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 March 31, 2019.

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 every Interactive Data File required to be submitted 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 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	☐	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

Securities registered pursuant to Section 12(b) of the Act:

Class A Common Stock, $1.00 par value	CNBKA	Nasdaq Global Market
(Title of class)	Trading Symbol(s)	(Name of Exchange)

As of April 30, 2019, the Registrant had outstanding:

Class A Common Stock, $1.00 par value	3,610,329 Shares
Class B Common Stock, $1.00 par value	1,957,580 Shares

Century Bancorp, Inc.

Index

		Page Number
Part I	Financial Information		3
	Forward Looking Statements
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets: March 31, 2019 and December 31, 2018		4
	Consolidated Statements of Income: Three Months Ended March 31, 2019 and 2018		5
	Consolidated Statements of Comprehensive Income: Three Months Ended March 31, 2019 and 2018		6
	Consolidated Statements of Changes in Stockholders’ Equity: Three Months Ended March 31, 2019 and 2018		7
	Consolidated Statements of Cash Flows: Three Months Ended March 31, 2019 and 2018		8
	Notes to Consolidated Financial Statements		9 - 32
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		33 - 42
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		42
Item 4.	Controls and Procedures		42
Part II.	Other Information
Item 1.	Legal Proceedings		43
Item 1A.	Risk Factors		43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		43
Item 3.	Defaults Upon Senior Securities		43
Item 4.	Mine Safety Disclosures		43
Item 5.	Other Information		43
Item 6.	Exhibits		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 3 of 44

PART I – Item 1

Century Bancorp, Inc.

Consolidated Balance Sheets (unaudited)

(In thousands, except share data)

	March 31, 2019			December 31, 2018
Assets
Cash and due from banks	$	77,121		$	89,540
Federal funds sold and interest-bearing deposits in other banks		301,240			252,963
Total cash and cash equivalents		378,361			342,503
Securities available-for-sale, amortized cost $345,709 and $336,751, respectively		345,089			336,759
Securities held-to-maturity, fair value $2,074,443 and $1,991,421, respectively		2,110,555			2,046,647
Federal Home Loan Bank of Boston, stock at cost		14,244			17,974
Equity securities, amortized cost $1,635 and $1,635, respectively		1,649			1,596
Loans, net:
Construction and land development		13,305			13,628
Commercial and industrial		767,436			761,625
Municipal		105,288			97,290
Commercial real estate		746,703			750,362
Residential real estate		349,966			348,250
Consumer		21,562			21,359
Home equity		305,839			292,340
Overdrafts		561			724
Total loans, net		2,310,660			2,285,578
Less: allowance for loan losses		28,848			28,543
Net loans		2,281,812			2,257,035
Bank premises and equipment		24,494			23,921
Accrued interest receivable		14,464			14,406
Goodwill		2,714			2,714
Other assets		132,684			120,380
Total assets	$	5,306,066		$	5,163,935
Liabilities
Deposits:
Demand deposits	$	764,545		$	813,478
Savings and NOW deposits		1,783,987			1,707,019
Money market accounts		1,359,016			1,325,888
Time deposits		542,079			560,579
Total deposits		4,449,627			4,406,964
Securities sold under agreements to repurchase		164,500			154,240
Other borrowed funds		257,148			202,378
Subordinated debentures		36,083			36,083
Due to broker		11,740			—
Other liabilities		77,644			63,831
Total liabilities		4,996,742			4,863,496
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 3,610,329 shares and 3,608,329 shares, respectively		3,610			3,608
Common stock, Class B, $1.00 par value per share; authorized 5,000,000 shares; issued 1,957,580 shares and 1,959,580 shares respectively		1,958			1,960
Additional paid-in capital		12,292			12,292
Retained earnings		310,356			301,488
		328,216			319,348
Unrealized losses on securities available-for-sale, net of taxes		(456	)		6
Unrealized losses on securities transferred to held-to-maturity, net of taxes		(2,349	)		(2,565	)
Pension liability, net of taxes		(16,087	)		(16,350	)
Total accumulated other comprehensive loss, net of taxes		(18,892	)		(18,909	)
Total stockholders’ equity		309,324			300,439
Total liabilities and stockholders’ equity	$	5,306,066		$	5,163,935

See accompanying notes to unaudited consolidated interim financial statements.

Page 4 of 44

Century Bancorp, Inc.

Consolidated Statements of Income (unaudited)

(In thousands, except share data)

	Three months ended March 31,
	2019			2018
Interest income
Loans	$	21,309		$	18,267
Securities held-to-maturity		13,788			10,288
Securities available-for-sale		2,631			1,992
Federal funds sold and interest-bearing deposits in other banks		1,349			883
Total interest income		39,077			31,430
Interest expense
Savings and NOW deposits		5,466			2,223
Money market accounts		5,343			2,453
Time deposits		2,793			2,363
Securities sold under agreements to repurchase		385			181
Other borrowed funds and subordinated debentures		1,652			1,742
Total interest expense		15,639			8,962
Net interest income		23,438			22,468
Provision for loan losses		375			450
Net interest income after provision for loan losses		23,063			22,018
Other operating income
Service charges on deposit accounts		2,209			2,067
Lockbox fees		1,089			791
Net gains on sales of securities		—			197
Gains on sales of mortgage loans		15			—
Other income		1,114			1,138
Total other operating income		4,427			4,193
Operating expenses
Salaries and employee benefits		11,035			11,225
Occupancy		1,701			1,637
Equipment		783			794
FDIC assessments		373			383
Other		4,298			3,962
Total operating expenses		18,190			18,001
Income before income taxes		9,300			8,210
(Benefit) provision for income taxes		(118	)		501
Net income	$	9,418		$	7,709
Share data:
Weighted average number of shares outstanding, basic
Class A		3,610,329			3,608,029
Class B		1,957,580			1,959,880
Weighted average number of shares outstanding, diluted
Class A		5,567,909			5,567,909
Class B		1,957,580			1,959,880
Basic earnings per share:
Class A	$	2.05		$	1.68
Class B	$	1.03		$	0.84
Diluted earnings per share
Class A	$	1.69		$	1.38
Class B	$	1.03		$	0.84

See accompanying notes to unaudited consolidated interim financial statements.

Page 5 of 44

Century Bancorp, Inc.

Consolidated Statements of Comprehensive Income (unaudited)

(In thousands)

	Three months ended March 31,
	2019			2018
Net income	$	9,418		$	7,709
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities:
Unrealized (losses) gains arising during period		(462	)		213
Less: reclassification adjustment for gains included in net income		—			(142	)
Total unrealized (losses) gains on securities		(462	)		71
Accretion of net unrealized losses transferred		216			381
Defined benefit pension plans:
Amortization of prior service cost and loss included in net periodic benefit cost		263			293
Other comprehensive income		17			745
Comprehensive income	$	9,435		$	8,454

See accompanying notes to unaudited consolidated interim financial statements.

Page 6 of 44

Century Bancorp, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

For the Three Months Ended March 31, 2019 and 2018

	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, 2017	$	3,606	$	1,962		$	12,292	$	263,666		$	(21,229	)	$	260,297
Net income		—		—			—		7,709			—			7,709
Other comprehensive income, net of tax:
Unrealized holding (losses) gains arising during period, net of $9 in taxes, and $197 in realized gains		—		—			—		—			71			71
Accretion of unrealized losses on securities transferred to held-to-maturity, net of $139 in taxes		—		—			—		—			381			381
Pension liability adjustment, net of $114 in taxes		—		—			—		—			293			293
Adoption of ASU 2018-2, Income Statement-Reporting Comprehensive Income (Topic 220)-Reclassification of Certain Tax Effects from AOCI		—		—			—		3,783			(3,783	)		—
Adoption of ASU 2016-1, Financial Instruments-Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities		—		—			—		29			(29	)		—
Conversion of Class B Common Stock to Class A Common Stock, 2,200 shares		2		(2	)		—		—			—			—
Cash dividends paid, Class A common stock, $.12 per share		—		—			—		(434	)		—			(434	)
Cash dividends paid, Class B common stock, $.06 per share		—		—			—		(117	)		—			(117	)
Balance at March 31, 2018	$	3,608	$	1,960		$	12,292	$	274,636		$	(24,296	)	$	268,200
Balance at December 31, 2018	$	3,608	$	1,960		$	12,292	$	301,488		$	(18,909	)	$	300,439
Net income		—		—			—		9,418			—			9,418
Other comprehensive income, net of tax:
Unrealized holding (losses) gains arising during period, net of $166 in taxes		—		—			—		—			(462	)		(462	)
Accretion of unrealized losses on securities transferred to held-to-maturity, net of $78 in taxes		—		—			—		—			216			216
Pension liability adjustment, net of $103 in taxes		—		—			—		—			263			263
Conversion of Class B Common Stock to Class A Common Stock, 2,300 shares		2		(2	)		—		—			—			—
Cash dividends paid, Class A common stock, $0.12 per share		—		—			—		(433	)		—			(433	)
Cash dividends paid, Class B common stock, $0.06 per share		—		—			—		(117	)		—			(117	)
Balance at March 31, 2019	$	3,610	$	1,958		$	12,292	$	310,356		$	(18,892	)	$	309,324

See accompanying notes to unaudited consolidated interim financial statements.

