and Financial Condition.

Item 4. Controls and Procedures

The Company’s management, with participation of the Company’s principal executive and financial officers, has evaluated its disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, the Company’s management, with participation of its principal executive and financial officers, has concluded that the Company’s disclosure controls and procedures are effective. The disclosure controls and procedures also effectively ensure that information required to be disclosed in the Company’s filings and submissions with the Securities and Exchange Commission under the Exchange Act is accumulated and reported to Company management (including the principal executive officer and the principal financial officer) as appropriate to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. In addition, the Company has evaluated its internal control over financial reporting and during the third quarter of 2017 there were no changes that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II – Other Information

Item 1	Legal proceedings – On September 7, 2017, Crimson Galeria Limited Partnership, Raj & Raj, LLC, Harvard Square Holdings LLC, and Charles River Holdings LLC (collectively, the “Plaintiffs”) filed suit in the United States District Court for the District of Massachusetts against the Attorney General of the Commonwealth of Massachusetts, the Massachusetts Department of Public Health, the City of Cambridge, the Town of Georgetown, as well as against the Bank, Healthy Pharms, Inc., (“Healthy Pharms”), Timbuktu Real Estate, LLC, Paul Overgaag, Nathaniel Averill, 4Front Advisors, LLC, 4Front Holdings LLC, Kristopher T. Krane, 3 Brothers Real Estate, LLC, Red Line Management, LLC, unspecified insurance providers to certain Plaintiffs, Tomolly, Inc., and (collectively, the “Defendants”).
	The Plaintiffs allege that they own property in Cambridge, MA, and claim that the value and use of their property will be impaired by Healthy Pharms proposal to open a registered medicinal marijuana dispensary in abutting or nearby situated property. The Plaintiffs further allege that the Bank has a banking relationship with Healthy Pharms and that, by entering into such relationship, the Bank conspired with Healthy Pharms to violate the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. The Plaintiffs seek unspecified damages, as well as injunctive and declaratory relief.
	The Company believes that the claims and allegations against the Bank set forth in the complaint are without merit, and the Company and the Bank intend to vigorously defend against them.
Item 1A	Risk Factors – Please read “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. There have been no material changes since this 10-K was filed. These risks are not the only ones facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and operating results.
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds –
	(a) — (b) Not applicable.
	(c) None
Item 3	Defaults Upon Senior Securities – None
Item 4	Mine Safety Disclosures – Not applicable
Item 5	Other Information – None
Item 6	Exhibits
	31.1	Certification of President and Chief Executive Officer of the Company Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14.
	31.2	Certification of Chief Financial Officer of the Company Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14.
	+ 32.1	Certification of President and Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	+ 32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	+ + 101.	INS XBRL Instance Document
	+ + 101.	SCH XBRL Taxonomy Extension Schema
	+ + 101.	CAL XBRL Taxonomy Extension Calculation Linkbase
	+ + 101.	LAB XBRL Taxonomy Extension Label Linkbase
	+ + 101.	PRE XBRL Taxonomy Extension Presentation Linkbase
	+ + 101.	DEF XBRL Taxonomy Definition Linkbase

+ This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Page 42 of 44

++ As provided in Rule 406T of regulation S-T, this information is filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 and consists of the following materials from Century Bancorp Inc.’s Quarterly Report on 10-Q for the quarter ended September 30, 2017, formatted in XBRL: (i) Consolidated Balance Sheets at September 30, 2017 and December 31, 2016; (ii) Consolidated Statements of Income for the nine months ended September 30, 2017 and 2016; (iii) Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2017 and 2016; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2017 and 2016; (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016; and (vi) Notes to Unaudited Consolidated Interim Financial Statements.

Page 43 of 44

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.

Date: November 6, 2017	Century Bancorp, Inc.
/s/ Barry R. Sloane
Barry R. Sloane
President and Chief Executive Officer
/s/ William P. Hornby
William P. Hornby, CPA
Chief Financial Officer and Treasurer
(Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER OF THE COMPANY

PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14

I, Barry R. Sloane, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Century Bancorp, Inc.;

2. Based on my knowledge, this quarterly 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 quarterly report;

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

4. The registrant’s other certifying officers 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 15d-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 quarterly 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 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 quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and;

d. Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter 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 officers 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 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 involve management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2017	/s/ Barry R. Sloane
	Barry R. Sloane
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER OF THE COMPANY

PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14

I, William P. Hornby, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Century Bancorp, Inc.;

2. Based on my knowledge, this quarterly 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 quarterly report;

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

4. The registrant’s other certifying officers 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 15d-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 quarterly 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 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 quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and;

d. Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter 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 officers 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 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 involve management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2017	/s/ William P. Hornby
	William P. Hornby, CPA
	Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. Section 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Century Bancorp, Inc. (the “Company”) for the quarter ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, certifies, to the best knowledge and belief of the signatory, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 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.

/s/ Barry R. Sloane

Barry R. Sloane

President and Chief Executive Officer

Date: November 6, 2017

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 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.

The foregoing certification is being furnished solely pursuant to Subsections (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code in accordance with Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. Section 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Century Bancorp, Inc. (the “Company”) for the quarter ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, certifies, to the best knowledge and belief of the signatory, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 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.

/s/ William P. Hornby

William P. Hornby, CPA

Chief Financial Officer and Treasurer

Date: November 6, 2017

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 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.

The foregoing certification is being furnished solely pursuant to Subsections (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code in accordance with Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 31, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Trading Symbol	CNBKA
Entity Registrant Name	CENTURY BANCORP INC
Entity Central Index Key	0000812348
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Class A Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		3,605,829
Class B Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,962,080

XML

Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 57,921	$ 62,400
Federal funds sold and interest-bearing deposits in other banks	195,212	173,751
Total cash and cash equivalents	253,133	236,151
Short-term investments		3,183
Securities available-for-sale, amortized cost $388,004 and $500,220, respectively	387,790	499,297
Securities held-to-maturity, fair value $1,637,497 and $1,635,808, respectively	1,654,908	1,653,986
Federal Home Loan Bank of Boston, stock at cost	21,937	21,042
Loans, net:
Construction and land development	16,779	14,928
Commercial and industrial	702,646	612,503
Municipal	128,412	135,418
Commercial real estate	735,844	696,173
Residential real estate	272,588	241,357
Consumer and other	18,594	11,013
Home equity	237,094	211,857
Overdrafts	690	684
Total loans, net	2,112,647	1,923,933
Less: allowance for loan losses	25,698	24,406
Net loans	2,086,949	1,899,527
Bank premises and equipment	23,932	23,417
Accrued interest receivable	9,926	9,645
Goodwill	2,714	2,714
Other assets	116,783	113,646
Total assets	4,558,072	4,462,608
Deposits:
Demand deposits	702,527	689,286
Savings and NOW deposits	1,276,135	1,304,394
Money market accounts	1,019,741	1,181,179
Time deposits	607,279	478,359
Total deposits	3,605,682	3,653,218
Securities sold under agreements to repurchase	228,848	182,280
Other borrowed funds	358,000	293,000
Subordinated debentures	36,083	36,083
Due to broker	5,911
Other liabilities	60,900	57,986
Total liabilities	4,295,424	4,222,567
Stockholders' Equity
Preferred Stock - $1.00 par value; 100,000 shares authorized; no shares issued and outstanding
Additional paid-in capital	12,292	12,292
Retained earnings	264,191	243,565
Stockholders' equity before adjustment of accumulated other comprehensive income (loss)	282,051	261,425
Unrealized losses on securities available-for-sale, net of taxes	(140)	(567)
Unrealized losses on securities transferred to held-to-maturity, net of taxes	(3,228)	(4,084)
Pension liability, net of taxes	(16,035)	(16,733)
Total accumulated other comprehensive loss, net of taxes	(19,403)	(21,384)
Total stockholders' equity	262,648	240,041
Total liabilities and stockholders' equity	4,558,072	4,462,608
Class A Common Stock [Member]
Stockholders' Equity
Common stock value	3,606	3,601
Total stockholders' equity	3,606	3,601
Class B Common Stock [Member]
Stockholders' Equity
Common stock value	1,962	1,967
Total stockholders' equity	$ 1,962	$ 1,967

XML

Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Amortized cost	$ 388,004	$ 500,220
Held-to-maturity securities, fair value	$ 1,637,497	$ 1,635,808
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	100,000	100,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Class A Common Stock [Member]
Common stock, par value	$ 1.00	$ 1.00
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	3,605,829	3,600,729
Class B Common Stock [Member]
Common stock, par value	$ 1.00	$ 1.00
Common stock, shares authorized	5,000,000	5,000,000
Common stock, shares issued	1,962,080	1,967,180

XML

Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest income
Loans	$ 16,658	$ 15,045	$ 48,668	$ 43,380
Securities held-to-maturity	9,447	8,238	28,806	24,178
Securities available-for-sale	1,809	1,439	5,143	3,546
Federal funds sold and interest-bearing deposits in other banks	607	283	1,349	906
Total interest income	28,521	25,005	83,966	72,010
Interest expense
Savings and NOW deposits	1,727	1,083	4,454	2,859
Money market accounts	1,395	909	3,903	2,485
Time deposits	2,095	1,464	5,648	4,216
Securities sold under agreements to repurchase	129	122	352	363
Other borrowed funds and subordinated debentures	1,822	2,213	5,695	6,767
Total interest expense	7,168	5,791	20,052	16,690
Net interest income	21,353	19,214	63,914	55,320
Provision for loan losses	450	375	1,340	1,175
Net interest income after provision for loan losses	20,903	18,839	62,574	54,145
Other operating income
Service charges on deposit accounts	2,089	1,983	6,179	5,882
Lockbox fees	735	759	2,367	2,431
Net gains on sales of securities	47	19	47	64
Gains on sales of mortgage loans		533	370	1,331
Other income	1,071	931	3,179	2,814
Total other operating income	3,942	4,225	12,142	12,522
Operating expenses
Salaries and employee benefits	10,282	10,544	32,144	30,360
Occupancy	1,427	1,509	4,663	4,639
Equipment	782	772	2,245	2,087
FDIC assessments	340	343	1,218	1,503
Other	3,374	3,462	10,857	10,012
Total operating expenses	16,205	16,630	51,127	48,601
Income before income taxes	8,640	6,434	23,589	18,066
Provision for income taxes	617	(52)	1,313	32
Net income	$ 8,023	$ 6,486	$ 22,276	$ 18,034
Class A Common Stock [Member]
Share data:
Weighted average number of shares outstanding, basic	3,605,829	3,600,729	3,603,429	3,600,729
Weighted average number of shares outstanding, diluted	5,567,909	5,567,909	5,567,909	5,567,909
Basic earnings per share	$ 1.75	$ 1.41	$ 4.86	$ 3.93
Diluted earnings per share	$ 1.44	$ 1.16	$ 4.00	$ 3.24
Class B Common Stock [Member]
Share data:
Weighted average number of shares outstanding, basic	1,962,080	1,967,180	1,964,480	1,967,180
Weighted average number of shares outstanding, diluted	1,962,080	1,967,180	1,964,480	1,967,180
Basic earnings per share	$ 0.87	$ 0.71	$ 2.43	$ 1.97
Diluted earnings per share	$ 0.87	$ 0.71	$ 2.43	$ 1.97

XML

Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 8,023	$ 6,486	$ 22,276	$ 18,034
Unrealized gains (losses) on securities:
Unrealized (losses) gains arising during period	122	(98)	455	(109)
Less: reclassification adjustment for gains included in net income	(28)	(12)	(28)	(39)
Total unrealized (losses) gains on securities	94	(110)	427	(148)
Accretion of net unrealized losses transferred	223	527	856	2,274
Defined benefit pension plans:
Amortization of prior service cost and loss included in net periodic benefit cost	233	242	698	727
Other comprehensive income	550	659	1,981	2,853
Comprehensive income	$ 8,573	$ 7,145	$ 24,257	$ 20,887

XML

Consolidated Statements of Changes in Stockholders' Equity (unaudited) - USD ($) $ in Thousands	Total	Class A Common Stock [Member]	Class B Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Retained Earnings [Member] Class A Common Stock [Member]	Retained Earnings [Member] Class B Common Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning balance at Dec. 31, 2015	$ 214,544	$ 3,601	$ 1,967	$ 12,292	$ 221,232			$ (24,548)
Net income	18,034				18,034
Other comprehensive income, net of tax:
Unrealized holding (losses) gains arising during period, net of taxes	(148)							(148)
Accretion of unrealized losses on securities transferred to held-to-maturity, net of taxes	2,274							2,274
Pension liability adjustment, net of taxes	727							727
Cash dividends						$ (1,296)	$ (354)
Ending balance at Sep. 30, 2016	233,781	3,601	1,967	12,292	237,616			(21,695)
Beginning balance at Dec. 31, 2016	240,041	3,601	1,967	12,292	243,565			(21,384)
Net income	22,276				22,276
Other comprehensive income, net of tax:
Unrealized holding (losses) gains arising during period, net of taxes	427							427
Accretion of unrealized losses on securities transferred to held-to-maturity, net of taxes	856							856
Pension liability adjustment, net of taxes	698							698
Conversion of Class B Common Stock to Class A Common Stock		5	(5)
Cash dividends						$ (1,297)	$ (353)
Ending balance at Sep. 30, 2017	$ 262,648	$ 3,606	$ 1,962	$ 12,292	$ 264,191			$ (19,403)

XML

Consolidated Statements of Changes in Stockholders' Equity (unaudited) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Unrealized holding (losses) gains arising during period, taxes	$ 282	$ 128
Realized net gains	47	64
Accretion of net unrealized losses transferred during the period, taxes	1,022	1,216
Pension liability adjustment, taxes	$ 465	$ 484
Class A Common Stock [Member]
Conversion of Class B Common Stock to Class A Common Stock, shares	5,100
Cash dividends, per share	$ 0.36	$ 0.36
Class B Common Stock [Member]
Conversion of Class B Common Stock to Class A Common Stock, shares	5,100
Cash dividends, per share	$ 0.18	$ 0.18

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 22,276	$ 18,034
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Gain on sales of mortgage loans	(370)	(1,331)
Net gains on sales of securities	(47)	(64)
Provision for loan losses	1,340	1,175
Deferred income taxes	(3,477)	(3,143)
Net depreciation and amortization	2,444	2,498
(Increase) decrease in accrued interest receivable	(281)	405
Increase in other assets	(1,478)	(3,877)
Increase in other liabilities	4,076	3,484
Net cash provided by operating activities	24,483	17,181
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds (purchase) of short-term investments	3,183	(8)
Proceeds from redemptions of Federal Home Loan Bank of Boston stock	7,175	10,276
Purchase of Federal Home Loan Bank of Boston stock	(8,070)	(2,617)
Proceeds from calls/maturities of securities available-for-sale	211,576	206,025
Proceeds from sales of securities available-for-sale	18,133	2,376
Purchase of securities available-for-sale	(111,777)	(328,565)
Proceeds from calls/maturities of securities held-to-maturity	231,953	318,815
Proceeds from sales of securities held-to-maturity	0	192
Purchase of securities held-to-maturity	(230,813)	(441,756)
Net increase in loans	(215,063)	(182,901)
Proceeds from sales of portfolio loans	26,701	74,668
Capital expenditures	(2,881)	(1,408)
Net cash used in investing activities	(69,883)	(344,903)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in time deposits	128,920	(18,795)
Net (decrease) increase in demand, savings, money market and NOW deposits	(176,456)	404,848
Cash dividends	(1,650)	(1,650)
Net increase in securities sold under agreements to repurchase	46,568	16,470
Net increase (decrease) in other borrowed funds	65,000	(75,000)
Net cash provided by financing activities	62,382	325,873
Net increase (decrease) in cash and cash equivalents	16,982	(1,849)
Cash and cash equivalents at beginning of period	236,151	220,724
Cash and cash equivalents at end of period	253,133	218,875
Cash paid during the period for:
Interest	20,055	16,806
Income taxes	4,830	2,730
Change in unrealized gains (losses) on securities available-for-sale, net of taxes	427	(148)
Change in unrealized losses on securities transferred to held-to-maturity, net of taxes	856	2,274
Pension liability adjustment, net of taxes	698	727
Change in due to (from) to broker	$ 5,911	$ 1,847

XML

Basis of Financial Statement Presentation

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Financial Statement Presentation

Note 1. Basis of Financial Statement Presentation

The consolidated financial statements include the accounts of Century Bancorp, Inc. (the “Company”) and its wholly owned subsidiary, Century Bank and Trust Company (the “Bank”). The consolidated financial statements also include the accounts of the Bank’s wholly owned subsidiaries, Century Subsidiary Investments, Inc. (“CSII”), Century Subsidiary Investments, Inc. II (“CSII II”), Century Subsidiary Investments, Inc. III (“CSII III”) and Century Financial Services Inc. (“CFSI”). CSII, CSII II, and CSII III are engaged in buying, selling and holding investment securities. CFSI has the power to engage in financial agency, securities brokerage, and investment and financial advisory services and related securities credit. The Company also owns 100% of Century Bancorp Capital Trust II (“CBCT II”). The entity is an unconsolidated subsidiary of the Company.