Page 7 of 44

Century Bancorp, Inc.

Consolidated Statements of Cash Flows (unaudited)

For the Three Months Ended March 31, 2019 and 2018

	Three months ended March 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	9,418		$	7,709
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sales of mortgage loans		(15	)		—
Net gains on sales of securities		—			(197	)
Net (gain) loss on equity securities		(53	)		9
Provision for loan losses		375			450
Deferred income taxes		104			(680	)
Net depreciation and amortization		(468	)		592
(Increase) decrease in accrued interest receivable		(58	)		335
Decrease in other assets		2,187			3,076
(Decrease) increase in other liabilities		(458	)		2,926
Net cash provided by operating activities		11,032			14,220
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from redemptions of Federal Home Loan Bank of Boston stock		4,777			3,464
Purchase of Federal Home Loan Bank of Boston stock		(1,047	)		(1,735	)
Proceeds from calls/maturities of securities available-for-sale		34,927			31,527
Proceeds from sales of securities available-for-sale		—			17,871
Purchase of securities available-for-sale		(34,031	)		(19,336	)
Proceeds from calls/maturities of securities held-to-maturity		88,027			59,409
Purchase of securities held-to-maturity		(148,500	)		(169,974	)
Proceeds from life insurance policies		—			375
Net increase in loans		(25,811	)		(11,198	)
Proceeds from sales of portfolio loans		685			—
Capital expenditures		(1,344	)		(508	)
Net cash used in investing activities		(82,317	)		(90,105	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in time deposits		(18,500	)		(9,539	)
Net increase in demand, savings, money market and NOW deposits		61,163			28,368
Cash dividends		(550	)		(551	)
Net increase (decrease) in securities sold under agreements to repurchase		10,260			(17,430	)
Net increase (decrease) in other borrowed funds		54,770			(30,724	)
Net cash provided by (used in) financing activities		107,143			(29,876	)
Net increase (decrease) in cash and cash equivalents		35,858			(105,761	)
Cash and cash equivalents at beginning of period		342,503			356,430
Cash and cash equivalents at end of period	$	378,361		$	250,669
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest	$	15,462		$	9,008
Income taxes		(1,265	)		225
Change in unrealized gains (losses) on securities available-for-sale, net of taxes		(462	)		71
Change in unrealized losses on securities transferred to held-to-maturity, net of taxes		216			381
Pension liability adjustment, net of taxes		263			293
Change in due to (from) to broker		11,740			10,011

See accompanying notes to unaudited consolidated interim financial statements.

Page 8 of 44

Century Bancorp, Inc.

Notes to Unaudited Consolidated Interim Financial Statements

Three Months Ended March 31, 2019 and 2018

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, 2018, 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.

Note 2. Recent Accounting Developments

Recently Adopted Accounting Standards Updates

In July 2017, FASB issued 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. The effect of this update did not 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 of 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. The effect of this update did not have a material impact on the Company’s consolidated financial position.

Page 9 of 44

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. The Company also reviewed contracts to determine if they contain embedded leases. The Company’s balance sheet impact was $15.1 million as of January 1, 2019. This amount was recorded as a right of use asset with a corresponding lease liability.

In July 2018, ASU 2018-10, “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”) was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Also in July 2018, ASU 2018-11, “Targeted Improvements” (“ASU 2018-11”) was issued and allows for an optional transition method in which the provisions of Topic 842 would be applied upon the adoption date and would not have to be retroactively applied to the earliest reporting period presented in the consolidated financial statements.” The Company used this optional transition method for the adoption of Topic 842.

Accounting Standards Issued but not yet Adopted

The following list identifies ASUs applicable to the Company that have been issued by the FASB but are not yet effective:

In August 2018, FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license).This ASU is effective for annual reporting periods beginning after December 15, 2019. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In August 2018, FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit plans. The amendments in this ASU remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. This ASU is effective for annual reporting periods beginning after December 15, 2020. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value. The amendments in this ASU modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. This ASU is effective for annual reporting periods beginning after December 15, 2019. 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. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

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 in the process of analyzing this ASU, has purchased a software solution and is capturing information needed to implement this update. The Company has started to input information and is in the beginning stages of running the software program. The Company has not determined the impact, if any, as of March 31, 2019.

Page 10 of 44

Securities and Exchange Commission (SEC) ruling:

In August 2018, the SEC issued a final rule that amends certain of the Commission’s disclosure requirements “that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, U.S. GAAP, or changes in the information environment.” The financial reporting implications of the final rule’s amendments may vary by company, but the changes are generally expected to reduce or eliminate some of an SEC registrant’s disclosure requirements. In limited circumstances, however, the amendments may expand those requirements, including those related to interim disclosures about changes in stockholders’ equity. Under the requirements, registrants must now analyze changes in stockholders’ equity, in the form of a reconciliation, for “the current and comparative year-to-date periods, with subtotals for each interim period.” Beginning with its March 31, 2019 filing, the Company included a reconciliation for the current quarter and year-to-date interim periods as well as the comparative periods of the prior years (i.e., a reconciliation covering each period for which an income statement is presented).

Note 3. Securities Available-for-Sale

	March 31, 2019								December 31, 2018
	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	$	2,000	$	—	$	2	$	1,998	$	2,000	$	—	$	8	$	1,992
U.S. Government Sponsored Enterprises		3,950		—		8		3,942		3,946		—		31		3,915
SBA Backed Securities		72,906		—		318		72,588		70,477		1		284		70,194
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		194,549		228		572		194,205		162,604		536		250		162,890
Privately Issued Residential Mortgage-Backed Securities		653		4		8		649		679		3		10		672
Obligations Issued by States and Political Subdivisions		68,051		56		—		68,107		93,445		58		—		93,503
Other Debt Securities		3,600		41		41		3,600		3,600		37		44		3,593
Total	$	345,709	$	329	$	949	$	345,089	$	336,751	$	635	$	627	$	336,759

Included in SBA Backed Securities, 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 $188,887,000 and $197,304,000 at March 31, 2109 and December 31, 2018, 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 $35,852,000 and $34,787,000 at March 31, 2019 and December 31, 2018, respectively. There were no sales of available-for-sale securities for the three months ended March 31, 2019. The Company realized gross gains of $197,000 from the proceeds of $17,871,000 from the sales of available-for-sale securities for the three months ended March 31, 2018.

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 March 31, 2019.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	66,419	$	66,413
After one but within five years		101,922		101,815
After five but within ten years		133,284		132,854
More than 10 years		44,084		44,007
Total	$	345,709	$	345,089

Page 11 of 44

The weighted average remaining life of investment securities available-for-sale at March 31, 2019 was 5.2 years. Included in the weighted average remaining life calculation at March 31, 2019 were $3,950,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The contractual maturities, which were used in the table above, of mortgage-backed securities, will differ from the actual maturities, due to the ability of the issuers to prepay underlying obligations. Also $273,776,000 of the securities are floating rate or adjustable rate and reprice prior to maturity.

As of March 31, 2019 and December 31, 2018, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not more likely than not that it will be required to sell these debt securities before the anticipated recovery of its remaining amortized cost. In making its other-than-temporary impairment evaluation, the Company considered that the principal and interest on these securities are from issuers that are investment grade. The change in the unrealized losses on the Obligations Issued by States and Political Subdivisions, Privately Issued Residential Mortgage-Backed Securities and Other Debt Securities was primarily caused by changes in credit spreads and liquidity issues in the marketplace.

The unrealized loss on SBA Backed Securities, U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities related primarily to interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019 or December 31, 2018.

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.

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at March 31, 2019. 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 21 and 31 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 183 holdings at March 31, 2019.

	March 31, 2019
	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	$	—	$	—	$	1,998	$	2	$	1,998	$	2
U.S. Government Sponsored Enterprises		—		—		3,942		8		3,942		8
SBA Backed Securities		19,409		40		53,180		278		72,589		318
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		70,530		278		43,656		294		114,186		572
Privately Issued Residential Mortgage-Backed Securities		—		—		479		8		479		8
Obligations Issued by States and Political Subdivisions		—		—		—		—		—		—
Other Debt Securities		—		—		459		41		459		41
Total temporarily impaired securities	$	89,939	$	318	$	103,714	$	631	$	193,653	$	949

Page 12 of 44

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at December 31, 2018. 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 30 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 190 holdings at December 31, 2018.

	December 31, 2018
	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	$	—	$	—	$	1,992	$	8	$	1,992	$	8
U.S. Government Sponsored Enterprises		3,914		31		—		—		3,914		31
SBA Backed Securities		17,950		28		44,323		256		62,273		284
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		19,244		21		45,782		229		65,026		250
Privately Issued Residential Mortgage-Backed Securities		—		—		495		10		495		10
Obligations Issued by States and Political Subdivisions		—		—		—		—		—		—
Other Debt Securities		—		—		455		44		455		44
Total temporarily impaired securities	$	41,108	$	80	$	93,047	$	547	$	134,155	$	627

Note 4. Investment Securities Held-to-Maturity

	March 31, 2019								December 31, 2018
	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. Treasury	$	—	$	—	$	—	$	—	$	9,960	$	—	$	2	$	9,958
U.S. Government Sponsored Enterprises		201,327		453		417		201,363		234,228		336		803		233,761
SBA Backed Securities		50,797		—		1,295		49,502		52,051		—		2,065		49,986
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities		1,858,431		5,306		40,159		1,823,578		1,750,408		2,324		55,016		1,697,716
Total	$	2,110,555	$	5,759	$	41,871	$	2,074,443	$	2,046,647	$	2,660	$	57,886	$	1,991,421

Included in U.S. Government and Agency Securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $1,499,836,000 and $1,441,059,000 at March 31, 2019 and December 31, 2018, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank of Boston at fair value amounting to $305,776,000 and $291,190,000 at March 31, 2019 and December 31, 2018, respectively. There were no sales of held-to-maturity securities for the three months ended March 31, 2019 and March 31, 2018 respectively.

At March 31, 2019 and December 31, 2018, 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 13 of 44

The following table shows the maturity distribution of the Company’s securities held-to-maturity at March 31, 2019.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	37,216	$	37,070
After one but within five years		1,723,841		1,696,173
After five but within ten years		336,847		328,635
More than ten years		12,651		12,565
Total	$	2,110,555	$	2,074,443

The weighted average remaining life of investment securities held-to-maturity at March 31, 2019 was 4.0 years. Included in the weighted average remaining life calculation at March 31, 2019 were $116,160,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The contractual maturities, which were used in the table above, of mortgage-backed securities, will differ from the actual maturities, due to the ability of the issuers to prepay underlying obligations. Also $120,000 of the securities are floating rate or adjustable rate and reprice prior to maturity.

As of March 31, 2019 and December 31, 2018, 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 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 Sponsored Enterprises 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 more likely than not 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 at March 31, 2019 or December 31, 2018.

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 March 31, 2019. 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 12 and 304 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 487 holdings at March 31, 2019.

	March 31, 2019
	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	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government Sponsored Enterprises		—		—		74,876		417		74,876		417
SBA Backed Securities		—		—		49,502		1,295		49,502		1,295
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		59,831		439		1,237,048		39,720		1,296,879		40,159
Total temporarily impaired securities	$	59,831	$	439	$	1,361,426	$	41,432	$	1,421,257	$	41,871

Page 14 of 44

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at December 31, 2018. 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 56 and 315 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 475 holdings at December 31, 2018.

	December 31, 2018
	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	$	9,958	$	2	$	—	$	—	$	9,958	$	2
U.S. Government Sponsored Enterprises		9,849		42		69,499		761		79,348		803
SBA Backed Securities		—		—		49,987		2,065		49,987		2,065
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		188,125		2,032		1,249,689		52,984		1,437,814		55,016
Total temporarily impaired securities	$	207,932	$	2,076	$	1,369,175	$	55,810	$	1,577,107	$	57,886

Note 5. 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 March 31,
	2019			2018
	(in thousands)
Allowance for loan losses, beginning of period	$	28,543		$	26,255
Loans charged off		(142	)		(87	)
Recoveries on loans previously charged-off		72			77
Net charge-offs		(70	)		(10	)
Provision charged to expense		375			450
Allowance for loan losses, end of period	$	28,848		$	26,695

Page 15 of 44

Further information pertaining to the allowance for loan losses for the three months ending March 31, 2019 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, 2018	$	1,092		$	10,998		$	1,838	$	10,663	$	2,190		$	365		$	1,111		$	286		$	28,543
Charge-offs		—			(43	)		—		—		—			(99	)		—			—			(142	)
Recoveries		—			18			—		—		—			54			—			—			72
Provision		(81	)		183			160		104		(55	)		22			(10	)		52			375
Ending balance at March 31, 2019	$	1,011		$	11,156		$	1,998	$	10,767	$	2,135		$	342		$	1,101		$	338		$	28,848
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	6		$	—	$	94	$	—		$	—		$	—		$	—		$	100
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,011		$	11,150		$	1,998	$	10,673	$	2,135		$	342		$	1,101		$	338		$	28,748
Loans:
Ending balance	$	13,305		$	767,436		$	105,288	$	746,703	$	349,966		$	22,123		$	305,839		$	—		$	2,310,660
Loans deemed to be impaired	$	—		$	320		$	—	$	2,946	$	—		$	—		$	—		$	—		$	3,266
Loans not deemed to be impaired	$	13,305		$	767,116		$	105,288	$	743,757	$	349,966		$	22,123		$	305,839		$	—		$	2,307,394
Further information pertaining to the allowance for loan losses for the three months ending March 31, 2018 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, 2107	$	1,645		$	9,651		$	1,720	$	9,728	$	1,873		$	373		$	989		$	276		$	26,255
Charge-offs		—			(5	)		—		—		—			(82	)		—			—			(87	)
Recoveries		—			23			—		—		—			54			—			—			77
Provision		(207	)		(5	)		—		59		586			(24	)		78			(37	)		450
Ending balance at March 31, 2018	$	1,438		$	9,664		$	1,720	$	9,787	$	2,459		$	321		$	1,067		$	239		$	26,695
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	12		$	—	$	94	$	580		$	—		$	—		$	—		$	686
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,438		$	9,652		$	1,720	$	9,693	$	1,879		$	321		$	1,067		$	239		$	26,009
Loans:
Ending balance	$	17,583		$	758,621		$	104,044	$	726,440	$	300,941		$	19,339		$	260,179		$	—		$	2,187,147
Loans deemed to be impaired	$	—		$	522		$	—	$	2,528	$	2,774		$	—		$	—		$	—		$	5,824
Loans not deemed to be impaired	$	17,583		$	758,099		$	104,044	$	723,912	$	298,167		$	19,339		$	260,179		$	—		$	2,181,323

Page 16 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 March 31, 2019 and December 31, 2018.

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 March 31, 2019 and December 31, 2018.