All significant intercompany accounts and transactions have been eliminated in consolidation. The Company provides a full range of banking services to individual, business and municipal customers in Massachusetts, New Hampshire, Rhode Island, Connecticut, and New York. As a bank holding company, the Company is subject to the regulation and supervision of the Federal Reserve Board. The Bank, a state chartered financial institution, is subject to supervision and regulation by applicable state and federal banking agencies, including the Federal Reserve Board, the Federal Deposit Insurance Corporation (the “FDIC”) and the Commonwealth of Massachusetts Commissioner of Banks. The Bank is also subject to various requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered. Various consumer laws and regulations also affect the operations of the Bank. In addition to the impact of regulation, commercial banks are affected significantly by the actions of the Federal Reserve Board as it attempts to control the money supply and credit availability in order to influence the economy. All aspects of the Company’s business are highly competitive. The Company faces aggressive competition from other lending institutions and from numerous other providers of financial services. The Company has one reportable operating segment.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and general practices within the banking industry. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ from those estimates. The Company’s quarterly report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the Securities and Exchange Commission.

Material estimates that are susceptible to change in the near term relate to the allowance for loan losses. Management believes that the allowance for loan losses is adequate based on independent appraisals and review of other factors, including historical charge-off rates with additional allocations based on risk factors for each category and general economic factors. While management uses available information to recognize loan losses, future additions to the allowance for loan losses may be necessary based on changes in economic conditions. In addition, regulatory agencies periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination. Certain reclassifications are made to prior-year amounts whenever necessary to conform with the current-year presentation.

XML

Securities Available-for-Sale

9 Months Ended

Sep. 30, 2017

Text Block [Abstract]

Securities Available-for-Sale

Note 2. Securities Available-for-Sale

	September 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	$	—	$	5	$	1,994	$	2,000	$	—	$	—	$	2,000
U.S. Government Sponsored Enterprises		—		—		—		—		25,000		—		48		24,952
SBA Backed Securities		80,906		40		182		80,764		57,899		14		146		57,767
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		219,268		504		269		219,503		243,703		293		671		243,325
Privately Issued Residential Mortgage-Backed Securities		960		4		10		954		1,121		2		14		1,109
Obligations Issued by States and Political Subdivisions		79,655		—		410		79,245		165,281		—		405		164,876
Other Debt Securities		5,100		76		189		4,987		5,100		18		194		4,924
Equity Securities		116		227		—		343		116		228		—		344
Total	$	388,004	$	851	$	1,065	$	387,790	$	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 $165,178,000 and $210,780,000 at September 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 $49,248,000 and $53,396,000 at September 30, 2017 and December 31, 2016, respectively. The Company realized gross gains of $47,000 from the proceeds of $18,133,000 from the sales of available-for-sale securities for the nine months ended September 30, 2017. The Company realized gross gains of $52,000 from the proceeds of $2,376,000 from the sales of available-for-sales securities for the nine months ended September 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 September 30, 2017.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	68,921	$	68,915
After one but within five years		126,680		126,824
After five but within ten years		96,671		96,759
More than 10 years		94,116		93,597
Non-maturing		1,616		1,695
Total	$	388,004	$	387,790

The weighted average remaining life of investment securities available-for-sale at September 30, 2017 was 5.8 years. 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 September 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 U.S. Treasury, SBA Backed Securities, U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities, Privately Issued Residential 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 September 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 10 and 29 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 246 holdings at September 30, 2017.

	September 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	$	1,994	$	5	$	—	$	—	$	1,994	$	5
U.S. Government Sponsored Enterprises		—		—		—		—		—		—
SBA Backed Securities		10,561		28		44,789		154		55,350		182
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		30,914		77		59,918		192		90,832		269
Privately Issued Residential Mortgage-Backed Securities		—		—		671		10		671		10
Obligations Issued by States and Political Subdivisions		—		—		4,297		410		4,297		410
Other Debt Securities		399		1		1,812		188		2,211		189
Total temporarily impaired securities	$	43,868	$	111	$	111,487	$	954	$	155,355	$	1,065

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.

	December 31, 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. 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

XML

Investment Securities Held-to-Maturity

9 Months Ended

Sep. 30, 2017

Text Block [Abstract]

Investment Securities Held-to-Maturity

Note 3. Investment Securities Held-to-Maturity

	September 30, 2017								December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in thousands)
U.S. Government Sponsored Enterprises	$	114,527	$	828	$	281	$	115,074	$	148,326	$	1,066	$	527	$	148,865
SBA Backed Securities		58,844		3		1,003		57,844		46,140		—		1,088		45,052
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities		1,481,537		4,970		21,928		1,464,579		1,459,520		4,948		22,577		1,441,891
Total	$	1,654,908	$	5,801	$	23,212	$	1,637,497	$	1,653,986	$	6,014	$	24,192	$	1,635,808

Included in U.S. Government and Agency Securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $1,221,518,000 and $1,147,207,000 at September 30, 2017 and December 31, 2016, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank of Boston at fair value amounting to $291,330,000 and $424,353,000 at September 30, 2017 and December 31, 2016, respectively. There were no sales of held-to-maturity securities for the nine months ended September 30, 2017. The Company realized gross gains of $12,000 from the proceeds of $192,000 from the sales of securities held-to-maturity for the nine months ended September 30, 2016. The sales of securities held-to-maturity relate to certain mortgage backed securities for which the Company had previously collected a substantial portion of its principal investment.

At September 30, 2017 and December 31, 2016, all mortgage-backed securities are obligations of U.S. Government Agencies and Government Sponsored Enterprises. 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 held-to-maturity at September 30, 2017.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	39,780	$	39,804
After one but within five years		1,219,826		1,208,388
After five but within ten years		392,012		386,114
More than ten years		3,290		3,191
Total	$	1,654,908	$	1,637,497

The weighted average remaining life of investment securities held-to-maturity at September 30, 2017 was 4.2 years. Included in the weighted average remaining life calculation at September 30, 2017 were $20,496,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The actual maturities, which were used in the table above, of mortgage-backed securities, will differ from the contractual maturities, due to the ability of the issuers to prepay underlying obligations.

As of September 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 likely that it will be required to sell these debt securities before the anticipated recovery of their remaining amortized costs. In making its other-than-temporary impairment evaluation, the Company considered the fact that the principal and interest on these securities are from issuers that are investment grade.

The unrealized loss on U.S. Government Sponsored Enterprises, 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 does not intend to sell any of these securities and it is not likely that it will be required to sell these securities before the anticipated recovery of the remaining amortized cost, the Company does not consider these investments to be other-than-temporarily impaired September 30, 2017 and December 31, 2016.

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.

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at

September 30, 2017. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months or longer. There are 129 and 88 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 392 holdings at September 30, 2017.

	September 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. Government Sponsored Enterprises	$	35,226	$	270	$	4,989	$	11	$	40,215	$	281
SBA Backed Securities		45,551		659		9,275		344		54,826		1,003
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		652,183		9,601		431,094		12,327		1,083,277		21,928
Total temporarily impaired securities	$	732,960	$	10,530	$	445,358	$	12,682	$	1,178,318	$	23,212

The following table shows the temporarily impaired securities of the Company’s held-to-maturity 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 194 and 16 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 375 holdings at December 31, 2016.

	December 31, 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. Government Sponsored Enterprises	$	59,219	$	527	$	—	$	—	$	59,219	$	527
SBA Backed Securities		45,052		1,088		—		—		45,052		1,088
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		1,008,960		20,725		58,535		1,852		1,067,495		22,577
Total temporarily impaired securities	$	1,113,231	$	22,340	$	58,535	$	1,852	$	1,171,766	$	24,192

XML

Allowance for Loan Losses

9 Months Ended

Sep. 30, 2017

Receivables [Abstract]

Allowance for Loan Losses

Note 4. Allowance for Loan Losses

The Company maintains an allowance for loan losses in an amount determined by management on the basis of the character of the loans, loan performance, financial condition of borrowers, the value of collateral securing loans and other relevant factors.

The following table summarizes the changes in the Company’s allowance for loan losses for the periods indicated.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
	(in thousands)
Allowance for loan losses, beginning of period	$	25,289		$	23,863		$	24,406		$	23,075
Loans charged off		(95	)		(118	)		(292	)		(298	)
Recoveries on loans previously charged-off		54			93			244			345
Net recoveries (charge-offs)		(41	)		(25	)		(48	)		47
Provision charged to expense		450			375			1,340			1,175
Reclassification to other liabilities *		—			(5	)		—			(89	)
Allowance for loan losses, end of period	$	25,698		$	24,208		$	25,698		$	24,208

* The reclassification relates to allowance for loan loss allocations on unused commitments that have been reclassified to other liabiliites.

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2017 follows:

	Construction and Land Development		Commercial and Industrial			Municipal		Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at June 30, 2017	$	1,137	$	7,563		$	1,859	$	11,028		$	2,118		$	195		$	1,146		$	243		$	25,289
Charge-offs		—		(20	)		—		—			—			(75	)		—			—			(95	)
Recoveries		—		9			—		—			—			45			—			—			54
Provision		323		1,297			265		(1,491	)		(45	)		220			(103	)		(16	)		450
Ending balance at September 30, 2017	$	1,460	$	8,849		$	2,124	$	9,537		$	2,073		$	385		$	1,043		$	227		$	25,698
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	8		$	—	$	111		$	67		$	—		$	—		$	—		$	186
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,460	$	8,841		$	2,124	$	9,426		$	2,006		$	385		$	1,043		$	227		$	25,512
Loans:
Ending balance	$	16,779	$	702,646		$	128,412	$	735,844		$	272,588		$	19,284		$	237,094		$	—		$	2,112,647
Loans deemed to be impaired	$	—	$	366		$	—	$	2,583		$	4,318		$	—		$	—		$	—		$	7,267
Loans not deemed to be impaired	$	16,779	$	702,280		$	128,412	$	733,261		$	268,270		$	19,284		$	237,094		$	—		$	2,105,380
Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2017 follows:
	Construction and Land Development		Commercial and Industrial			Municipal		Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at December 31, 2016	$	1,012	$	6,972		$	1,612	$	11,135		$	1,698		$	582		$	1,102		$	293		$	24,406
Charge-offs		—		(49	)		—		—			—			(243	)		—			—			(292	)
Recoveries		—		63			—		—			2			179			—			—			244
Provision		448		1,863			512		(1,598	)		373			(133	)		(59	)		(66	)		1,340
Ending balance at September 30, 2017	$	1,460	$	8,849		$	2,124	$	9,537		$	2,073		$	385		$	1,043		$	227		$	25,698
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	8		$	—	$	111		$	67		$	—		$	—		$	—		$	186
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,460	$	8,841		$	2,124	$	9,426		$	2,006		$	385		$	1,043		$	227		$	25,512
Loans:
Ending balance	$	16,779	$	702,646		$	128,412	$	735,844		$	272,588		$	19,284		$	237,094		$	—		$	2,112,647
Loans deemed to be impaired	$	—	$	366		$	—	$	2,583		$	4,318		$	—		$	—		$	—		$	7,267
Loans not deemed to be impaired	$	16,779	$	702,280		$	128,412	$	733,261		$	268,270		$	19,284		$	237,094		$	—		$	2,105,380

During the nine months ending September 30, 2017, the Company’s provision was primarily attributable to an increase in commercial and industrial, construction and land development, and residential real estate balances offset, somewhat, by changes in historical loss rates and qualitative factors. During the three months ending September 30, 2017 the Company’s provision was primarily attributable to an increase in commercial and industrial loan balances offset, somewhat, by changes in historical loss rates and qualitative factors.

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2016 follows:

	Construction and Land Development			Commercial and Industrial			Municipal			Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at June 30, 2016	$	2,234		$	5,842		$	1,801		$	10,650		$	1,302		$	608		$	1,158		$	268		$	23,863
Charge-offs		—			—			—			—			—			(91	)		(27	)		—			(118	)
Recoveries		—			24			—			—			2			67			—			—			93
Provision		(3	)		307			(29	)		(752	)		624			5			155			68			375
Reclassification to other liabilities		—			—			—			—			—			—			(5	)		—			(5	)
Ending balance at September 30, 2016	$	2,231		$	6,173		$	1,772		$	9,898		$	1,928		$	589		$	1,281		$	336		$	24,208
Amount of allowance for loan losses for loans deemed to be impaired	$	4		$	9		$	—		$	143		$	7		$	—		$	—		$	—		$	163
Amount of allowance for loan losses for loans not deemed to be impaired	$	2,227		$	6,164		$	1,772		$	9,755		$	1,921		$	589		$	1,281		$	336		$	24,045
Loans:
Ending balance	$	19,522		$	549,290		$	145,063		$	692,778		$	222,881		$	11,474		$	200,085		$	—		$	1,841,093
Loans deemed to be impaired	$	95		$	399		$	—		$	3,707		$	208		$	—		$	—		$	—		$	4,409
Loans not deemed to be impaired	$	19,427		$	548,891		$	145,063		$	689,071		$	222,673		$	11,474		$	200,085		$	—		$	1,836,684
Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2016 follows:
	Construction and Land Development			Commercial and Industrial			Municipal			Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at December 31, 2015	$	2,041		$	5,899		$	994		$	10,589		$	1,320		$	644		$	1,077		$	511		$	23,075
Charge-offs		—			—			—			—			—			(271	)		(27	)		—			(298	)
Recoveries		—			115			—			—			5			225			—			—			345
Provision		193			188			778			(680	)		605			(6	)		272			(175	)		1,175
Reclassification to other liabilities		(3	)		(29	)		—			(11	)		(2	)		(3	)		(41	)		—			(89	)
Ending balance at September 30, 2016	$	2,231		$	6,173		$	1,772		$	9,898		$	1,928		$	589		$	1,281		$	336		$	24,208
Amount of allowance for loan losses for loans deemed to be impaired	$	4		$	9		$	—		$	143		$	7		$	—		$	—		$	—		$	163
Amount of allowance for loan losses for loans not deemed to be impaired	$	2,227		$	6,164		$	1,772		$	9,755		$	1,921		$	589		$	1,281		$	336		$	24,045
Loans:
Ending balance	$	19,522		$	549,290		$	145,063		$	692,778		$	222,881		$	11,474		$	200,085		$	—		$	1,841,093
Loans deemed to be impaired	$	95		$	399		$	—		$	3,707		$	208		$	—		$	—		$	—		$	4,409
Loans not deemed to be impaired	$	19,427		$	548,891		$	145,063		$	689,071		$	222,673		$	11,474		$	200,085		$	—		$	1,836,684

During the nine months ending September 30, 2016, the Company’s provision was primarily attributable to an increase in municipal and residential real estate balances, offset, somewhat by changes in historical loss and qualitative factors. During the three months ending September 30, 2016 the Company’s provision was primarily attributable to an increase in commercial and industrial loan balances.

The Company utilizes a six grade internal loan rating system for commercial real estate, construction and commercial loans as follows:

Loans rated 1-3 (Pass):

Loans in this category are considered “pass” rated loans with low to average risk.

Loans rated 4 (Monitor):

These loans represent classified loans that management is closely monitoring for credit quality. These loans have had or may have minor credit quality deterioration as of September 30, 2017 and December 31, 2016.

Loans rated 5 (Substandard):

Substandard loans represent classified loans that management is closely monitoring for credit quality. These loans have had more significant credit quality deterioration as of September 30, 2017 and December 31, 2016.

Loans rated 6 (Doubtful):

Doubtful loans represent classified loans that management is closely monitoring for credit quality. These loans had more significant credit quality deterioration as of September 30, 2017 and December 31, 2016 and are doubtful for full collection.

Impaired:

Impaired loans represent classified loans that management is closely monitoring for credit quality. A loan is classified as impaired when it is probable that the Company will be unable to collect all amounts due.

The following table presents the Company’s loans by risk rating at September 30, 2017.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	16,779	$	696,934	$	128,412	$	708,558
4 (Monitor)		—		5,346		—		24,703
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		366		—		2,583
Total	$	16,779	$	702,646	$	128,412	$	735,844

The following table presents the Company’s loans by risk rating at December 31, 2016.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	14,834	$	612,114	$	135,418	$	661,271
4 (Monitor)		—		—		—		31,753
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		94		389		—		3,149
Total	$	14,928	$	612,503	$	135,418	$	696,173

The Company has increased its exposure to larger loans to large institutions with publically available credit ratings beginning in 2015. These ratings are tracked as a credit quality indicator for these loans. Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at September 30, 2017 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	365,441	$	62,657	$	45,371	$	473,469
A1 – A3		247,253		7,770		128,743		383,766
Baa1 – Baa3		—		46,970		124,932		171,902
Ba2		—		8,165		—		8,165
Total	$	612,694	$	125,562	$	299,046	$	1,037,302

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2016.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	334,674	$	66,245	$	6,596	$	407,515
A1 – A3		188,777		33,365		129,423		351,565
Baa1 – Baa3		—		26,970		127,366		154,336
Ba2		—		3,610		—		3,610
Total	$	523,451	$	130,190	$	263,385	$	917,026

The Company utilized payment performance as credit quality indicators for the loan types listed below. The indicators are depicted in the table “aging of past due loans,” below.

Further information pertaining to the allowance for loan losses at September 30, 2017 follows:

	Accruing 30-89 Days Past Due		Non Accrual		Accruing Greater than 90 Days		Total Past Due		Current Loans		Total
	(in thousands)
Construction and land development	$	—	$	—	$	—	$	—	$	16,779	$	16,779
Commercial and industrial		159		55		—		214		702,432		702,646
Municipal		—		—		—		—		128,412		128,412
Commercial real estate		611		225		—		836		735,008		735,844
Residential real estate		237		670		—		907		271,681		272,588
Consumer and overdrafts		11		—		—		11		19,273		19,284
Home equity		1,032		648		—		1,680		235,414		237,094
Total	$	2,050	$	1,598	$	—	$	3,648	$	2,108,999	$	2,112,647

Further information pertaining to the allowance for loan losses at December 31, 2016 follows:

	Accruing 30-89 Days Past Due		Non Accrual		Accruing Greater than 90 Days		Total Past Due		Current Loans		Total
	(in thousands)
Construction and land development	$	—	$	94	$	—	$	94	$	14,834	$	14,928
Commercial and industrial		37		65		—		102		612,401		612,503
Municipal		—		—		—		—		135,418		135,418
Commercial real estate		597		150		—		747		695,426		696,173
Residential real estate		245		656		—		901		240,456		241,357
Consumer and overdrafts		—		11		—		11		11,686		11,697
Home equity		735		108		—		843		211,014		211,857
Total	$	1,614	$	1,084	$	—	$	2,698	$	1,921,235	$	1,923,933

A loan is impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. When a loan is impaired, the Company measures impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except that as a practical expedient, the Company measures impairment based on a loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Loans are charged-off when management believes that the collectability of the loan’s principal is not probable. The specific factors that management considers in making the determination that the collectability of the loan’s principal is not probable include: the delinquency status of the loan, the fair value of the collateral, if secured, and the financial strength of the borrower and/or guarantors. For collateral dependent loans, the amount of the recorded investment in a loan that exceeds the fair value of the collateral is charged-off against the allowance for loan losses in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible. The Company’s policy for recognizing interest income on impaired loans is contained within Note 1 of the consolidated financial statements contained in the Company’s Annual Report for the fiscal year ended December 31, 2016.

The following is information pertaining to impaired loans for September 30, 2017:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/17		Interest Income Recognized for 3 Months Ending 9/30/17		Average Carrying Value for 9 Months Ending 9/30/17		Interest Income Recognized for 9 Months Ending 9/30/17
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		54		261		—		60		—		49		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		91		109		—		45		—		313		—
Residential real estate		72		163		—		75		2		81		5
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	217	$	533	$	—	$	180	$	2	$	443	$	5
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	56	$	—
Commercial and industrial		312		328		8		319		4		328		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,492		2,599		111		2,547		22		2,542		69
Residential real estate		4,246		4,247		67		4,257		19		1,767		36
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	7,050	$	7,174	$	186	$	7,123	$	45	$	4,693	$	117
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	56	$	—
Commercial and industrial		366		589		8		379		4		377		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,583		2,708		111		2,592		22		2,855		69
Residential real estate		4,318		4,410		67		4,332		21		1,848		41
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	7,267	$	7,707	$	186	$	7,303	$	47	$	5,136	$	122

The following is information pertaining to impaired loans for September 30, 2016:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/16		Interest Income Recognized for 3 Months Ending 9/30/16		Average Carrying Value for 9 Months Ending 9/30/16		Interest Income Recognized for 9 Months Ending 9/30/16
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		228		414		—		51		2		54		7
Municipal		—		—		—		—		—		—		—
Commercial real estate		593		593		—		594		9		310		30
Residential real estate		97		186		—		101		2		106		6
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	918	$	1,193	$	—	$	746	$	13	$	470	$	43
With required reserve recorded:
Construction and land development	$	95	$	108	$	4	$	96	$	—	$	97	$	—
Commercial and industrial		171		187		9		353		2		367		7
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,114		3,219		143		3,128		31		2,251		64
Residential real estate		111		110		7		111		1		387		4
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		36		—
Total	$	3,491	$	3,624	$	163	$	3,688	$	34	$	3,138	$	75
Total:
Construction and land development	$	95	$	108	$	4	$	96	$	—	$	97	$	—
Commercial and industrial		399		601		9		404		4		421		14
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,707		3,812		143		3,722		40		2,561		94
Residential real estate		208		296		7		212		3		493		10
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		36		—
Total	$	4,409	$	4,817	$	163	$	4,434	$	47	$	3,608	$	118

There was no troubled debt restructurings that occurred during the nine month period ended September 30, 2017.

There was one commercial real estate troubled debt restructuring during the nine month period ending September 30, 2016. The pre-modification and post-modification outstanding recorded investment was $2,091,000. The loan was modified for 2016, by reducing the interest rate as well as extending the term on the loan. The financial impact for the modification was $7,000 reduction in principal payments and $2,000 reduction in interest payments for the three month period. The financial impact for the modification was $10,000 reduction in principal payments and $2,000 reduction in interest payments for the nine month period.

There were no troubled debt restructurings that subsequently defaulted during the three and nine month periods ending September 30, 2016.

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Reclassifications Out of Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2017

Text Block [Abstract]

Reclassifications Out of Accumulated Other Comprehensive Income

Note 5. Reclassifications Out of Accumulated Other Comprehensive Income (a)

Amount Reclassified from Accumulated Other Comprehensive Income

Details about Accumulated Other Comprehensive Income Components	Three Months Ended September 30, 2017			Three Months Ended September 30, 2016			Affected Line Item in the Statement where Net Income is Presented
(in thousands)
Unrealized gains and losses on available-for-sale securities	$	47		$	19		Net gains on sales of investments
		(19	)		(7	)	Provision for income taxes
	$	28		$	12		Net income
Accretion of unrealized losses transferred	$	(554	)	$	(809	)	Interest on securities held-to-maturity
		331			282		Provision for income taxes
	$	(223	)	$	(527	)	Net income
Amortization of defined benefit pension items
Prior-service costs	$	(3	)(b)	$	(3	)(b)	Salaries and employee benefits
Actuarial gains (losses)		(385	)(b)		(401	)(b)	Salaries and employee benefits
Total before tax		(388	)		(404	)	Income before taxes
		155			162		Provision for income taxes
	$	(233	)	$	(242	)	Net income
Details about Accumulated Other Comprehensive Income Components	Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016			Affected Line Item in the Statement where Net Income is Presented
(in thousands)
Unrealized gains and losses on available-for-sale securities	$	47		$	64		Net gains on sales of investments
		(19	)		(25	)	Provision for income taxes
	$	28		$	39		Net income
Accretion of unrealized losses transferred	$	(1,878	)	$	(3,490	)	Interest on securities held-to-maturity
		1,022			1,216		Provision for income taxes
	$	(856	)	$	(2,274	)	Net income
Amortization of defined benefit pension items
Prior-service costs	$	(8	)(b)	$	(8	)(b)	Salaries and employee benefits
Actuarial gains (losses)		(1,155	)(b)		(1,203	)(b)	Salaries and employee benefits
Total before tax		(1,163	)		(1,211	)	Income before taxes
		465			484		Provision for income taxes
	$	(698	)	$	(727	)	Net income

(a) Amount in parentheses indicates reductions to net income.

(b) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Employee Benefits footnote (Note 7) for additional details).

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Earnings per Share ("EPS")

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Earnings per Share ("EPS")

Note 6. Earnings per Share (“EPS”)

Class A and Class B shares participate equally in undistributed earnings. Under the Company’s Articles of Organization, the holders of Class A Common Stock are entitled to receive dividends per share equal to at least 200% of dividends paid, if any, from time to time, on each share of Class B Common Stock.

Diluted EPS includes the dilutive effect of common stock equivalents; basic EPS excludes all common stock equivalents. The Company had no common stock equivalents outstanding for the periods ended September 30, 2017 and 2016.

The following table is a reconciliation of basic EPS and diluted EPS.

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands except share and per share data)	2017		2016		2017		2016
Basic EPS Computation:
Numerator:
Net income, Class A	$	6,307	$	5,094	$	17,505	$	14,165
Net income, Class B		1,716		1,392		4,771		3,869
Denominator:
Weighted average shares outstanding, Class A		3,605,829		3,600,729		3,603,429		3,600,729
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Basic EPS, Class A	$	1.75	$	1.41	$	4.86	$	3.93
Basic EPS, Class B		0.87		0.71		2.43		1.97
Diluted EPS Computation:
Numerator:
Net income, Class A	$	6,307	$	5,094	$	17,505	$	14,165
Net income, Class B		1,716		1,392		4,771		3,869
Total net income, for diluted EPS, Class A computation		8,023		6,486		22,276		18,034
Denominator:
Weighted average shares outstanding, basic, Class A		3,605,829		3,600,729		3,603,429		3,600,729
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Weighted average shares outstanding diluted, Class A		5,567,909		5,567,909		5,567,909		5,567,909
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Diluted EPS, Class A	$	1.44	$	1.16	$	4.00	$	3.24
Diluted EPS, Class B		0.87		0.71		2.43		1.97

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Employee Benefits

9 Months Ended

Sep. 30, 2017

Retirement Benefits [Abstract]

Employee Benefits

Note 7. Employee Benefits

The Company provides pension benefits to its employees under a noncontributory, defined benefit plan which is funded on a current basis in compliance with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”) and recognizes costs over the estimated employee service period.

The Company also has a Supplemental Executive Insurance/Retirement Plan (the “Supplemental Plan”) which is limited to certain officers and employees of the Company. The Supplemental Plan is accrued on a current basis and recognizes costs over the estimated employee service period.

Executive officers of the Company and its subsidiaries who have at least one year of service may participate in the Supplemental Plan. The Supplemental Plan is voluntary and participants are required to contribute to its cost. Life insurance policies, which are owned by the Company, are purchased covering the lives of each participant.

Components of Net Periodic Benefit Cost for the Three Months Ended September 30,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2017			2016			2017		2016
	(in thousands)
Service cost	$	310		$	318		$	395	$	455
Interest		362			340			345		334
Expected return on plan assets		(746	)		(694	)		—		—
Recognized prior service cost (benefit)		(26	)		(26	)		29		29
Recognized net actuarial losses		226			200			159		200
Net periodic benefit (credit) cost	$	126		$	138		$	928	$	1,018

Components of Net Periodic Benefit Cost for the Nine Months Ended September 30,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2017			2016			2017		2016
	(in thousands)
Service cost	$	930		$	954		$	1,184	$	1,366
Interest		1,087			1,020			1,035		1,002
Expected return on plan assets		(2,238	)		(2,082	)		—		—
Recognized prior service cost (benefit)		(78	)		(78	)		87		87
Recognized net actuarial losses		678			600			477		600
Net periodic benefit (credit) cost	$	379		$	414		$	2,783	$	3,055

Contributions

The Company intends to contribute $1,000,000 to the Pension Plan in 2017. As of September 30, 2017, $750,000 has been contributed.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8. Fair Value Measurements

The Company follows FASB ASC 820-10, Fair Value Measurements and Disclosures, which among other things, requires enhanced disclosures about assets and liabilities carried at fair value. ASC 820-10 establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring financial instruments at fair value. The three broad levels of the hierarchy are as follows:

Level I – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The type of financial instruments included in Level I are highly liquid cash instruments with quoted prices such as G-7 government, agency securities, listed equities and money market securities, as well as listed derivative instruments.