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 March 31, 2019 and December 31, 2018 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 March 31, 2019.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	13,305	$	762,991	$	105,288	$	719,367
4 (Monitor)		—		4,125		—		24,390
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		320		—		2,946
Total	$	13,305	$	767,436	$	105,288	$	746,703

The following table presents the Company’s loans by risk rating at December 31, 2018.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	13,628	$	757,089	$	97,290	$	723,170
4 (Monitor)		—		4,135		—		24,542
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		401		—		2,650
Total	$	13,628	$	761,625	$	97,290	$	750,362

Page 17 of 44

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at March 31, 2019 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	482,374	$	62,103	$	41,335	$	585,812
A1 – A3		181,409		7,605		151,031		340,045
Baa1 – Baa3		—		26,970		118,868		145,838
Ba2		—		6,810		—		6,810
Total	$	663,783	$	103,488	$	311,234	$	1,078,505

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2018.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	491,247	$	54,105	$	42,790	$	588,142
A1 – A3		172,472		7,605		151,381		331,458
Baa1 – Baa3		—		26,970		118,197		145,167
Ba2		—		6,810		—		6,810
Total	$	663,719	$	95,490	$	312,368	$	1,071,577

Page 18 of 44

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 March 31, 2019 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	$	—	$	—	$	—	$	—	$	13,305	$	13,305
Commercial and industrial		138		31		—		169		767,267		767,436
Municipal		—		—		—		—		105,288		105,288
Commercial real estate		422		182		—		604		746,099		746,703
Residential real estate		2,202		119		—		2,321		347,645		349,966
Consumer and overdrafts		2		6		—		8		22,115		22,123
Home equity		1,659		1,164		—		2,823		303,016		305,839
Total	$	4,423	$	1,502	$	—	$	5,925	$	2,304,735	$	2,310,660

Further information pertaining to the allowance for loan losses at December 31, 2018 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	$	—	$	—	$	—	$	—	$	13,628	$	13,628
Commercial and industrial		187		115		—		302		761,323		761,625
Municipal		—		—		—		—		97,290		97,290
Commercial real estate		774		190		—		964		749,398		750,362
Residential real estate		2,554		569		—		3,123		345,127		348,250
Consumer and overdrafts		24		14		—		38		22,045		22,083
Home equity		1,108		425		—		1,533		290,807		292,340
Total	$	4,647	$	1,313	$	—	$	5,960	$	2,279,618	$	2,285,578

Impaired loans

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, 2018.

Page 19 of 44

The following is information pertaining to impaired loans for March 31, 2019:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 3/31/19		Interest Income Recognized for 3 Months Ending 3/31/19
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		93		306		—		87		2
Municipal		—		—		—		—		—
Commercial real estate		182		206		—		188		—
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	275	$	512	$	—	$	275	$	2
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		227		228		6		262		3
Municipal		—		—		—		—		—
Commercial real estate		2,764		2,881		94		2,694		24
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	2,991	$	3,109	$	100	$	2,956	$	27
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		320		534		6		349		5
Municipal		—		—		—		—		—
Commercial real estate		2,946		3,087		94		2,882		24
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	3,266	$	3,621	$	100	$	3,231	$	29

Page 20 of 44

The following is information pertaining to impaired loans for December 31, 2018:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 3/31/18		Interest Income Recognized for 3 Months Ending 3/31/18
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		87		291		—		49		—
Municipal		—		—		—		—		—
Commercial real estate		189		212		—		265		—
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	276	$	503	$	—	$	314	$	—
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		314		315		54		388		5
Municipal		—		—		—		—		—
Commercial real estate		2,461		2,575		91		2,278		23
Residential real estate		—		—		—		3,827		6
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	2,775	$	2,890	$	145	$	6,493	$	34
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		401		606		54		437		5
Municipal		—		—		—		—		—
Commercial real estate		2,650		2,787		91		2,543		23
Residential real estate		—		—		—		3,827		6
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	3,051	$	3,393	$	145	$	6,807	$	34

Troubled debt restructurings are identified as a modification in which a concession was granted to a customer who was having financial difficulties. This concession may be below market rate, longer amortization/term, or a lower payment amount. The present value calculation of the modification did not result in an increase in the allowance for these loans beyond any previously established allocations.

There was no troubled debt restructuring that occurred during the three month period ended March 31, 2019. Also, there were no commitments to lend additional funds to troubled debt restructuring borrowers. There were no troubled debt restructurings that subsequently defaulted during the first three months of 2019.

There was one residential real estate loan and one consumer loan that were modified during the first quarter of 2018. The loans were modified by reducing the interest rates as well as extending the terms on both loans. The pre-modification and post-modification outstanding recorded investment was $2,675,000 for the residential real estate loan that was not accruing interest and had a specific reserve of $575,000. The pre-modification and post-modification outstanding recorded investment was $17,000 for the consumer loan that was accruing and had a specific reserve of $1,000. The financial impact for the modifications was not material. There were no troubled debt restructurings that subsequently defaulted during the first three months of 2018.

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Note 6. 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 March 31, 2019			Three Months Ended March 31, 2018			Affected Line Item in the Statement where Net Income is Presented
	(in thousands)
Unrealized gains and losses on available-for-sale securities	$	—		$	197		Net gains on sales of investments
Tax (expense) or benefit		—			(55	)	Provision for income taxes
Net of tax	$	—		$	142		Net income
Accretion of unrealized losses transferred	$	(294	)	$	(520	)	Interest on securities held-to-maturity
Tax (expense) or benefit		78			139		Provision for income taxes
Net of tax	$	(216	)	$	(381	)	Net income
Amortization of defined benefit pension items
Prior-service costs	$	(29	) (b)	$	(4	) (b)	Salaries and employee benefits
Actuarial gains (losses)		(337	) (b)		(403	) (b)	Salaries and employee benefits
Total before tax		(366	)		(407	)	Income before taxes
Tax (expense) or benefit		103			114		Provision for income taxes
Net of tax	$	(263	)	$	(293	)	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).

Note 7. 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 March 31, 2019 and 2018.

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

	Three Months Ended March 31,
(in thousands except share and per share data)	2019		2018
Basic EPS Computation:
Numerator:
Net income, Class A	$	7,409	$	6,062
Net income, Class B		2,009		1,647
Denominator:
Weighted average shares outstanding, Class A		3,610,329		3,608,029
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Basic EPS, Class A	$	2.05	$	1.68
Basic EPS, Class B		1.03		0.84
Diluted EPS Computation:
Numerator:
Net income, Class A	$	7,409	$	6,062
Net income, Class B		2,009		1,647
Total net income, for diluted EPS, Class A computation		9,418		7,709
Denominator:
Weighted average shares outstanding, basic, Class A		3,610,329		3,608,029
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Weighted average shares outstanding diluted, Class A		5,567,909		5,567,909
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Diluted EPS, Class A	$	1.69	$	1.38
Diluted EPS, Class B		1.03		0.84

Note 8. 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.

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Components of Net Periodic Benefit Cost for the Three Months Ended March 31,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2019			2018			2019		2018
	(in thousands)
Service cost	$	276		$	353		$	256	$	277
Interest		473			370			482		346
Expected return on plan assets		(819	)		(954	)		—		—
Recognized prior service cost (benefit)		—			(25	)		28		29
Recognized net actuarial losses		229			227			109		176
Net periodic benefit (credit) cost	$	159		$	(29	)	$	875	$	828

Approximately $502,000 and $169,000 of costs other than service costs, from the table above, are included in other expenses for the three months ended March 31, 2019 and 2018, respectively.

Contributions

The Company does not intend to contribute to the Defined Benefit Pension Plan in 2019.

Note 9. Fair Value Measurements

The Company follows FASB ASC 820-10, Fair Value Measurements and Disclosures and ASU 2016-1, “Financial Instruments-Overall” (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities, 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, municipal bonds, and OTC derivatives.

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, as well as certain highly structured OTC derivative contracts.

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The results of the fair value hierarchy as of March 31, 2019, 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	$	1,998	$	—	$	1,998	$	—
U.S. Government Sponsored Enterprises		3,942		—		3,942		—
SBA Backed Securities		72,588		—		72,588		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		194,205		—		194,205		—
Privately Issued Residential Mortgage-Backed Securities		649		—		649		—
Obligations Issued by States and Political Subdivisions		68,107		—		4,775		63,332
Other Debt Securities		3,600		—		3,600		—
Total	$	345,089	$	—	$	281,757	$	63,332
Other Real Estate Owned	$	2,225	$	—	$	—	$	2,225
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	$	1,649	$	328	$	1,321	$	—
Financial Instruments Measured at Fair Value on a Non-recurring Basis Impaired Loans	$	195	$	—	$	—	$	195

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 (credits) provisions relate to impaired loans recognized for the three month period ended March 31, 2019 amounted to ($2,000).

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)	$	63,332	Discounted cash flow	Discount rate	2.1%-3.8% (3)
Other Real Estate Owned	$	2,225	Appraisal of collateral (1)	Appraisal adjustments (2)	30% discount
Impaired Loans	$	195	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.

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The changes in Level 3 securities for the three month period ended March 31, 2019 are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Total
	(in thousands)
Balance at December 31, 2018	$	—	$	88,728		$	88,728
Purchases		—		970			970
Maturities and calls		—		(26,352	)		(26,352	)
Amortization		—		(14	)		(14	)
Changes in fair value		—		—			—
Balance at March 31, 2019	$	—	$	63,332		$	63,332

The amortized cost of Level 3 securities was $63,332,000 at March 31, 2019 with an unrealized loss of $0. The securities in this category are generally municipal securities with no readily determinable fair value. Management evaluated the fair value of these securities based on an evaluation of the underlying issuer, prevailing rates and market liquidity. There was no change in the fair value of other real estate owned for the first three months of 2019. The fair value of impaired loans decreased by $56,000, for the first three months of 2019, mainly as a result of a charge-off of one loan. There were no liabilities measured at fair value on a recurring or nonrecurring basis during the three month period ended March 31, 2019.

The changes in Level 3 securities for the three month period ended March 31, 2018, are shown in the table below:

	Auction Rate Securities			Obligations Issued by States & Political Subdivisions			Total
	(in thousands)
Balance at December 31, 2017	$	4,459		$	78,141		$	82,600
Purchases		—			20,416			20,416
Maturities and calls		—			(22,068	)		(22,068	)
Transfer to Level 2		(4,459	)		—			(4,459	)
Amortization		—			(24	)		(24	)
Changes in fair value		—			—			—
Balance at March 31, 2018	$	—		$	76,465		$	76,465

The amortized cost of Level 3 securities was $76,465,000 at March 31, 2018 with an unrealized loss of $0. 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.

Page 26 of 44

The results of the fair value hierarchy as of December 31, 2018, 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	$	1,992	$	—	$	1,992	$	—
U.S. Government Sponsored Enterprises		3,915		—		3,915		—
SBA Backed Securities		70,194		—		70,194		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		162,890		—		162,890		—
Privately Issued Residential Mortgage-Backed Securities		672		—		672		—
Obligations Issued by States and Political Subdivisions		93,503		—		4,775		88,728
Other Debt Securities		3,593				3,593
Total	$	336,759	$	—	$	248,031	$	88,728
Other Real Estate Owned	$	2,225	$	—	$	—	$	2,225
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	$	1,596	$	293	$	1,303	$	—
Financial Instruments Measured at Fair Value on a Non-recurring Basis Impaired Loans	$	251	$	—	$	—	$	251

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 relate to impaired loans recognized for 2018 for the estimated credit loss amounted to $540,000.

There was a transfer of an auction rate security during 2018 from level 3 to level 2. Quoted prices on the auction rate security became available but traded infrequently. There were no other transfers between level 1, 2 and 3 for the year ended December 31, 2018. There were no liabilities measured at fair value on a recurring or nonrecurring basis during the year ended December 31, 2018.

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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)	$	88,728	Discounted cash flow	Discount rate	2.1%-4.1% (3)
Other Real Estate Owned	$	2,225	Appraisal of collateral (1)	Appraisal adjustments (2)	30% discount
Impaired Loans	$	251	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.

Note 10. 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 non-financial 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

The fair value of loans is estimated using the exit price notion consistent with Topic 820, Fair Value Measurement. Fair value is determined based on a discounted cash flow analysis. The discounted cash flow analysis was based on the contractual maturity of the loan and market indications of rates, prepayment speeds, defaults and credit risk. For certain non-performing assets fair value is determined based on the estimated values of the underlying collateral of individual analysis of receipts.

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.

Page 28 of 44

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 March 31, 2019 and December 31, 2018. 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.

March 31, 2019	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	$	2,110,555	$	2,074,443	$	—	$	2,074,443	$	—
Loans (1)		2,310,660		2,321,747		—		—		2,321,747
Financial liabilities:
Time deposits		542,079		542,733		—		542,733		—
Other borrowed funds		257,148		259,045		—		259,045		—
Subordinated debentures		36,083		36,083		—		36,083		—
December 31, 2018
Financial assets:
Securities held-to-maturity	$	2,046,647	$	1,991,421	$	—	$	1,991,421	$	—
Loans (1)		2,257,035		2,279,712		—		—		2,279,712
Financial liabilities:
Time deposits		560,579		559,988		—		559,988		—
Other borrowed funds		202,378		203,122		—		203,122		—
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.

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the type of financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Bank’s entire holdings of a particular financial instrument. Because no active market exists for some of the Bank’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, cash flows, current economic conditions, risk characteristics and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions and changes in the loan, debt and interest rate markets could significantly affect the estimates. Further, the income tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on the fair value estimates and have not been considered.

Page 29 of 44

Note 11. Revenue from Contracts with Customers

Revenue from contracts with customers in the scope of ASC Topic 606 is measured based on the consideration specified in the contract with a customer, and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations.

The Company’s performance obligations are typically satisfied as services are rendered, and our contracts do not include multiple performance obligations. Payment is generally collected at the time services are rendered, or monthly. Unsatisfied performance obligations at the report date are not material to our consolidated financial statements.

The Company pays sales commissions to its employees in accordance with certain incentive plans. The Company expenses sales commissions when incurred if we do not expect to recover these costs from the terms of the contract with the customer. Sales commissions are included in compensation expense.

In certain cases, other parties are involved with providing products and services to our customers. If the Company is a principal in the transaction (providing goods or services itself), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (arranging for another party to provide goods or services), the Company reports its net fee or commission retained as revenue.

Waivers and reversals are recorded as a reduction of revenue either when the revenue is recognized by the Company or at the time the waiver or reversal is earned by the customer.

A. Change in accounting policy

The Company adopted Topic 606 Revenue from Contracts with Customers with a date of initial application of January 1, 2018 through the first quarter of 2019 and has applied the guidance to all contracts within the scope of Topic 606 as of that date . As a result, the Company has changed its accounting policy for revenue recognition as detailed in this footnote.

The Company applied Topic 606 using the cumulative effect method. There was no cumulative effect adjustment as of January 1, 2018, and there were no material changes to the financial statements at or for the three months ended March 31, 2018 and March 31, 2019, respectively, as a result of adopting Topic 606.

B. Practical Expedients

The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

The Company applies the practical expedient in paragraph 606-10-32-18 and does not adjust the consideration from customers for the effects of a significant financing component if at contract inception the period between when the entity transfers the goods or services and when the customer pays for that good or service will be one year or less.

C. Nature of goods and services

The vast majority of the Company’s revenue is specifically out-of-scope of Topic 606. For the revenue in-scope, the following is a description of principal activities, separated by the timing of revenue recognition, from which the Company generates its revenue from contracts with customers.

a. Revenue earned at a point in time – Examples of revenue earned at a point in time are ATM transaction fees, wire transfer fees, NSF fees, credit and debit card interchange fees and foreign exchange transaction fees. Revenue is generally derived from transactional information accumulated by our systems and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction. The Company is the principal in each of these contracts, with the exception of credit and debit card interchange fees, in which case we are acting as the agent and record revenue net of expenses paid to the principal.

b. Revenue earned over time – The Company earns revenue from contracts with customers in a variety of ways in which the revenue is earned over a period of time – generally monthly or quarterly. Examples of this type of revenue are deposit account service fees, lockbox fees, investment management fees, merchant referral services, and safe deposit box fees. Account service charges, management fees and referral fees are recognized on a monthly basis while any transaction based income is recorded as the activity occurs. Revenue is primarily based on the number and type of transactions or assets managed and is generally derived from transactional information accumulated by our systems. Revenue is recorded in the same period as the related transactions occur or services are rendered to the customer.