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Instruments which are generally included in this category are corporate bonds and loans, mortgage whole loans and municipal bonds.

Level III – Instruments that have little to no pricing observability as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. Instruments that are included in this category generally include certain commercial mortgage loans, certain private equity investments, and distressed debt and non-investment grade residual interests in securitizations.

The results of the fair value hierarchy as of September 30, 2017, are as follows:

Financial Instruments Measured at Fair Value on a Recurring Basis:

	Securities AFS Fair Value Measurements Using
	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(in thousands)
U.S. Treasury	$	1,994	$	—	$	1,994	$	—
U.S. Government Sponsored Enterprises		—		—		—		—
SBA Backed Securities		80,764		—		80,764		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		219,503		—		219,503		—
Privately Issued Residential Mortgage-Backed Securities		954		—		954		—
Obligations Issued by States and Political Subdivisions		79,245		—		—		79,245
Other Debt Securities		4,987		—		4,987		—
Equity Securities		343		343		—		—
Total	$	387,790	$	343	$	308,202	$	79,245
Financial Instruments Measured at Fair Value on a Non-recurring Basis:
Impaired Loans	$	134	$	—	$	—	$	134

Impaired loan balances represent those collateral dependent loans where management has estimated the credit loss by comparing the loan’s carrying value against the expected realizable fair value of the collateral. Fair value is generally determined through a review process that includes independent appraisals, discounted cash flows, or other external assessments of the underlying collateral, which generally include various Level 3 inputs which are not observable. The Company discounts the fair values, as appropriate, based on management’s observations of the local real estate market for loans in this category.

Appraisals, discounted cash flows and real estate tax assessments are reviewed quarterly. There is no specific policy regarding how frequently appraisals will be updated. Adjustments are made to appraisals and real estate tax assessments based on management’s estimate of changes in real estate values. Within the past twelve months there have been no updated appraisals, however, all impaired loans have been reviewed during the past quarter using either a discounted cash flow analysis, appraisal of collateral or other type of real estate tax assessment. The types of adjustments that are made to specific provisions (credits) relate to impaired loans recognized for the three and nine month periods ended September 30, 2017 amounted to $15,000 and $11,000, respectively.

There were no transfers between level 1, 2 and 3 for the nine months ended September 30, 2017. There were no liabilities measured at fair value on a recurring or nonrecurring basis during the nine month period ended September 30, 2017.

The following table presents additional information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands). Management continues to monitor the assumptions used to value the assets listed below.

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Securities AFS (4)	$	79,245	Discounted cash flow	Discount rate	0%-2% (3)
Impaired Loans	$	134	Appraisal of collateral (1)	Appraisal adjustments (2)	0%-30% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated expenses.

(3) Weighted averages.

(4) Municipal securities generally have maturities of one year or less and, therefore, the amortized cost equates to the fair value. There was one auction rate security whose fair value is based on the evaluation of the underlying issuer, prevailing interest rates and market liquidity.

The changes in Level 3 securities for the three month period ended September 30, 2017 are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Equity Securities		Total
	(in thousands)
Balance at December 31, 2016	$	4,298	$	160,578		$	—	$	164,876
Purchases		—		61,393			—		61,393
Maturities and calls		—		(146,869	)		—		(146,869	)
Amortization		—		(155	)		—		(155	)
Changes in fair value		—		—			—		—
Balance at September 30, 2017	$	4,298	$	74,947		$	—	$	79,245

The amortized cost of Level 3 securities was $79,655,000 at September 30, 2017 with an unrealized loss of $410,000. The securities in this category are generally municipal securities with no readily determinable fair value or failed auction rate securities. Management evaluated the fair value of these securities based on an evaluation of the underlying issuer, prevailing rates and market liquidity.

The changes in Level 3 securities for the six month period ended September 30, 2016, are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Equity Securities			Total
	(in thousands)
Balance at December 31, 2015	$	3,820	$	153,140		$	37		$	156,997
Purchases		—		181,752			—			181,752
Maturities and calls		—		(159,116	)		(37	)		(159,153	)
Amortization		—		(163	)		—			(163	)
Changes in fair value		478		—			—			478
Balance at September 30, 2016	$	4,298	$	175,613		$	—		$	179,911

The amortized cost of Level 3 securities was $180,315,000 at September 30, 2016 with an unrealized loss of $404,000. The securities in this category are generally equity investments, municipal securities with no readily determinable fair value or failed auction rate securities. Management evaluated the fair value of these securities based on an evaluation of the underlying issuer, prevailing rates and market liquidity.

The results of the fair value hierarchy as of December 31, 2016, are as follows:

Financial Instruments Measured at Fair Value on a Recurring Basis:

	Securities AFS Fair Value Measurements Using
	Carrying Value		Quoted Prices In Active Markets for Identitcal Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(in thousands)
U.S. Treasury	$	2,000	$	—	$	2,000	$	—
U.S. Government Sponsored Enterprises		24,952		—		24,952		—
SBA Backed Securities		57,767		—		57,767		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		243,325		—		243,325		—
Privately Issued Residential Mortgage-Backed Securities		1,109		—		1,109		—
Obligations Issued by States and Political Subdivisions		164,876		—		—		164,876
Other Debt Securities		4,924		—		4,924		—
Equity Securities		344		344		—		—
Total	$	499,297	$	344	$	334,077	$	164,876
Financial Instruments Measured at Fair Value on a Non-recurring Basis:
Impaired Loans	$	260	$	—	$	—	$	260

Impaired loan balances represent those collateral dependent loans where management has estimated the credit loss by comparing the loan’s carrying value against the expected realizable fair value of the collateral. Fair value is generally determined through a review process that includes independent appraisals, discounted cash flows, or other external assessments of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. The Company discounts the fair values, as appropriate, based on management’s observations of the local real estate market for loans in this category.

Appraisals, discounted cash flows and real estate tax assessments are reviewed quarterly. There is no specific policy regarding how frequently appraisals will be updated. Adjustments are made to appraisals and real estate tax assessments based on management’s estimate of changes in real estate values. Within the past twelve months there have been no updated appraisals, however, all impaired loans have been reviewed during the past quarter using either a discounted cash flow analysis, appraisal of collateral or other type of real estate tax assessment. The types of adjustments that are made to specific provisions (credits) relate to impaired loans recognized for 2016 for the estimated credit loss amounted to ($135,000).

There were no transfers between level 1, 2 and 3 for the year ended December 31, 2016. There were no liabilities measured at fair value on a recurring or nonrecurring basis during the year ended December 31, 2016.

The following table presents additional information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands). Management continues to monitor the assumptions used to value the assets listed below.

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Securities AFS (4)	$	164,876	Discounted cash flow	Discount rate	0%-1% (3)
Impaired Loans	$	260	Appraisal of collateral (1)	Appraisal adjustments (2)	0%-30% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated expenses.

(3) Weighted averages

(4) Municipal securities generally have maturities of one year or less and, therefore, the amortized cost equates to the fair value. There was one auction rate security whose fair value is based on the evaluation of the underlying issuer, prevailing interest rates and market liquidity.

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Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2017

Investments, All Other Investments [Abstract]

Fair Values of Financial Instruments

Note 9. Fair Values of Financial Instruments

The following methods and assumptions were used by the Company in estimating fair values of its financial instruments. Excluded from this disclosure are all nonfinancial instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The assumptions used below are expected to approximate those that market participants would use in valuing these financial instruments.

Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of timing, amount of expected future cash flows and the credit standing of the issuer. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In some cases, the fair value estimates cannot be substantiated by comparison to independent markets. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below.

Securities held-to-maturity: The fair values of these securities were based on quoted market prices, where available, as provided by third-party investment portfolio pricing vendors. If quoted market prices were not available, fair values provided by the vendors were based on quoted market prices of comparable instruments in active markets and/or based on a matrix pricing methodology which employs The Bond Market Association’s standard calculations for cash flow and price/yield analysis, live benchmark bond pricing and terms/condition data available from major pricing sources. Management regards the inputs and methods used by third party pricing vendors to be “Level 2 inputs and methods” as defined in the “fair value hierarchy” provided by FASB.

Loans Held-for-Sale: Fair value is measured using quoted market prices when available. These assets are typically categorized as Level 1. If quoted market prices are not available, comparable market values may be utilized. These assets are typically categorized as Level 2.

Loans: For variable-rate loans, that reprice frequently and with no significant change in credit risk, fair values are based on carrying amounts. The fair value of other loans is estimated using discounted cash flow analysis, based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Incremental credit risk for nonperforming loans has been considered.

Time deposits: The fair value of time deposits was estimated using a discounted cash flow approach that applies prevailing market interest rates for similar maturity instruments. The fair values of the Company’s time deposit liabilities do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

Other borrowed funds: The fair value of other borrowed funds is based on the discounted value of contractual cash flows. The discount rate used is estimated based on the rates currently offered for other borrowed funds of similar remaining maturities.

Subordinated debentures: The fair value of subordinated debentures is based on the discounted value of contractual cash flows. The discount rate used is estimated based on the rates currently offered for other subordinated debentures of similar remaining maturities.

The following presents (in thousands) the carrying amount, estimated fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2017 and December 31, 2016. This table excludes financial instruments for which the carrying amount approximates fair value. Financial assets for which the fair value approximates carrying value include cash and cash equivalents, short-term investments, FHLBB stock and accrued interest receivable. Financial liabilities for which the fair value approximates carrying value include non-maturity deposits, short-term borrowings and accrued interest payable.

September 30, 2017	Carrying Amount		Estimated Fair Value		Fair Value Measurements Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(in thousands)
Financial assets:
Securities held-to-maturity	$	1,654,908	$	1,637,497	$	—	$	1,637,497	$	—
Loans (1)		2,086,949		2,059,983		—		—		2,059,983
Financial liabilities:
Time deposits		607,279		606,256		—		606,256		—
Other borrowed funds		358,000		359,305		—		359,305		—
Subordinated debentures		36,083		36,083		—		—		36,083
December 31, 2016
Financial assets:
Securities held-to-maturity	$	1,653,986	$	1,635,808	$	—	$	1,635,808	$	—
Loans (1)		1,899,527		1,873,703		—		—		1,873,703
Financial liabilities:
Time deposits		478,359		480,133		—		480,133		—
Other borrowed funds		293,000		294,940		—		294,940		—
Subordinated debentures		36,083		36,083		—		—		36,083

(1) Comprised of loans (including collateral dependent impaired loans), net of deferred loan costs and the allowance for loan losses.

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Recent Accounting Developments

9 Months Ended

Sep. 30, 2017

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Developments

Note 10. Recent Accounting Developments

In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interest with a Scope Exception. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2018. Management is currently assessing the applicability of ASU 2017-11 and has not determined the impact of the adoption, if any, as of September 30, 2017.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. FASB issued this Update to address the diversity in practice as well as the cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017. Management is currently assessing ASU 2017-09. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In March 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt. The FASB is issuing this ASU to amend the amortization period for certain purchased callable debt securities held at a premium. The FASB is shortening the amortization period for the premium to the earliest call date. Under current generally accepted accounting principles (GAAP), entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently assessing the applicability of this ASU and has not determined the impact, if any, as of September 30, 2017.

In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this ASU require that an employer disaggregate the service cost component from the other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. Management is currently assessing this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In February 2017, the FASB issued ASU 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960) Defined Contribution Pension Plans (Topic 962) Health and Welfare Benefit Plans (Topic 965), Employee Benefit Plan Master Trust Reporting. The FASB has issued this ASU to improve the usefulness of the information reported to users of employee benefit plan financial statements and to provide clarity to preparers and auditors. This ASU relates primarily to the reporting by an employee benefit plan for its interest in a master trust. The amendments in this ASU clarify presentation requirements for a plan’s interest in a master trust and require more detailed disclosures of the plan’s interest in the master trust. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. Management is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In February 2017, the FASB issued ASU 2017-05, Other Income Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). This ASU was issued to clarify the scope of Subtopic 610-20, and to add guidance for partial sales of nonfinancial assets. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017 Management is currently assessing this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU was issued to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. For public entities, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted and application should be on a prospective basis. Management is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The intention of this ASU is to provide additional clarification on specific issues brought forth by the FASB and the International Accounting Standards Board Joint Transition Resource Group for Revenue Recognition in relation to Topic 606 and revenue recognition. This ASU is to have the same effective date as ASU 2015-14 which deferred the effective date of ASU 2014-09 to December 15, 2017. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. Since the issuance of Update 2014-09, the FASB has finalized various amendments to the standard that include corrections, improvements and timing modifications.

In July 2015, the FASB approved the deferral of the new standard’s effective date by one year. The new standard is effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016.

In 2017, we established a cross-functional implementation team consisting of representatives from across our business segments. We utilized a bottom-up approach to analyze the impact of the standard on our contract portfolio by reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our revenue contracts. In addition, we identified and implemented appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. The implementation team has reported the findings and progress of the project to management on a frequent basis over this past year.

We have been closely monitoring FASB activity related to the new standard. In the first nine months of 2017, we made significant progress toward completing our evaluation of the potential changes from adopting the new standard on our future financial reporting and disclosures. In the third quarter of 2017, we finalized our contract reviews. Based on our evaluation, we will use the modified retrospective transition method.

The Company is continuing to assess this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to put most leases on their balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting. This ASU also eliminates today’s real estate-specific provisions for all companies. For lessors, this ASU modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods therein. Early adoption is permitted. The Company is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

XML

Recent Accounting Developments (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Developments

Recent Accounting Developments

In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interest with a Scope Exception. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2018. Management is currently assessing the applicability of ASU 2017-11 and has not determined the impact of the adoption, if any, as of September 30, 2017.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. FASB issued this Update to address the diversity in practice as well as the cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017. Management is currently assessing ASU 2017-09. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In March 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt. The FASB is issuing this ASU to amend the amortization period for certain purchased callable debt securities held at a premium. The FASB is shortening the amortization period for the premium to the earliest call date. Under current generally accepted accounting principles (GAAP), entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently assessing the applicability of this ASU and has not determined the impact, if any, as of September 30, 2017.

In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this ASU require that an employer disaggregate the service cost component from the other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. Management is currently assessing this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In February 2017, the FASB issued ASU 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960) Defined Contribution Pension Plans (Topic 962) Health and Welfare Benefit Plans (Topic 965), Employee Benefit Plan Master Trust Reporting. The FASB has issued this ASU to improve the usefulness of the information reported to users of employee benefit plan financial statements and to provide clarity to preparers and auditors. This ASU relates primarily to the reporting by an employee benefit plan for its interest in a master trust. The amendments in this ASU clarify presentation requirements for a plan’s interest in a master trust and require more detailed disclosures of the plan’s interest in the master trust. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. Management is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In February 2017, the FASB issued ASU 2017-05, Other Income Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). This ASU was issued to clarify the scope of Subtopic 610-20, and to add guidance for partial sales of nonfinancial assets. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017 Management is currently assessing this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU was issued to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. For public entities, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted and application should be on a prospective basis. Management is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The intention of this ASU is to provide additional clarification on specific issues brought forth by the FASB and the International Accounting Standards Board Joint Transition Resource Group for Revenue Recognition in relation to Topic 606 and revenue recognition. This ASU is to have the same effective date as ASU 2015-14 which deferred the effective date of ASU 2014-09 to December 15, 2017. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. Since the issuance of Update 2014-09, the FASB has finalized various amendments to the standard that include corrections, improvements and timing modifications.

In July 2015, the FASB approved the deferral of the new standard’s effective date by one year. The new standard is effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016.

In 2017, we established a cross-functional implementation team consisting of representatives from across our business segments. We utilized a bottom-up approach to analyze the impact of the standard on our contract portfolio by reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our revenue contracts. In addition, we identified and implemented appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. The implementation team has reported the findings and progress of the project to management on a frequent basis over this past year.

We have been closely monitoring FASB activity related to the new standard. In the first nine months of 2017, we made significant progress toward completing our evaluation of the potential changes from adopting the new standard on our future financial reporting and disclosures. In the third quarter of 2017, we finalized our contract reviews. Based on our evaluation, we will use the modified retrospective transition method.

The Company is continuing to assess this ASU. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In February 2016, the FASB issued ASU 2016-02, Leases. This ASU requires lessees to put most leases on their balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting. This ASU also eliminates today’s real estate-specific provisions for all companies. For lessors, this ASU modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods therein. Early adoption is permitted. The Company is currently assessing this ASU and has not determined the impact, if any, as of September 30, 2017.

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Securities Available-for-Sale (Tables)

9 Months Ended

Sep. 30, 2017

Text Block [Abstract]

Summary of Securities Available-for-Sale

	September 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	$	—	$	5	$	1,994	$	2,000	$	—	$	—	$	2,000
U.S. Government Sponsored Enterprises		—		—		—		—		25,000		—		48		24,952
SBA Backed Securities		80,906		40		182		80,764		57,899		14		146		57,767
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		219,268		504		269		219,503		243,703		293		671		243,325
Privately Issued Residential Mortgage-Backed Securities		960		4		10		954		1,121		2		14		1,109
Obligations Issued by States and Political Subdivisions		79,655		—		410		79,245		165,281		—		405		164,876
Other Debt Securities		5,100		76		189		4,987		5,100		18		194		4,924
Equity Securities		116		227		—		343		116		228		—		344
Total	$	388,004	$	851	$	1,065	$	387,790	$	500,220	$	555	$	1,478	$	499,297

Maturity Distribution of Securities Available-for-Sale

The following table shows the maturity distribution of the Company’s securities available-for-sale at September 30, 2017.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	68,921	$	68,915
After one but within five years		126,680		126,824
After five but within ten years		96,671		96,759
More than 10 years		94,116		93,597
Non-maturing		1,616		1,695
Total	$	388,004	$	387,790

Continuous Unrealized Loss Position for Less than 12 Months and 12 Months or Longer

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at September 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 10 and 29 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 246 holdings at September 30, 2017.

	September 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	$	1,994	$	5	$	—	$	—	$	1,994	$	5
U.S. Government Sponsored Enterprises		—		—		—		—		—		—
SBA Backed Securities		10,561		28		44,789		154		55,350		182
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		30,914		77		59,918		192		90,832		269
Privately Issued Residential Mortgage-Backed Securities		—		—		671		10		671		10
Obligations Issued by States and Political Subdivisions		—		—		4,297		410		4,297		410
Other Debt Securities		399		1		1,812		188		2,211		189
Total temporarily impaired securities	$	43,868	$	111	$	111,487	$	954	$	155,355	$	1,065

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.

	December 31, 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. 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

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Investment Securities Held-to-Maturity (Tables)

9 Months Ended

Sep. 30, 2017

Text Block [Abstract]

Summary of Held-to-Maturity Securities

	September 30, 2017								December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in thousands)
U.S. Government Sponsored Enterprises	$	114,527	$	828	$	281	$	115,074	$	148,326	$	1,066	$	527	$	148,865
SBA Backed Securities		58,844		3		1,003		57,844		46,140		—		1,088		45,052
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities		1,481,537		4,970		21,928		1,464,579		1,459,520		4,948		22,577		1,441,891
Total	$	1,654,908	$	5,801	$	23,212	$	1,637,497	$	1,653,986	$	6,014	$	24,192	$	1,635,808

Company's Securities Held-to-Maturity

The following table shows the maturity distribution of the Company’s securities held-to-maturity at September 30, 2017.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	39,780	$	39,804
After one but within five years		1,219,826		1,208,388
After five but within ten years		392,012		386,114
More than ten years		3,290		3,191
Total	$	1,654,908	$	1,637,497

Unrealized Market Loss of Securities

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at

September 30, 2017. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months or longer. There are 129 and 88 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 392 holdings at September 30, 2017.

	September 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. Government Sponsored Enterprises	$	35,226	$	270	$	4,989	$	11	$	40,215	$	281
SBA Backed Securities		45,551		659		9,275		344		54,826		1,003
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		652,183		9,601		431,094		12,327		1,083,277		21,928
Total temporarily impaired securities	$	732,960	$	10,530	$	445,358	$	12,682	$	1,178,318	$	23,212

The following table shows the temporarily impaired securities of the Company’s held-to-maturity 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 194 and 16 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 375 holdings at December 31, 2016.

	December 31, 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. Government Sponsored Enterprises	$	59,219	$	527	$	—	$	—	$	59,219	$	527
SBA Backed Securities		45,052		1,088		—		—		45,052		1,088
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		1,008,960		20,725		58,535		1,852		1,067,495		22,577
Total temporarily impaired securities	$	1,113,231	$	22,340	$	58,535	$	1,852	$	1,171,766	$	24,192

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Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2017

Receivables [Abstract]

Summary of Changes in Allowance for Loan Losses

The following table summarizes the changes in the Company’s allowance for loan losses for the periods indicated.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
	(in thousands)
Allowance for loan losses, beginning of period	$	25,289		$	23,863		$	24,406		$	23,075
Loans charged off		(95	)		(118	)		(292	)		(298	)
Recoveries on loans previously charged-off		54			93			244			345
Net recoveries (charge-offs)		(41	)		(25	)		(48	)		47
Provision charged to expense		450			375			1,340			1,175
Reclassification to other liabilities *		—			(5	)		—			(89	)
Allowance for loan losses, end of period	$	25,698		$	24,208		$	25,698		$	24,208

* The reclassification relates to allowance for loan loss allocations on unused commitments that have been reclassified to other liabiliites.

Summary of Allowance for Loan Losses

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2017 follows:

	Construction and Land Development		Commercial and Industrial			Municipal		Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at June 30, 2017	$	1,137	$	7,563		$	1,859	$	11,028		$	2,118		$	195		$	1,146		$	243		$	25,289
Charge-offs		—		(20	)		—		—			—			(75	)		—			—			(95	)
Recoveries		—		9			—		—			—			45			—			—			54
Provision		323		1,297			265		(1,491	)		(45	)		220			(103	)		(16	)		450
Ending balance at September 30, 2017	$	1,460	$	8,849		$	2,124	$	9,537		$	2,073		$	385		$	1,043		$	227		$	25,698
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	8		$	—	$	111		$	67		$	—		$	—		$	—		$	186
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,460	$	8,841		$	2,124	$	9,426		$	2,006		$	385		$	1,043		$	227		$	25,512
Loans:
Ending balance	$	16,779	$	702,646		$	128,412	$	735,844		$	272,588		$	19,284		$	237,094		$	—		$	2,112,647
Loans deemed to be impaired	$	—	$	366		$	—	$	2,583		$	4,318		$	—		$	—		$	—		$	7,267
Loans not deemed to be impaired	$	16,779	$	702,280		$	128,412	$	733,261		$	268,270		$	19,284		$	237,094		$	—		$	2,105,380
Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2017 follows:
	Construction and Land Development		Commercial and Industrial			Municipal		Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at December 31, 2016	$	1,012	$	6,972		$	1,612	$	11,135		$	1,698		$	582		$	1,102		$	293		$	24,406
Charge-offs		—		(49	)		—		—			—			(243	)		—			—			(292	)
Recoveries		—		63			—		—			2			179			—			—			244
Provision		448		1,863			512		(1,598	)		373			(133	)		(59	)		(66	)		1,340
Ending balance at September 30, 2017	$	1,460	$	8,849		$	2,124	$	9,537		$	2,073		$	385		$	1,043		$	227		$	25,698
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	8		$	—	$	111		$	67		$	—		$	—		$	—		$	186
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,460	$	8,841		$	2,124	$	9,426		$	2,006		$	385		$	1,043		$	227		$	25,512
Loans:
Ending balance	$	16,779	$	702,646		$	128,412	$	735,844		$	272,588		$	19,284		$	237,094		$	—		$	2,112,647
Loans deemed to be impaired	$	—	$	366		$	—	$	2,583		$	4,318		$	—		$	—		$	—		$	7,267
Loans not deemed to be impaired	$	16,779	$	702,280		$	128,412	$	733,261		$	268,270		$	19,284		$	237,094		$	—		$	2,105,380

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2016 follows:

	Construction and Land Development			Commercial and Industrial			Municipal			Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at June 30, 2016	$	2,234		$	5,842		$	1,801		$	10,650		$	1,302		$	608		$	1,158		$	268		$	23,863
Charge-offs		—			—			—			—			—			(91	)		(27	)		—			(118	)
Recoveries		—			24			—			—			2			67			—			—			93
Provision		(3	)		307			(29	)		(752	)		624			5			155			68			375
Reclassification to other liabilities		—			—			—			—			—			—			(5	)		—			(5	)
Ending balance at September 30, 2016	$	2,231		$	6,173		$	1,772		$	9,898		$	1,928		$	589		$	1,281		$	336		$	24,208
Amount of allowance for loan losses for loans deemed to be impaired	$	4		$	9		$	—		$	143		$	7		$	—		$	—		$	—		$	163
Amount of allowance for loan losses for loans not deemed to be impaired	$	2,227		$	6,164		$	1,772		$	9,755		$	1,921		$	589		$	1,281		$	336		$	24,045
Loans:
Ending balance	$	19,522		$	549,290		$	145,063		$	692,778		$	222,881		$	11,474		$	200,085		$	—		$	1,841,093
Loans deemed to be impaired	$	95		$	399		$	—		$	3,707		$	208		$	—		$	—		$	—		$	4,409
Loans not deemed to be impaired	$	19,427		$	548,891		$	145,063		$	689,071		$	222,673		$	11,474		$	200,085		$	—		$	1,836,684
Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2016 follows:
	Construction and Land Development			Commercial and Industrial			Municipal			Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at December 31, 2015	$	2,041		$	5,899		$	994		$	10,589		$	1,320		$	644		$	1,077		$	511		$	23,075
Charge-offs		—			—			—			—			—			(271	)		(27	)		—			(298	)
Recoveries		—			115			—			—			5			225			—			—			345
Provision		193			188			778			(680	)		605			(6	)		272			(175	)		1,175
Reclassification to other liabilities		(3	)		(29	)		—			(11	)		(2	)		(3	)		(41	)		—			(89	)
Ending balance at September 30, 2016	$	2,231		$	6,173		$	1,772		$	9,898		$	1,928		$	589		$	1,281		$	336		$	24,208
Amount of allowance for loan losses for loans deemed to be impaired	$	4		$	9		$	—		$	143		$	7		$	—		$	—		$	—		$	163
Amount of allowance for loan losses for loans not deemed to be impaired	$	2,227		$	6,164		$	1,772		$	9,755		$	1,921		$	589		$	1,281		$	336		$	24,045
Loans:
Ending balance	$	19,522		$	549,290		$	145,063		$	692,778		$	222,881		$	11,474		$	200,085		$	—		$	1,841,093
Loans deemed to be impaired	$	95		$	399		$	—		$	3,707		$	208		$	—		$	—		$	—		$	4,409
Loans not deemed to be impaired	$	19,427		$	548,891		$	145,063		$	689,071		$	222,673		$	11,474		$	200,085		$	—		$	1,836,684

Loans by Risk Rating

The following table presents the Company’s loans by risk rating at September 30, 2017.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	16,779	$	696,934	$	128,412	$	708,558
4 (Monitor)		—		5,346		—		24,703
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		366		—		2,583
Total	$	16,779	$	702,646	$	128,412	$	735,844

The following table presents the Company’s loans by risk rating at December 31, 2016.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	14,834	$	612,114	$	135,418	$	661,271
4 (Monitor)		—		—		—		31,753
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		94		389		—		3,149
Total	$	14,928	$	612,503	$	135,418	$	696,173

Loans by Credit Ratings Issued by National Organizations

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at September 30, 2017 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	365,441	$	62,657	$	45,371	$	473,469
A1 – A3		247,253		7,770		128,743		383,766
Baa1 – Baa3		—		46,970		124,932		171,902
Ba2		—		8,165		—		8,165
Total	$	612,694	$	125,562	$	299,046	$	1,037,302

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2016.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	334,674	$	66,245	$	6,596	$	407,515
A1 – A3		188,777		33,365		129,423		351,565
Baa1 – Baa3		—		26,970		127,366		154,336
Ba2		—		3,610		—		3,610
Total	$	523,451	$	130,190	$	263,385	$	917,026

Aging of Past Due Loan Losses

Further information pertaining to the allowance for loan losses at September 30, 2017 follows:

	Accruing 30-89 Days Past Due		Non Accrual		Accruing Greater than 90 Days		Total Past Due		Current Loans		Total
	(in thousands)
Construction and land development	$	—	$	—	$	—	$	—	$	16,779	$	16,779
Commercial and industrial		159		55		—		214		702,432		702,646
Municipal		—		—		—		—		128,412		128,412
Commercial real estate		611		225		—		836		735,008		735,844
Residential real estate		237		670		—		907		271,681		272,588
Consumer and overdrafts		11		—		—		11		19,273		19,284
Home equity		1,032		648		—		1,680		235,414		237,094
Total	$	2,050	$	1,598	$	—	$	3,648	$	2,108,999	$	2,112,647

Further information pertaining to the allowance for loan losses at December 31, 2016 follows:

	Accruing 30-89 Days Past Due		Non Accrual		Accruing Greater than 90 Days		Total Past Due		Current Loans		Total
	(in thousands)
Construction and land development	$	—	$	94	$	—	$	94	$	14,834	$	14,928
Commercial and industrial		37		65		—		102		612,401		612,503
Municipal		—		—		—		—		135,418		135,418
Commercial real estate		597		150		—		747		695,426		696,173
Residential real estate		245		656		—		901		240,456		241,357
Consumer and overdrafts		—		11		—		11		11,686		11,697
Home equity		735		108		—		843		211,014		211,857
Total	$	1,614	$	1,084	$	—	$	2,698	$	1,921,235	$	1,923,933