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D. Disaggregation of revenue

The following table presents total revenues as presented in the Consolidated Statements of Income and the related amounts which are from contracts with customers within the scope of Topic 606. As illustrated here, the vast majority of our revenues are specifically excluded from the scope of Topic 606.

	Three Months Ended 3/31/2019		Revenue from Contracts in Scope of Topic 606		Three Months Ended 3/31/2018		Revenue from Contracts in Scope of Topic 606
	(dollars in thousands)
Total net interest income	$	23,438	$	—	$	22,468	$	—
Noninterest income:
Service charges on deposit accounts		2,209		2,209		2,067		2,067
Lockbox fees		1,089		1,089		791		791
Net gains on sales of securities		—		—		197		—
Gains on sales of mortgage loans		15		—		—		—
Other income		1,114		800		1,138		719
Total noninterest income		4,427		4,098		4,193		3,577
Total revenues	$	27,865	$	4,098	$	26,661	$	3,577

The following table provides information about receivables with customers.

(dollars in thousands)	March 31, 2019		December 31, 2018
Receivables, which are included in “Other assets”	$	1,343	$	1,205

Note 12. Leases

The Company has operating leases primarily for branch locations as well as data processing centers. The Company’s operating leases have remaining lease terms of 1 year to 32 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. The Company also has one sublease for part of a data processing center that the Company currently leases from a lessor. The sublease expires in 2021 with an option to terminate and no option to extend. Lease income, for the sublease, totaled approximately $10,000 for the three months ended March 31, 2019.

The components of lease expense were as follows:

	Three Months Ended 3/31/2019
(in thousands)
Operating lease costs including variable costs	$	711

Supplemental cash flow information related to leases was as follows:

	Three Months Ended 3/31/2019
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	538
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	443

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Supplemental balance sheet information related to leases was as follows:

	3/31/2019
(in thousands, except lease term and discount rate)
Operating Leases:
Operating lease right-of-use assets, included in other assets	$	14,496
Operating lease liabilities, included in other liabilities	$	14,637
Weighted Average Remaining Lease Term:
Operating Leases		11 Years
Weighted Average Discount Rate:
Operating Leases		3.45	%

Maturities of lease liabilities were as follows:

	Operating Leases
(in thousands)
Year Ending December 31,
2019 (excluding the three months ended March 31, 2019)	$	1,632
2020		2,120
2021		1,841
2022		1,709
2023		1,671
Thereafter		8,949
Total lease payments		17,922
Less imputed interest		(3,285	)
Total lease payments	$	14,637

As of March 31, 2019, we have an additional operating lease with total undiscounted cash payments of $144,000, for a data center, that has not yet commenced. This operating lease will commence in April 2019 with a lease term of 3 years.

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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 March 31, 2019, the Company had total assets of $5.3 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 and large healthcare and higher educational institutions primarily 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 years, 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 three months ended March 31, 2019, was $9,418,000 or $1.69 per Class A share diluted, an increase of 22.2% compared to net income of $7,709,000, or $1.38 per Class A share diluted, for the same period a year ago.

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

	Three Months Ended March 31,
	2019		2018
Basic EPS – Class A common	$	2.05	$	1.68
Basic EPS – Class B common	$	1.03	$	0.84
Diluted EPS – Class A common	$	1.69	$	1.38
Diluted EPS – Class B common	$	1.03	$	0.84

Net interest income totaled $23,438,000 for the quarter ended March 31, 2019 compared to $22,468,000 for the same period in 2018. The 4.3% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.19% on a fully taxable equivalent basis in 2018 to 2.11% for the same period in 2019. This was primarily the result of increased rates paid on deposits.

The average balances of earning assets increased by 8.7% combined with an average yield increase of 0.40%, resulting in an increase in interest income of $7,647,000. The average balance of interest bearing liabilities increased 7.7% combined with an average cost of funds increase of 0.61%, resulting in an increase in interest expense of $6,677,000.

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

The net interest margin increased during 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 of 2017. During 2017, the Company did not see a corresponding increase in short term rates on interest bearing liabilities. The margin decreased for 2018 mainly as a result of a decrease in the corporate tax rate from 34% to 21%. This decrease results in a lower tax equivalent yield on tax-exempt assets. During the fourth quarter of 2018 and first quarter of 2019, the Company increased its interest-bearing deposits. These deposits increased net interest income, but decreased the net interest margin. 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 decreased by $75,000 from $450,000 for the three months ended March 31, 2018 to $375,000 for the same period in 2019. Refer to the allowance for loan loss section of the management discussion and analysis for additional discussion. Non-performing assets totaled $3,727,000 at March 31, 2019, compared to $3,538,000 at December 31, 2018.

The Company’s effective tax rate decreased from 6.1% for the quarter ended March 31, 2018 to (1.3%) for the same period in 2019. This was primarily as a result of a reduction in tax accruals related to sequestration of the refundable portion of our alternative minimum tax (AMT) credit carryforward. On January 14, 2019, the IRS updated its announcement “Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations” to clarify that refundable AMT credits under Section 53(e) of the Internal Revenue Code are not subject to sequestration for taxable years beginning after December 31, 2017. Therefore, the full amount of the AMT credit carryover will be refunded to the Company.

Recent Market Developments

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “D-F Act”) became law. The D-F 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 D-F 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 D-F 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 D-F 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 D-F 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 federal banking agencies have issued notices of proposed rulemaking to make certain amendments to the Rule to simply and tailor compliance requirements and to conform the Rule to the EGRRCPA (discussed below).

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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.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted, which represents the most comprehensive reform to the U.S. tax code in over thirty years. The majority of the provisions of the Tax Act took effect on January 1, 2018. The Tax Act lowered the Company’s federal tax rate from 34% to 21%. Also, for tax years beginning after December 31, 2017, the corporate Alternative Minimum Tax (“AMT”) has been repealed. For 2018 through 2021, the AMT credit carryforward can offset regular tax liability and is refundable in an amount equal to 50% (100% for 2021) of the excess of the minimum tax credit for the tax year over the amount of the credit allowable for the year against regular tax liability. Accordingly, it is anticipated that the full amount of the alternative minimum tax credit carryforward will be recovered in tax years beginning before 2022. The Tax Act also contains other provisions that may affect the Company currently or in future years. Among these are changes to the deductibility of meals and entertainment, the deductibility of executive compensation, the dividend received deduction and net operating loss carryforwards. Tax Act changes for individuals include lower tax rates, mortgage interest and state and local tax limitations as well as an increase in the standard deduction, among others.

On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act, or the EGRRCPA, became law. This is arguably the most significant financial institution legislation since the D-F Act. The EGRRCPA changes certain of the regulatory requirements of the D-F Act and includes provisions intended to relieve the regulatory burden on “community banks.” Among other things, for qualifying community banks with less than $10 billion in total consolidated assets, the EGRRCPA contains a safe harbor from the D-F Act “ability to repay” mortgage requirements, an exemption from the Volcker Rule, may permit filing of simplified Call Reports, and potentially will result in some alleviation of the D-F Act and U.S. Basel III capital mandates. The EGRRCPA requires the federal banking agencies to develop a community bank leverage ratio (defined as the ratio of tangible equity capital to average total consolidated assets) for banks and holding companies with total consolidated assets of less than $10 billion and an appropriate risk profile. The required regulations must specify a minimum community bank leverage ratio of not less than 8% and not more than 10%. The federal banking agencies jointly issued a notice of proposed rulemaking which would set the minimum ratio at 9%. Qualifying banks that exceed the minimum community bank leverage ratio will be deemed to be in compliance with all other capital and leverage requirements including the capital ratio requirements that are required to be considered well capitalized under Section 38 of Federal Deposit Insurance Act.

Financial Condition

Loans

On March 31, 2019, total loans outstanding were $2,310,660,000 up by $25,082,000 from the total on December 31, 2018. At March 31, 2019, commercial real estate loans accounted for 32.3%, commercial and industrial accounted for 33.2%, and residential real estate loans, including home equity loans, accounted for 28.4% of total loans.