Information Pertaining to Impaired Loans

The following is information pertaining to impaired loans for September 30, 2017:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/17		Interest Income Recognized for 3 Months Ending 9/30/17		Average Carrying Value for 9 Months Ending 9/30/17		Interest Income Recognized for 9 Months Ending 9/30/17
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		54		261		—		60		—		49		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		91		109		—		45		—		313		—
Residential real estate		72		163		—		75		2		81		5
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	217	$	533	$	—	$	180	$	2	$	443	$	5
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	56	$	—
Commercial and industrial		312		328		8		319		4		328		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,492		2,599		111		2,547		22		2,542		69
Residential real estate		4,246		4,247		67		4,257		19		1,767		36
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	7,050	$	7,174	$	186	$	7,123	$	45	$	4,693	$	117
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	56	$	—
Commercial and industrial		366		589		8		379		4		377		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,583		2,708		111		2,592		22		2,855		69
Residential real estate		4,318		4,410		67		4,332		21		1,848		41
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	7,267	$	7,707	$	186	$	7,303	$	47	$	5,136	$	122

The following is information pertaining to impaired loans for September 30, 2016:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/16		Interest Income Recognized for 3 Months Ending 9/30/16		Average Carrying Value for 9 Months Ending 9/30/16		Interest Income Recognized for 9 Months Ending 9/30/16
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		228		414		—		51		2		54		7
Municipal		—		—		—		—		—		—		—
Commercial real estate		593		593		—		594		9		310		30
Residential real estate		97		186		—		101		2		106		6
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	918	$	1,193	$	—	$	746	$	13	$	470	$	43
With required reserve recorded:
Construction and land development	$	95	$	108	$	4	$	96	$	—	$	97	$	—
Commercial and industrial		171		187		9		353		2		367		7
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,114		3,219		143		3,128		31		2,251		64
Residential real estate		111		110		7		111		1		387		4
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		36		—
Total	$	3,491	$	3,624	$	163	$	3,688	$	34	$	3,138	$	75
Total:
Construction and land development	$	95	$	108	$	4	$	96	$	—	$	97	$	—
Commercial and industrial		399		601		9		404		4		421		14
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,707		3,812		143		3,722		40		2,561		94
Residential real estate		208		296		7		212		3		493		10
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		36		—
Total	$	4,409	$	4,817	$	163	$	4,434	$	47	$	3,608	$	118

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Reclassifications Out of Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2017

Text Block [Abstract]

Reclassifications Out of Accumulated Other Comprehensive Income

Amount Reclassified from Accumulated Other Comprehensive Income

Details about Accumulated Other Comprehensive Income Components	Three Months Ended September 30, 2017			Three Months Ended September 30, 2016			Affected Line Item in the Statement where Net Income is Presented
(in thousands)
Unrealized gains and losses on available-for-sale securities	$	47		$	19		Net gains on sales of investments
		(19	)		(7	)	Provision for income taxes
	$	28		$	12		Net income
Accretion of unrealized losses transferred	$	(554	)	$	(809	)	Interest on securities held-to-maturity
		331			282		Provision for income taxes
	$	(223	)	$	(527	)	Net income
Amortization of defined benefit pension items
Prior-service costs	$	(3	)(b)	$	(3	)(b)	Salaries and employee benefits
Actuarial gains (losses)		(385	)(b)		(401	)(b)	Salaries and employee benefits
Total before tax		(388	)		(404	)	Income before taxes
		155			162		Provision for income taxes
	$	(233	)	$	(242	)	Net income
Details about Accumulated Other Comprehensive Income Components	Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016			Affected Line Item in the Statement where Net Income is Presented
(in thousands)
Unrealized gains and losses on available-for-sale securities	$	47		$	64		Net gains on sales of investments
		(19	)		(25	)	Provision for income taxes
	$	28		$	39		Net income
Accretion of unrealized losses transferred	$	(1,878	)	$	(3,490	)	Interest on securities held-to-maturity
		1,022			1,216		Provision for income taxes
	$	(856	)	$	(2,274	)	Net income
Amortization of defined benefit pension items
Prior-service costs	$	(8	)(b)	$	(8	)(b)	Salaries and employee benefits
Actuarial gains (losses)		(1,155	)(b)		(1,203	)(b)	Salaries and employee benefits
Total before tax		(1,163	)		(1,211	)	Income before taxes
		465			484		Provision for income taxes
	$	(698	)	$	(727	)	Net income

(a) Amount in parentheses indicates reductions to net income.

(b) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Employee Benefits footnote (Note 7) for additional details).

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Earnings per Share ("EPS") (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Reconciliation of Basic EPS and Diluted EPS

The following table is a reconciliation of basic EPS and diluted EPS.

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands except share and per share data)	2017		2016		2017		2016
Basic EPS Computation:
Numerator:
Net income, Class A	$	6,307	$	5,094	$	17,505	$	14,165
Net income, Class B		1,716		1,392		4,771		3,869
Denominator:
Weighted average shares outstanding, Class A		3,605,829		3,600,729		3,603,429		3,600,729
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Basic EPS, Class A	$	1.75	$	1.41	$	4.86	$	3.93
Basic EPS, Class B		0.87		0.71		2.43		1.97
Diluted EPS Computation:
Numerator:
Net income, Class A	$	6,307	$	5,094	$	17,505	$	14,165
Net income, Class B		1,716		1,392		4,771		3,869
Total net income, for diluted EPS, Class A computation		8,023		6,486		22,276		18,034
Denominator:
Weighted average shares outstanding, basic, Class A		3,605,829		3,600,729		3,603,429		3,600,729
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Weighted average shares outstanding diluted, Class A		5,567,909		5,567,909		5,567,909		5,567,909
Weighted average shares outstanding, Class B		1,962,080		1,967,180		1,964,480		1,967,180
Diluted EPS, Class A	$	1.44	$	1.16	$	4.00	$	3.24
Diluted EPS, Class B		0.87		0.71		2.43		1.97

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Employee Benefits (Tables)

9 Months Ended

Sep. 30, 2017

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost (Credit)

Components of Net Periodic Benefit Cost for the Three Months Ended September 30,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2017			2016			2017		2016
	(in thousands)
Service cost	$	310		$	318		$	395	$	455
Interest		362			340			345		334
Expected return on plan assets		(746	)		(694	)		—		—
Recognized prior service cost (benefit)		(26	)		(26	)		29		29
Recognized net actuarial losses		226			200			159		200
Net periodic benefit (credit) cost	$	126		$	138		$	928	$	1,018

Components of Net Periodic Benefit Cost for the Nine Months Ended September 30,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2017			2016			2017		2016
	(in thousands)
Service cost	$	930		$	954		$	1,184	$	1,366
Interest		1,087			1,020			1,035		1,002
Expected return on plan assets		(2,238	)		(2,082	)		—		—
Recognized prior service cost (benefit)		(78	)		(78	)		87		87
Recognized net actuarial losses		678			600			477		600
Net periodic benefit (credit) cost	$	379		$	414		$	2,783	$	3,055

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Financial Instruments Measured at Fair Value on a Recurring and Non-recurring Basis

The results of the fair value hierarchy as of September 30, 2017, are as follows:

Financial Instruments Measured at Fair Value on a Recurring Basis:

	Securities AFS Fair Value Measurements Using
	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(in thousands)
U.S. Treasury	$	1,994	$	—	$	1,994	$	—
U.S. Government Sponsored Enterprises		—		—		—		—
SBA Backed Securities		80,764		—		80,764		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		219,503		—		219,503		—
Privately Issued Residential Mortgage-Backed Securities		954		—		954		—
Obligations Issued by States and Political Subdivisions		79,245		—		—		79,245
Other Debt Securities		4,987		—		4,987		—
Equity Securities		343		343		—		—
Total	$	387,790	$	343	$	308,202	$	79,245
Financial Instruments Measured at Fair Value on a Non-recurring Basis:
Impaired Loans	$	134	$	—	$	—	$	134

The results of the fair value hierarchy as of December 31, 2016, are as follows:

Financial Instruments Measured at Fair Value on a Recurring Basis:

	Securities AFS Fair Value Measurements Using
	Carrying Value		Quoted Prices In Active Markets for Identitcal Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(in thousands)
U.S. Treasury	$	2,000	$	—	$	2,000	$	—
U.S. Government Sponsored Enterprises		24,952		—		24,952		—
SBA Backed Securities		57,767		—		57,767		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		243,325		—		243,325		—
Privately Issued Residential Mortgage-Backed Securities		1,109		—		1,109		—
Obligations Issued by States and Political Subdivisions		164,876		—		—		164,876
Other Debt Securities		4,924		—		4,924		—
Equity Securities		344		344		—		—
Total	$	499,297	$	344	$	334,077	$	164,876
Financial Instruments Measured at Fair Value on a Non-recurring Basis:
Impaired Loans	$	260	$	—	$	—	$	260

Assets Measured at Fair Value

The following table presents additional information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands). Management continues to monitor the assumptions used to value the assets listed below.

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Securities AFS (4)	$	79,245	Discounted cash flow	Discount rate	0%-2% (3)
Impaired Loans	$	134	Appraisal of collateral (1)	Appraisal adjustments (2)	0%-30% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated expenses.

(3) Weighted averages.

(4) Municipal securities generally have maturities of one year or less and, therefore, the amortized cost equates to the fair value. There was one auction rate security whose fair value is based on the evaluation of the underlying issuer, prevailing interest rates and market liquidity.

The following table presents additional information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands). Management continues to monitor the assumptions used to value the assets listed below.

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Securities AFS (4)	$	164,876	Discounted cash flow	Discount rate	0%-1% (3)
Impaired Loans	$	260	Appraisal of collateral (1)	Appraisal adjustments (2)	0%-30% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated expenses.

(3) Weighted averages

(4) Municipal securities generally have maturities of one year or less and, therefore, the amortized cost equates to the fair value. There was one auction rate security whose fair value is based on the evaluation of the underlying issuer, prevailing interest rates and market liquidity.

Changes in Level 3 Securities

The changes in Level 3 securities for the three month period ended September 30, 2017 are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Equity Securities		Total
	(in thousands)
Balance at December 31, 2016	$	4,298	$	160,578		$	—	$	164,876
Purchases		—		61,393			—		61,393
Maturities and calls		—		(146,869	)		—		(146,869	)
Amortization		—		(155	)		—		(155	)
Changes in fair value		—		—			—		—
Balance at September 30, 2017	$	4,298	$	74,947		$	—	$	79,245

The changes in Level 3 securities for the six month period ended September 30, 2016, are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Equity Securities			Total
	(in thousands)
Balance at December 31, 2015	$	3,820	$	153,140		$	37		$	156,997
Purchases		—		181,752			—			181,752
Maturities and calls		—		(159,116	)		(37	)		(159,153	)
Amortization		—		(163	)		—			(163	)
Changes in fair value		478		—			—			478
Balance at September 30, 2016	$	4,298	$	175,613		$	—		$	179,911

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Fair Values of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Investments, All Other Investments [Abstract]

Carrying Amounts and Fair Values of Company's Financial Instruments

The following presents (in thousands) the carrying amount, estimated fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2017 and December 31, 2016. This table excludes financial instruments for which the carrying amount approximates fair value. Financial assets for which the fair value approximates carrying value include cash and cash equivalents, short-term investments, FHLBB stock and accrued interest receivable. Financial liabilities for which the fair value approximates carrying value include non-maturity deposits, short-term borrowings and accrued interest payable.

September 30, 2017	Carrying Amount		Estimated Fair Value		Fair Value Measurements Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(in thousands)
Financial assets:
Securities held-to-maturity	$	1,654,908	$	1,637,497	$	—	$	1,637,497	$	—
Loans (1)		2,086,949		2,059,983		—		—		2,059,983
Financial liabilities:
Time deposits		607,279		606,256		—		606,256		—
Other borrowed funds		358,000		359,305		—		359,305		—
Subordinated debentures		36,083		36,083		—		—		36,083
December 31, 2016
Financial assets:
Securities held-to-maturity	$	1,653,986	$	1,635,808	$	—	$	1,635,808	$	—
Loans (1)		1,899,527		1,873,703		—		—		1,873,703
Financial liabilities:
Time deposits		478,359		480,133		—		480,133		—
Other borrowed funds		293,000		294,940		—		294,940		—
Subordinated debentures		36,083		36,083		—		—		36,083

(1) Comprised of loans (including collateral dependent impaired loans), net of deferred loan costs and the allowance for loan losses.

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Basis of Financial Statement Presentation - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2017 Segment
Basis Of Presentation [Line Items]
Number of reportable segments	1
Century Bancorp Capital Trust II [Member]
Basis Of Presentation [Line Items]
Equity ownership interest	100.00%

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Securities Available-for-Sale - Summary of Securities Available-for-Sale (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 388,004	$ 500,220
Gross Unrealized Gains	851	555
Gross Unrealized Losses	1,065	1,478
Total, Fair Value	387,790	499,297
U.S. Treasury [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,999	2,000
Gross Unrealized Losses	5
Total, Fair Value	1,994	2,000
U.S. Government Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		25,000
Gross Unrealized Losses		48
Total, Fair Value		24,952
SBA Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	80,906	57,899
Gross Unrealized Gains	40	14
Gross Unrealized Losses	182	146
Total, Fair Value	80,764	57,767
U.S. Government Agency and Sponsored Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	219,268	243,703
Gross Unrealized Gains	504	293
Gross Unrealized Losses	269	671
Total, Fair Value	219,503	243,325
Privately Issued Residential Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	960	1,121
Gross Unrealized Gains	4	2
Gross Unrealized Losses	10	14
Total, Fair Value	954	1,109
Obligations Issued by States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	79,655	165,281
Gross Unrealized Losses	410	405
Total, Fair Value	79,245	164,876
Other Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	5,100	5,100
Gross Unrealized Gains	76	18
Gross Unrealized Losses	189	194
Total, Fair Value	4,987	4,924
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	116	116
Gross Unrealized Gains	227	228
Total, Fair Value	$ 343	$ 344

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Securities Available-for-Sale - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($) Security	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) Security	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) Security
Schedule of Available-for-sale Securities [Line Items]
Securities at fair value pledged to secure public deposits and repurchase agreements	$ 1,221,518,000		$ 1,221,518,000		$ 1,147,207,000
Securities available-for-sale are securities at fair value pledged for borrowing	49,248,000		49,248,000		$ 53,396,000
Gross gains on sales of securities	$ 47,000	$ 19,000	47,000	$ 64,000
Proceeds from sales of securities available-for-sale			18,133,000	2,376,000
Federal Home Loan Bank [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross gains on sales of securities			$ 47,000	$ 52,000
Securities AFS [Member]
Schedule of Available-for-sale Securities [Line Items]
Weighted average remaining life of investment securities available-for-sale			5 years 9 months 18 days
Number of securities, temporarily impaired for less than 12 months | Security	10		10		49
Number of securities, temporarily impaired for 12 months or longer | Security	29		29		15
Number of securities, temporarily impaired, total | Security	246		246		270
U.S. Government Agency and Sponsored Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities at fair value pledged to secure public deposits and repurchase agreements	$ 165,178,000		$ 165,178,000		$ 210,780,000