Commercial real estate loans decreased to $746,703,000 from $750,362,000 on December 31, 2018 primarily as a result of loan payoffs. Commercial and industrial loans increased to $767,436,000 at March 31, 2019 from $761,625,000 at December 31, 2018, primarily as a result of loan originations. Construction loans decreased slightly to $13,305,000 at March 31, 2019 from $13,628,000 on December 31, 2018. Residential real estate loans increased slightly to $349,966,000 on March 31, 2019 from $348,250,000 on December 31, 2018, primarily as a result of new loan originations. Home equity loans increased to $305,839,000 on March 31, 2019 from $292,340,000 at December 31, 2018, primarily as a result of a home equity loan promotion. Municipal loans increased to $105,288,000 from $97,290,000, primarily as a result of new loan originations.

In recent years, 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.

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Allowance for Loan Losses

The allowance for loan loss at March 31, 2019 was $28,848,000 as compared to $28,543,000 at December 31, 2018. The level of the allowance for loan losses to total loans was 1.25% at March 31, 2019 and 1.25% at December 31, 2018. The coverage ratio remained stable. The Company monitors the outlook for the industries in which our borrowers operate. Healthcare and higher education are two of the primary industries. In particular the Company utilizes outlooks and forecasts from various sources. Overall a general weakening for these industries in the outlook was noted resulting in a general increase in the general economic factors. 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 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 March 31, 2019.

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at March 31, 2019 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	482,374	$	62,103	$	41,335	$	585,812
A1 – A3		181,409		7,605		151,031		340,045
Baa1 – Baa3		—		26,970		118,868		145,838
Ba2		—		6,810		—		6,810
Total	$	663,783	$	103,488	$	311,234	$	1,078,505

Credit ratings issued by national organizations are presented in the following table at December 31, 2018.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	491,247	$	54,105	$	42,790	$	588,142
A1 – A3		172,472		7,605		151,381		331,458
Baa1 – Baa3		—		26,970		118,197		145,167
Ba2		—		6,810		—		6,810
Total	$	663,719	$	95,490	$	312,368	$	1,071,577

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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 March 31,
	2019			2018
	(in thousands)
Allowance for loan losses, beginning of period	$	28,543		$	26,255
Loans charged off		(142	)		(87	)
Recoveries on loans previously charged-off		72			77
Net recoveries (charge-offs)		(70	)		(10	)
Provision charged to expense		375			450
Allowance for loan losses, end of period	$	28,848		$	26,695

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.

Nonperforming Assets

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

	March 31, 2019			December 31, 2018
	(dollars in thousands)
Nonaccruing loans	$	1,502		$	1,313
Total nonperforming assets	$	3,727		$	3,538
Loans past due 90 days or more and still accruing	$	—		$	—
Nonaccruing loans as a percentage of total loans		0.07	%		0.06	%
Nonperforming assets as a percentage of total assets		0.07	%		0.07	%
Accruing troubled debt restructures	$	2,542		$	2,559

The increase in nonperforming assets and loans 90 days past due or more and still accruing is primarily the result of residential loans.

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 $345,089,000 at March 31, 2019, an increase of 2.5% from December 31, 2018. The portfolio increased mainly as a result of purchases of securities available-for-sale totaling $43,884,000 for the three months ended March 31, 2019. The purchases include $9,853,000 of purchases that are due to brokers. They were offset, somewhat, by calls/maturities, sales and scheduled principal payments of $34,927,000. 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 5.2 years.

At March 31, 2019, 81.6% 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.

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Securities available-for-sale totaling $63,332,000 or 18.4% of securities available-for-sale are classified as Level 3. These securities are generally municipal securities with no observable fair value with an average life of one year or less. 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 three months of 2019, net unrealized loss on the securities available-for-sale increased to $620,000 from a net unrealized gain of $8,000 at December 31, 2018. This was primarily the result of a decrease in the value of floating rate securities and the increase in the value of one obligation which was a states and political subdivisions security.

The following table sets forth the fair value of securities available-for-sale at the dates indicated.

	March 31, 2019		December 31, 2018
	(in thousands)
U.S. Treasury	$	1,998	$	1,992
U.S. Government Sponsored Enterprises		3,942		3,915
Small Business Administration		72,588		70,194
U.S Government Agency and Sponsored Enterprise Mortgage-backed Securities		194,205		162,890
Privately Issued Residential Mortgage-backed Securities		649		672
Obligations issued by States and Political Subdivisions		68,107		93,503
Other Debt Securities		3,600		3,593
Total Securities Available-for-Sale	$	345,089	$	336,759

There were no sales of available-for-sale securities for the three months ended March 31, 2019. The Company realized gross gains of $197,000 from the proceeds of $17,871,000 from the sales of available-for-sales securities for the three months ended March 31, 2018.

Securities Held-to-Maturity (at Amortized Cost)

The securities held-to-maturity portfolio totaled $2,110,555,000 on March 31, 2019, an increase of 3.1% from December 31, 2018. Purchases of securities held-to-maturity totaled $148,500,000 for the three months ended March 31, 2019. The purchases were offset somewhat, by call, maturities and scheduled principal payments of $88,027,000. The portfolio is concentrated in United States Government Sponsored Enterprises and Mortgage-backed Securities and had an estimated weighted average remaining life of 4.0 years. Unrealized losses increased during the year primarily as a result of increases in interest rates.

The following table sets forth the amortized cost of securities held-to-maturity at the dates indicated.

	March 31, 2019		December 31, 2018
	(in thousands)
U.S. Treasury	$	—	$	9,960
U.S. Government Sponsored Enterprises		201,327		234,228
SBA Backed Securities		50,797		52,051
U.S. Government Agency and Sponsored Enterprise Mortgage-backed Securities		1,858,431		1,750,408
Total Securities Held-to-Maturity	$	2,110,555	$	2,046,647

There were no sales of held-to-maturity securities for the three months ended March 31, 2019 and March 31, 2018 respectively.

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The net unrealized losses on investment securities held-to-maturity was $36,112,000 or 1.7% of the total and $55,226,000 or 2.7% of the total at March 31, 2019 and December 31, 2018, respectively. The decrease in the net unrealized losses on securities held-to-maturity related primarily to a decrease in interest rates. The gross unrealized losses relate 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 March 31, 2019 and December 31, 2018.

At March 31, 2019 and December 31, 2018, all mortgage-backed securities are obligations of U.S. Government Sponsored Enterprises. 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 three months of 2019, the FHLBB redeemed $4,777,000 of FHLBB stock and the Company purchased $1,047,000 of FHLBB stock. As of March 31, 2019, no impairment has been recognized.

Equity Securities

At March 31, 2019 equity securities totaled $1,649,000 compared to $1,596,000 at December 31, 2018. Equity securities were reclassified from securities available-for-sale during the first quarter of 2018. The unrealized gain, of $29,000 on equity securities, at December 31, 2017, was transferred to retained earnings and the change in the unrealized gain for the first quarter of 2018 was classified as other income, in accordance with ASU 2016-1 as previously discussed in Note 10.

Deposits and Borrowed Funds

On March 31, 2019, deposits totaled $4,449,627,000, representing a 1.0% increase from December 31, 2018. Total deposits increased primarily as a result of an increase in Savings and NOW deposits and money market accounts. This was offset somewhat, by a decrease in demand deposits and time deposits. Money market accounts increased mainly from deposit gathering services. Savings and NOW deposits increased mainly as a result of increased municipal deposits. Time deposits decreased primarily as a result of decreased corporate and personal time deposits. Demand deposits decreased mainly as a result of decreased corporate checking balances.

Borrowed funds totaled $421,648,000 at March 31, 2019 compared to $356,618,000 at December 31, 2018. Borrowed funds increased mainly as a result of an increase in short-term FHLBB borrowings.

Stockholders’ Equity

At March 31, 2019, total equity was $309,324,000 compared to $300,439,000 on December 31, 2018. The Company’s equity increased primarily as a result of earnings, offset, somewhat, by dividends paid. The Company’s leverage ratio stood at 6.92% on March 31, 2019, compared to 6.91% at December 31, 2018. 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 March 31, 2019, was $55.55 as compared to $53.96 on December 31, 2018.