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Securities Available-for-Sale - Maturity Distribution of Securities Available-for-Sale (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Within one year, Amortized Cost	$ 68,921
After one but within five years, Amortized Cost	126,680
After five but within ten years, Amortized Cost	96,671
More than 10 years, Amortized Cost	94,116
Non-maturing, Amortized Cost	1,616
Amortized Cost	388,004	$ 500,220
Within one year, Fair Value	68,915
After one but within five years, Fair Value	126,824
After five but within ten years, Fair Value	96,759
More than 10 years, Fair Value	93,597
Non-maturing, Fair Value	1,695
Total, Fair Value	$ 387,790	$ 499,297

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Securities Available-for-Sale - Continuous Unrealized Loss Position for 12 Months or Less and 12 Months or Longer (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	$ 43,868	$ 213,363
Less Than 12 Months, Unrealized Losses	111	725
12 Months or Longer, Fair Value	111,487	39,063
12 Months or Longer, Unrealized Losses	954	753
Total, Fair Value	155,355	252,426
Total, Unrealized Losses	1,065	1,478
U.S. Treasury [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	1,994
Less Than 12 Months, Unrealized Losses	5
Total, Fair Value	1,994
Total, Unrealized Losses	5
U.S. Government Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value		24,952
Less Than 12 Months, Unrealized Losses		48
Total, Fair Value		24,952
Total, Unrealized Losses		48
SBA Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	10,561	52,346
Less Than 12 Months, Unrealized Losses	28	145
12 Months or Longer, Fair Value	44,789	951
12 Months or Longer, Unrealized Losses	154	1
Total, Fair Value	55,350	53,297
Total, Unrealized Losses	182	146
U.S. Government Agency and Sponsored Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	30,914	135,612
Less Than 12 Months, Unrealized Losses	77	485
12 Months or Longer, Fair Value	59,918	31,504
12 Months or Longer, Unrealized Losses	192	186
Total, Fair Value	90,832	167,116
Total, Unrealized Losses	269	671
Privately Issued Residential Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or Longer, Fair Value	671	757
12 Months or Longer, Unrealized Losses	10	14
Total, Fair Value	671	757
Total, Unrealized Losses	10	14
Obligations Issued by States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or Longer, Fair Value	4,297	4,298
12 Months or Longer, Unrealized Losses	410	405
Total, Fair Value	4,297	4,298
Total, Unrealized Losses	410	405
Other Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	399	453
Less Than 12 Months, Unrealized Losses	1	47
12 Months or Longer, Fair Value	1,812	1,553
12 Months or Longer, Unrealized Losses	188	147
Total, Fair Value	2,211	2,006
Total, Unrealized Losses	$ 189	$ 194

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Investment Securities Held-to-Maturity - Summary of Held-to-Maturity Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 1,654,908	$ 1,653,986
Gross Unrealized Gains	5,801	6,014
Gross Unrealized Losses	23,212	24,192
Estimated Fair Value	1,637,497	1,635,808
U.S. Government Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	114,527	148,326
Gross Unrealized Gains	828	1,066
Gross Unrealized Losses	281	527
Estimated Fair Value	115,074	148,865
SBA Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	58,844	46,140
Gross Unrealized Gains	3
Gross Unrealized Losses	1,003	1,088
Estimated Fair Value	57,844	45,052
U.S. Government Agency and Sponsored Mortgage-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	1,481,537	1,459,520
Gross Unrealized Gains	4,970	4,948
Gross Unrealized Losses	21,928	22,577
Estimated Fair Value	$ 1,464,579	$ 1,441,891

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Investment Securities Held-to-Maturity - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2017 USD ($) Security	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) Security
Schedule of Held-to-maturity Securities [Line Items]
Securities at fair value pledged to secure public deposits and repurchase agreements	$ 1,221,518,000		$ 1,147,207,000
Proceeds from sales of securities held-to-maturity	$ 0	$ 192,000
Realized gross gains from sales of securities held-to-maturity		$ 12,000
Held-to-Maturity Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Weighted average remaining life of investment securities held-to-maturity	4 years 2 months 12 days
Number of securities, temporarily impaired for less than 12 months | Security	129		194
Number of securities, temporarily impaired for 12 months or longer | Security	88		16
Number of securities, temporarily impaired, total | Security	392		375
Held-to-Maturity Securities [Member] | U.S. Government Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Weighted average remaining life	$ 20,496,000
Federal Home Loan Bank [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities pledged for borrowing at the Federal Home Loan Bank	$ 291,330,000		$ 424,353,000

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Investment Securities Held-to-Maturity - Company's Securities Held-to-Maturity (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Within one year, Amortized Cost	$ 39,780
After one but within five years, Amortized Cost	1,219,826
After five but within ten years, Amortized Cost	392,012
More than ten years, Amortized Cost	3,290
Amortized Cost	1,654,908	$ 1,653,986
Within one year, Fair Value	39,804
After one but within five years, Fair Value	1,208,388
After five but within ten years, Fair Value	386,114
More than ten years, Fair Value	3,191
Estimated Fair Value	$ 1,637,497	$ 1,635,808

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Investment Securities Held-to-Maturity - Unrealized Market Loss of Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
Less Than 12 Months, Fair Value	$ 732,960	$ 1,113,231
Less Than 12 Months, Unrealized Losses	10,530	22,340
12 Months or Longer, Fair Value	445,358	58,535
12 Months or Longer, Unrealized Losses	12,682	1,852
Total, Fair Value	1,178,318	1,171,766
Total, Unrealized Losses	23,212	24,192
U.S. Government Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Less Than 12 Months, Fair Value	35,226	59,219
Less Than 12 Months, Unrealized Losses	270	527
12 Months or Longer, Fair Value	4,989
12 Months or Longer, Unrealized Losses	11
Total, Fair Value	40,215	59,219
Total, Unrealized Losses	281	527
SBA Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Less Than 12 Months, Fair Value	45,551	45,052
Less Than 12 Months, Unrealized Losses	659	1,088
12 Months or Longer, Fair Value	9,275
12 Months or Longer, Unrealized Losses	344
Total, Fair Value	54,826	45,052
Total, Unrealized Losses	1,003	1,088
U.S. Government Agency and Sponsored Mortgage-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Less Than 12 Months, Fair Value	652,183	1,008,960
Less Than 12 Months, Unrealized Losses	9,601	20,725
12 Months or Longer, Fair Value	431,094	58,535
12 Months or Longer, Unrealized Losses	12,327	1,852
Total, Fair Value	1,083,277	1,067,495
Total, Unrealized Losses	$ 21,928	$ 22,577

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Allowance for Loan Losses - Analysis of Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Receivables [Abstract]
Allowance for loan losses, beginning of period	$ 25,289	$ 23,863	$ 24,406	$ 23,075
Loans charged off	(95)	(118)	(292)	(298)
Recoveries on loans previously charged-off	54	93	244	345
Net recoveries (charge-offs)	(41)	(25)	(48)	47
Provision charged to expense	450	375	1,340	1,175
Reclassification to other liabilities		(5)		(89)
Allowance for loan losses, end of period	$ 25,698	$ 24,208	$ 25,698	$ 24,208

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Allowance for Loan Losses - Summary of Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Allowance for loan losses:
Allowance for loan losses, beginning of period	$ 25,289	$ 23,863	$ 24,406	$ 23,075
Charge-offs	(95)	(118)	(292)	(298)
Recoveries	54	93	244	345
Provision	450	375	1,340	1,175
Reclassification to other liabilities		(5)		(89)
Allowance for loan losses, end of period	25,698	24,208	25,698	24,208
Amount of allowance for loan losses for loans deemed to be impaired	186	163	186	163
Amount of allowance for loan losses for loans not deemed to be impaired	25,512	24,045	25,512	24,045
Loans:
Total loans, net	2,112,647	1,841,093	2,112,647	1,841,093	$ 1,923,933
Loans deemed to be impaired	7,267	4,409	7,267	4,409
Loans not deemed to be impaired	2,105,380	1,836,684	2,105,380	1,836,684
Construction and Land Development [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	1,137	2,234	1,012	2,041
Provision	323	(3)	448	193
Reclassification to other liabilities				(3)
Allowance for loan losses, end of period	1,460	2,231	1,460	2,231
Amount of allowance for loan losses for loans deemed to be impaired		4		4
Amount of allowance for loan losses for loans not deemed to be impaired	1,460	2,227	1,460	2,227
Loans:
Total loans, net	16,779	19,522	16,779	19,522	14,928
Loans deemed to be impaired		95		95
Loans not deemed to be impaired	16,779	19,427	16,779	19,427
Commercial and Industrial [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	7,563	5,842	6,972	5,899
Charge-offs	(20)		(49)
Recoveries	9	24	63	115
Provision	1,297	307	1,863	188
Reclassification to other liabilities				(29)
Allowance for loan losses, end of period	8,849	6,173	8,849	6,173
Amount of allowance for loan losses for loans deemed to be impaired	8	9	8	9
Amount of allowance for loan losses for loans not deemed to be impaired	8,841	6,164	8,841	6,164
Loans:
Total loans, net	702,646	549,290	702,646	549,290	612,503
Loans deemed to be impaired	366	399	366	399
Loans not deemed to be impaired	702,280	548,891	702,280	548,891
Municipal [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	1,859	1,801	1,612	994
Provision	265	(29)	512	778
Allowance for loan losses, end of period	2,124	1,772	2,124	1,772
Amount of allowance for loan losses for loans not deemed to be impaired	2,124	1,772	2,124	1,772
Loans:
Total loans, net	128,412	145,063	128,412	145,063	135,418
Loans not deemed to be impaired	128,412	145,063	128,412	145,063
Commercial Real Estate [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	11,028	10,650	11,135	10,589
Provision	(1,491)	(752)	(1,598)	(680)
Reclassification to other liabilities				(11)
Allowance for loan losses, end of period	9,537	9,898	9,537	9,898
Amount of allowance for loan losses for loans deemed to be impaired	111	143	111	143
Amount of allowance for loan losses for loans not deemed to be impaired	9,426	9,755	9,426	9,755
Loans:
Total loans, net	735,844	692,778	735,844	692,778	696,173
Loans deemed to be impaired	2,583	3,707	2,583	3,707
Loans not deemed to be impaired	733,261	689,071	733,261	689,071
Residential Real Estate [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	2,118	1,302	1,698	1,320
Recoveries		2	2	5
Provision	(45)	624	373	605
Reclassification to other liabilities				(2)
Allowance for loan losses, end of period	2,073	1,928	2,073	1,928
Amount of allowance for loan losses for loans deemed to be impaired	67	7	67	7
Amount of allowance for loan losses for loans not deemed to be impaired	2,006	1,921	2,006	1,921
Loans:
Total loans, net	272,588	222,881	272,588	222,881	241,357
Loans deemed to be impaired	4,318	208	4,318	208
Loans not deemed to be impaired	268,270	222,673	268,270	222,673
Consumer [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	195	608	582	644
Charge-offs	(75)	(91)	(243)	(271)
Recoveries	45	67	179	225
Provision	220	5	(133)	(6)
Reclassification to other liabilities				(3)
Allowance for loan losses, end of period	385	589	385	589
Amount of allowance for loan losses for loans not deemed to be impaired	385	589	385	589
Loans:
Total loans, net	19,284	11,474	19,284	11,474	11,697
Loans not deemed to be impaired	19,284	11,474	19,284	11,474
Home Equity [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	1,146	1,158	1,102	1,077
Charge-offs		(27)		(27)
Provision	(103)	155	(59)	272
Reclassification to other liabilities		(5)		(41)
Allowance for loan losses, end of period	1,043	1,281	1,043	1,281
Amount of allowance for loan losses for loans not deemed to be impaired	1,043	1,281	1,043	1,281
Loans:
Total loans, net	237,094	200,085	237,094	200,085	$ 211,857
Loans not deemed to be impaired	237,094	200,085	237,094	200,085
Unallocated [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	243	268	293	511
Provision	(16)	68	(66)	(175)
Allowance for loan losses, end of period	227	336	227	336
Amount of allowance for loan losses for loans not deemed to be impaired	$ 227	$ 336	$ 227	$ 336

XML

Allowance for Loan Losses - Loans by Risk Rating (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Loans by risk rating
Financing Receivable, Net	$ 2,112,647	$ 1,923,933	$ 1,841,093
Construction and Land Development [Member]
Loans by risk rating
Financing Receivable, Net	16,779	14,928	19,522
Commercial and Industrial [Member]
Loans by risk rating
Financing Receivable, Net	702,646	612,503	549,290
Municipal [Member]
Loans by risk rating
Financing Receivable, Net	128,412	135,418	145,063
Commercial Real Estate [Member]
Loans by risk rating
Financing Receivable, Net	735,844	696,173	$ 692,778
1-3 (Pass) [Member] | Construction and Land Development [Member]
Loans by risk rating
Financing Receivable, Net	16,779	14,834
1-3 (Pass) [Member] | Commercial and Industrial [Member]
Loans by risk rating
Financing Receivable, Net	696,934	612,114
1-3 (Pass) [Member] | Municipal [Member]
Loans by risk rating
Financing Receivable, Net	128,412	135,418
1-3 (Pass) [Member] | Commercial Real Estate [Member]
Loans by risk rating
Financing Receivable, Net	708,558	661,271
4 (Monitor) [Member] | Commercial and Industrial [Member]
Loans by risk rating
Financing Receivable, Net	5,346
4 (Monitor) [Member] | Commercial Real Estate [Member]
Loans by risk rating
Financing Receivable, Net	24,703	31,753
Impaired [Member] | Construction and Land Development [Member]
Loans by risk rating
Financing Receivable, Net		94
Impaired [Member] | Commercial and Industrial [Member]
Loans by risk rating
Financing Receivable, Net	366	389
Impaired [Member] | Commercial Real Estate [Member]
Loans by risk rating
Financing Receivable, Net	$ 2,583	$ 3,149

XML

Allowance for Loan Losses - Loans by Credit Rating (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	$ 1,037,302	$ 917,026
Aaa - Aa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	473,469	407,515
A1 - A3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	383,766	351,565
Baa1 - Baa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	171,902	154,336
Ba2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	8,165	3,610
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	612,694	523,451
Commercial and Industrial [Member] | Aaa - Aa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	365,441	334,674
Commercial and Industrial [Member] | A1 - A3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	247,253	188,777
Municipal [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	125,562	130,190
Municipal [Member] | Aaa - Aa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	62,657	66,245
Municipal [Member] | A1 - A3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	7,770	33,365
Municipal [Member] | Baa1 - Baa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	46,970	26,970
Municipal [Member] | Ba2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	8,165	3,610
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	299,046	263,385
Commercial Real Estate [Member] | Aaa - Aa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	45,371	6,596
Commercial Real Estate [Member] | A1 - A3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	128,743	129,423
Commercial Real Estate [Member] | Baa1 - Baa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	$ 124,932	$ 127,366

XML

Allowance for Loan Losses - Aging of Past Due Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	$ 2,050	$ 1,614
Non Accrual	1,598	1,084
Accruing Greater than 90 Days	0	0
Total Past Due	3,648	2,698
Current Loans	2,108,999	1,921,235
Total loans, net	2,112,647	1,923,933	$ 1,841,093
Construction and Land Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Non Accrual		94
Accruing Greater than 90 Days	0	0
Total Past Due		94
Current Loans	16,779	14,834
Total loans, net	16,779	14,928	19,522
Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	159	37
Non Accrual	55	65
Accruing Greater than 90 Days	0	0
Total Past Due	214	102
Current Loans	702,432	612,401
Total loans, net	702,646	612,503	549,290
Municipal [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing Greater than 90 Days	0	0
Current Loans	128,412	135,418
Total loans, net	128,412	135,418	145,063
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	611	597
Non Accrual	225	150
Accruing Greater than 90 Days	0	0
Total Past Due	836	747
Current Loans	735,008	695,426
Total loans, net	735,844	696,173	692,778
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	237	245
Non Accrual	670	656
Accruing Greater than 90 Days	0	0
Total Past Due	907	901
Current Loans	271,681	240,456
Total loans, net	272,588	241,357	222,881
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	11
Non Accrual		11
Accruing Greater than 90 Days	0	0
Total Past Due	11	11
Current Loans	19,273	11,686
Total loans, net	19,284	11,697	11,474
Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	1,032	735
Non Accrual	648	108
Accruing Greater than 90 Days	0	0
Total Past Due	1,680	843
Current Loans	235,414	211,014
Total loans, net	$ 237,094	$ 211,857	$ 200,085

XML

Allowance for Loan Losses - Information Pertaining to Impaired Loans (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Carrying Value	$ 217	$ 918	$ 217	$ 918
With no required reserve recorded, Unpaid Balance Principal	533	1,193	533	1,193
With no required reserve recorded, Required Reserve	0	0	0	0
With no required reserve recorded, Average Carrying Value Recognized	180	746	443	470
With no required reserve recorded, Interest Income	2	13	5	43
With required reserve recorded, Carrying Value	7,050	3,491	7,050	3,491
With required reserve recorded, Unpaid Balance Principal	7,174	3,624	7,174	3,624
With required reserve recorded, Required Reserve	186	163	186	163
With required reserve recorded, Average Carrying Value Recognized	7,123	3,688	4,693	3,138
With required reserve recorded, Interest Income	45	34	117	75
Carrying Value	7,267	4,409	7,267	4,409
Unpaid Balance Principal	7,707	4,817	7,707	4,817
With required reserve recorded, Required Reserve	186	163	186	163
Average Carrying Value Recognized	7,303	4,434	5,136	3,608
Interest Income	47	47	122	118
Construction and Land Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Required Reserve	0	0	0	0
With required reserve recorded, Carrying Value		95		95
With required reserve recorded, Unpaid Balance Principal		108		108
With required reserve recorded, Required Reserve		4		4
With required reserve recorded, Average Carrying Value Recognized		96	56	97
Carrying Value		95		95
Unpaid Balance Principal		108		108
With required reserve recorded, Required Reserve		4		4
Average Carrying Value Recognized		96	56	97
Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Carrying Value	54	228	54	228
With no required reserve recorded, Unpaid Balance Principal	261	414	261	414
With no required reserve recorded, Required Reserve	0	0	0	0
With no required reserve recorded, Average Carrying Value Recognized	60	51	49	54
With no required reserve recorded, Interest Income		2		7
With required reserve recorded, Carrying Value	312	171	312	171
With required reserve recorded, Unpaid Balance Principal	328	187	328	187
With required reserve recorded, Required Reserve	8	9	8	9
With required reserve recorded, Average Carrying Value Recognized	319	353	328	367
With required reserve recorded, Interest Income	4	2	12	7
Carrying Value	366	399	366	399
Unpaid Balance Principal	589	601	589	601
With required reserve recorded, Required Reserve	8	9	8	9
Average Carrying Value Recognized	379	404	377	421
Interest Income	4	4	12	14
Municipal [Member] | Municipal [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Required Reserve	0	0	0	0
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Carrying Value	91	593	91	593
With no required reserve recorded, Unpaid Balance Principal	109	593	109	593
With no required reserve recorded, Required Reserve	0	0	0	0
With no required reserve recorded, Average Carrying Value Recognized	45	594	313	310
With no required reserve recorded, Interest Income		9		30
With required reserve recorded, Carrying Value	2,492	3,114	2,492	3,114
With required reserve recorded, Unpaid Balance Principal	2,599	3,219	2,599	3,219
With required reserve recorded, Required Reserve	111	143	111	143
With required reserve recorded, Average Carrying Value Recognized	2,547	3,128	2,542	2,251
With required reserve recorded, Interest Income	22	31	69	64
Carrying Value	2,583	3,707	2,583	3,707
Unpaid Balance Principal	2,708	3,812	2,708	3,812
With required reserve recorded, Required Reserve	111	143	111	143
Average Carrying Value Recognized	2,592	3,722	2,855	2,561
Interest Income	22	40	69	94
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Carrying Value	72	97	72	97
With no required reserve recorded, Unpaid Balance Principal	163	186	163	186
With no required reserve recorded, Required Reserve	0	0	0	0
With no required reserve recorded, Average Carrying Value Recognized	75	101	81	106
With no required reserve recorded, Interest Income	2	2	5	6
With required reserve recorded, Carrying Value	4,246	111	4,246	111
With required reserve recorded, Unpaid Balance Principal	4,247	110	4,247	110
With required reserve recorded, Required Reserve	67	7	67	7
With required reserve recorded, Average Carrying Value Recognized	4,257	111	1,767	387
With required reserve recorded, Interest Income	19	1	36	4
Carrying Value	4,318	208	4,318	208
Unpaid Balance Principal	4,410	296	4,410	296
With required reserve recorded, Required Reserve	67	7	67	7
Average Carrying Value Recognized	4,332	212	1,848	493
Interest Income	21	3	41	10
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Required Reserve	0	0	0	0
Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Required Reserve	$ 0	$ 0	$ 0	0
With required reserve recorded, Average Carrying Value Recognized				36
Average Carrying Value Recognized				$ 36

XML

Allowances for Loan Losses - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) Contracts	Sep. 30, 2016 USD ($)
Financing Receivable, Allowance for Credit Losses [Line Items]
Troubled debt restructurings, subsequently defaulted		$ 0		$ 0
Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of troubled debt restructurings | Contracts			1
Pre-modification outstanding recorded investment			$ 2,091,000
Post-modification outstanding recorded investment			2,091,000
Financing allowance reduction in principal payments	$ 7,000		10,000
Financing allowance reduction in interest payments	$ 2,000		$ 2,000

XML

Reclassifications Out of Accumulated Other Comprehensive Income - Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net gains on sales of securities	$ 47	$ 19	$ 47	$ 64
Provision for income taxes	(617)	52	(1,313)	(32)
Net income	8,023	6,486	22,276	18,034
Salaries and employee benefits	(10,282)	(10,544)	(32,144)	(30,360)
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net gains on sales of securities	47	19	47	64
Provision for income taxes	(19)	(7)	(19)	(25)
Net income	28	12	28	39
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Accretion of Unrealized Losses Transferred [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net gains on sales of securities	(554)	(809)	(1,878)	(3,490)
Provision for income taxes	331	282	1,022	1,216
Net income	(223)	(527)	(856)	(2,274)
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Prior-Service Costs [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	(3)	(3)	(8)	(8)
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Actuarial Gains (Losses) [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	(385)	(401)	(1,155)	(1,203)
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Amortization of Defined Benefit Pension Items [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before taxes	(388)	(404)	(1,163)	(1,211)
Provision for income taxes	155	162	465	484
Net income	$ (233)	$ (242)	$ (698)	$ (727)

XML

Earnings per Share ("EPS") - Additional Information (Detail) - Class A Common Stock [Member] - shares	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Number of Stock options outstanding	0	0
Minimum [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Class A common stock entitled dividend per share percent in comparison to Class B common stock	200.00%

XML

Earnings Per Share ("EPS") - Reconciliation of Basic EPS and Diluted EPS (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 8,023	$ 6,486	$ 22,276	$ 18,034
Class A Common Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 6,307	$ 5,094	$ 17,505	$ 14,165
Weighted average shares outstanding, basic	3,605,829	3,600,729	3,603,429	3,600,729
Basic earnings per share	$ 1.75	$ 1.41	$ 4.86	$ 3.93
Net income	$ 6,307	$ 5,094	$ 17,505	$ 14,165
Weighted average shares outstanding, diluted	5,567,909	5,567,909	5,567,909	5,567,909
Diluted earnings per share	$ 1.44	$ 1.16	$ 4.00	$ 3.24
Class B Common Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 1,716	$ 1,392	$ 4,771	$ 3,869
Weighted average shares outstanding, basic	1,962,080	1,967,180	1,964,480	1,967,180
Basic earnings per share	$ 0.87	$ 0.71	$ 2.43	$ 1.97
Net income	$ 1,716	$ 1,392	$ 4,771	$ 3,869
Weighted average shares outstanding, diluted	1,962,080	1,967,180	1,964,480	1,967,180
Diluted earnings per share	$ 0.87	$ 0.71	$ 2.43	$ 1.97

XML

Employee Benefits - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2017 USD ($)
Retirement Benefits [Abstract]
Number of years service to participate in supplemental plan	1 year
Current fiscal year contribution to pension plan	$ 750,000
Employer expected contribution to Pension Plan in 2017	$ 1,000,000

XML

Employee Benefits - Components of Net Periodic Benefit Cost (Credit) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Defined Benefit Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 310	$ 318	$ 930	$ 954
Interest	362	340	1,087	1,020
Expected return on plan assets	(746)	(694)	(2,238)	(2,082)
Recognized prior service cost (benefit)	(26)	(26)	(78)	(78)
Recognized net actuarial losses	226	200	678	600
Net periodic benefit (credit) cost	126	138	379	414
Supplemental Insurance/ Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	395	455	1,184	1,366
Interest	345	334	1,035	1,002
Recognized prior service cost (benefit)	29	29	87	87
Recognized net actuarial losses	159	200	477	600
Net periodic benefit (credit) cost	$ 928	$ 1,018	$ 2,783	$ 3,055

XML

Fair Value Measurements - Financial Instruments Measured at Fair Value on a Recurring and Non-recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	$ 387,790	$ 499,297
Fair Value Measurements, Level 1 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	343	344
Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	308,202	334,077
Fair Value Measurements, Level 3 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	79,245	164,876
Financial Instruments Measured at Fair Value on a Non-recurring Basis
Impaired Loans	134	260
U.S. Treasury [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	1,994	2,000
U.S. Treasury [Member] | Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	1,994	2,000
SBA Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	80,764	57,767
SBA Backed Securities [Member] | Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	80,764	57,767
U.S. Government Agency and Sponsored Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	219,503	243,325
U.S. Government Agency and Sponsored Mortgage-Backed Securities [Member] | Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	219,503	243,325
Privately Issued Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	954	1,109
Privately Issued Residential Mortgage-Backed Securities [Member] | Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	954	1,109
Obligations Issued by States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	79,245	164,876
Obligations Issued by States and Political Subdivisions [Member] | Fair Value Measurements, Level 3 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	79,245	164,876
Other Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	4,987	4,924
Other Debt Securities [Member] | Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	4,987	4,924
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	343	344
Equity Securities [Member] | Fair Value Measurements, Level 1 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	343	344
U.S. Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS		24,952
U.S. Government Sponsored Enterprises [Member] | Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS		24,952
Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	387,790	499,297
Financial Instruments Measured at Fair Value on a Non-recurring Basis
Impaired Loans	134	260
Carrying Value [Member] | U.S. Treasury [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	1,994	2,000
Carrying Value [Member] | SBA Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	80,764	57,767
Carrying Value [Member] | U.S. Government Agency and Sponsored Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	219,503	243,325
Carrying Value [Member] | Privately Issued Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	954	1,109
Carrying Value [Member] | Obligations Issued by States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	79,245	164,876
Carrying Value [Member] | Other Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	4,987	4,924
Carrying Value [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	$ 343	344
Carrying Value [Member] | U.S. Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS		$ 24,952

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Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Specific adjustments to impaired loans recognized	$ 15,000	$ 11,000	$ (135,000)
Transfers between level 1, 2 and 3		0	0
Liabilities measured at fair value on a recurring or nonrecurring basis	0	0	$ 0
Fair Value Measurements, Level 3 Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized cost of Level 3 securities	79,655,000	79,655,000		$ 180,315,000
Unrealized loss	$ 410,000	$ 410,000		$ 404,000

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Fair Value Measurements - Assets Measured at Fair Value (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Securities AFS [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Fair Value	$ 79,245	$ 164,876
Valuation Technique	Discounted cash flow
Unobservable Input	Discount rate
Impaired Loans [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Fair Value	$ 134	$ 260
Valuation Technique	Appraisal of collateral
Unobservable Input	Appraisal adjustments
Minimum [Member] | Securities AFS [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Unobservable Input Value or Range	0.00%	0.00%
Minimum [Member] | Impaired Loans [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Unobservable Input Value or Range	0.00%	0.00%
Maximum [Member] | Securities AFS [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Unobservable Input Value or Range	2.00%	1.00%
Maximum [Member] | Impaired Loans [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Unobservable Input Value or Range	30.00%	30.00%

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Fair Value Measurements - Assets Measured at Fair Value (Parenthetical) (Detail)	9 Months Ended
	Sep. 30, 2017
Municipal [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Securities maturity period	one year or less

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Fair Value Measurements - Changes in Level 3 Securities (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	$ 164,876	$ 156,997
Purchases	61,393	181,752
Maturities and calls	(146,869)	(159,153)
Amortization	(155)	(163)
Changes in fair value		478
Ending Balance	79,245	179,911
Auction Rate Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	4,298	3,820
Changes in fair value		478
Ending Balance	4,298	4,298
Obligations Issued by States and Political Subdivisions [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	160,578	153,140
Purchases	61,393	181,752
Maturities and calls	(146,869)	(159,116)
Amortization	(155)	(163)
Ending Balance	$ 74,947	175,613
Equity Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance		37
Maturities and calls		$ (37)

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Fair Values of Financial Instruments - Carrying Amount and Fair Value of Company's Financial Instruments (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Financial assets:
Securities held-to-maturity	$ 1,654,908	$ 1,653,986
Loans	2,086,949	1,899,527
Financial liabilities:
Time deposits	607,279	478,359
Other borrowed funds	358,000	293,000
Subordinated debentures	36,083	36,083
Carrying Value [Member]
Financial assets:
Securities held-to-maturity	1,654,908	1,653,986
Loans	2,086,949	1,899,527
Financial liabilities:
Time deposits	607,279	478,359
Other borrowed funds	358,000	293,000
Subordinated debentures	36,083	36,083
Estimated Fair Value [Member]
Financial assets:
Securities held-to-maturity	1,637,497	1,635,808
Loans	2,059,983	1,873,703
Financial liabilities:
Time deposits	606,256	480,133
Other borrowed funds	359,305	294,940
Subordinated debentures	36,083	36,083
Fair Value Measurements, Level 2 Inputs [Member]
Financial assets:
Securities held-to-maturity	1,637,497	1,635,808
Financial liabilities:
Time deposits	606,256	480,133
Other borrowed funds	359,305	294,940
Fair Value Measurements, Level 3 Inputs [Member]
Financial assets:
Loans	2,059,983	1,873,703
Financial liabilities:
Subordinated debentures	$ 36,083	$ 36,083