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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
	March 31, 2019									March 31, 2018
	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	$	1,182,782		$	13,096			4.49	%	$	1,043,345		$	10,685			4.15	%
Loans tax-exempt		1,109,824			10,411			3.80	%		1,131,825			9,606			3.44	%
Securities available-for-sale (5):
Taxable		273,309			2,182			3.19	%		338,393			1,754			2.07	%
Tax-exempt		78,560			545			2.77	%		67,694			291			1.72	%
Securities held-to-maturity:
Taxable		2,078,626			13,788			2.65	%		1,741,492			10,288			2.36	%
Interest-bearing deposits in other banks		225,870			1,349			2.39	%		230,194			883			1.53	%
Total interest-earning assets		4,948,971			41,371			3.37	%		4,552,943			33,507			2.97	%
Non interest-earning assets		247,261									228,451
Allowance for loan losses		(28,708	)								(26,546	)
Total assets	$	5,167,524								$	4,754,848
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing deposits:
NOW accounts	$	902,321		$	2,156			0.97	%	$	954,608		$	1,353			0.57	%
Savings accounts		909,798			3,310			1.48	%		540,311			870			0.65	%
Money market accounts		1,271,707			5,343			1.70	%		1,180,436			2,453			0.84	%
Time deposits		516,781			2,793			2.19	%		604,814			2,363			1.58	%
Total interest-bearing deposits		3,600,607			13,602			1.53	%		3,280,169			7,039			0.87	%
Securities sold under agreements to repurchase		168,447			385			0.93	%		160,223			181			0.46	%
Other borrowed funds and subordinated debentures		231,920			1,652			2.89	%		274,343			1,742			2.58	%
Total interest-bearing liabilities		4,000,974			15,639			1.59	%		3,714,735			8,962			0.98	%
Non-interest-bearing liabilities
Demand deposits		782,794									706,959
Other liabilities		79,156									69,218
Total liabilities		4,862,924									4,490,912
Stockholders’ equity		304,600									263,936
Total liabilities & stockholders’ equity	$	5,167,524								$	4,754,848
Net interest income on a fully taxable equivalent basis					25,732									24,545
Less taxable equivalent adjustment					(2,294	)								(2,077	)
Net interest income				$	23,438								$	22,468
Net interest spread (3)								1.79	%								2.00	%
Net interest margin (4)								2.11	%								2.19	%

(1) On a fully taxable equivalent basis calculated using a federal tax rate of 21%.

(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 40 of 44

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 March 31, 2019 Compared with Three Months Ended March 31, 2018
	Increase/(Decrease) Due to Change in
	Volume			Rate			Total
	(in thousands)
Interest income:
Loans
Taxable	$	1,500		$	911		$	2,411
Tax-exempt		(190	)		995			805
Securities available-for-sale
Taxable		(385	)		813			428
Tax-exempt		53			201			254
Securities held-to-maturity
Taxable		2,141			1,359			3,500
Interest-bearing deposits in other banks		(17	)		483			466
Total interest income		3,102			4,762			7,864
Interest expense:
Deposits
NOW accounts		(78	)		881			803
Savings accounts		859			1,581			2,440
Money market accounts		203			2,687			2,890
Time deposits		(380	)		810			430
Total interest-bearing deposits		604			5,959			6,563
Securities sold under agreements to repurchase		10			194			204
Other borrowed funds and subordinated debentures		(288	)		198			(90	)
Total interest expense		326			6,351			6,677
Change in net interest income	$	2,776		$	(1,589	)	$	1,187

Net Interest Income

For the three months ended March 31, 2019, net interest income on a fully taxable equivalent basis totaled $25,732,000 compared to $24,545,000 for the same period in 2018, an increase of $1,187,000 or 4.8%. The increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.19% on a fully taxable equivalent basis in 2018 to 2.11% for the same period in 2019. This was primarily the result of increased rates paid on deposits. The average balances of earning assets increased by 8.7% combined with an average yield increase of 0.40%, resulting in an increase in fully taxable equivalent interest income of $7,864,000. The average balance of interest bearing liabilities increased 7.7% combined with an average cost of funds increase of 0.61%, resulting in an increase in interest expense of $6,677,000.

As illustrated in the table above, the main contributors to the increase in net interest income were from loans, securities held-to-maturity, securities available-for-sale, and interest-bearing deposits in other banks. Securities held-to-maturity income increased primarily as a result of an increase in volume as well as rates. Loan income increased primarily from an increase in volume and an overall increase in rates. 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. Interest-bearing deposits income increased primarily from an increase in rates. The increase in 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.

Page 41 of 44

Provision for Loan Losses

For the three months ended March 31, 2019, the loan loss provision was $375,000 compared to a provision of $450,000 for the same period last year. 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 March 31, 2019 increased by $234,000 from the same period last year to $4,427,000. This was mainly attributable to an increase in lockbox fees of $298,000 and an increase in service charges on deposit accounts of $142,000 offset, somewhat, by a decrease of $197,000 from the sales of securities. Lockbox income increased as a result of an increase in customer accounts. Service charges on deposit accounts increased primarily as a result of an increase in customer activity.

For the quarter ended March 31, 2019, operating expenses increased by $189,000 or 1.0% to $18,190,000, from the same period last year. This was primarily attributable to an increase in other expenses of $336,000 and occupancy expenses of $64,000 offset, somewhat, by decreases salaries and employee benefits of $190,000, equipment expenses $11,000 and FDIC assessments of $10,000. Other expenses increased primarily as a result of increases in pension expense. Occupancy costs increased primarily as a result of increases in rent expense associated with a new operating facility and other annual rent increases. The decrease in salaries and employee benefits was mainly attributable to a decrease in bonus accruals. FDIC assessments decreased primarily as a result of a decrease in the assessment rate. Equipment expenses remained relatively stable.

Income Taxes

For the first quarter of 2019, the Company’s income tax benefit totaled $118,000 on pretax income of $9,300,000 resulting in an effective tax rate of (1.3)%. For last year’s corresponding quarter, the Company’s income tax expense totaled $501,000 on pretax income of $8,210,000 resulting in an effective tax rate of 6.1%. The decrease in the effective tax rate was primarily as a result of a reduction in tax accruals related to sequestration of the refundable portion of our alternative minimum tax (AMT) credit carryforward. On January 14, 2019, the IRS updated its announcement “Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations” to clarify that refundable AMT credits under Section 53(e) of the Internal Revenue Code are not subject to sequestration for taxable years beginning after December 31, 2017. Therefore, the full amount of the AMT credit carryover will be refunded to the Company.

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, 2018, 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 first quarter of 2019 there were no changes that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Page 42 of 44

Part II – Other Information

Item 1 A number of legal claims against the Company arising in the normal course of business were outstanding at March 31, 2019. Management, after reviewing these claims with legal counsel, is of the opinion that their resolution will not have a material adverse effect on the Company’s consolidated financial position or results of operations.

The Company and its subsidiaries are parties to various claims and lawsuits arising in the course of their normal business activities. Although the ultimate outcome of these suits cannot be ascertained at this time, it is the opinion of management that none of these matters, even if it resolved adversely to the Company, will have a material adverse effect on the Company’s consolidated financial position.

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, 2018. 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.

++ 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 March 31 2019, formatted in XBRL: (i) Consolidated Balance Sheets at March 31, 2019 and December 31, 2018; (ii) Consolidated Statements of Income for the three months ended March 31, 2019 and 2018; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2019 and 2018; (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018; 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: May 9, 2019     Century Bancorp, Inc.

/s/ Barry R. Sloane

Barry R. Sloane

Chairman, President and Chief Executive Officer

/s/ William P. Hornby

William P. Hornby, CPA

Chief Financial Officer and Treasurer

(Principal Accounting Officer)

Page 44 of 44

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: May 9, 2019	/s/ Barry R. Sloane
	Barry R. Sloane
	Chairman, 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: May 9, 2019	/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 three months ended March, 31, 2019, 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

Chairman, President and Chief Executive Officer

Date: May 9, 2019

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 three months ended March 31, 2019, 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: May 9, 2019

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	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	CENTURY BANCORP INC
Entity Central Index Key	0000812348
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	CNBKA
Entity Emerging Growth Company	false
Entity Small Business	false
Class A Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		3,610,329
Class B Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,957,580

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 77,121	$ 89,540
Federal funds sold and interest-bearing deposits in other banks	301,240	252,963
Total cash and cash equivalents	378,361	342,503
Securities available-for-sale, amortized cost $345,709 and $336,751, respectively	345,089	336,759
Securities held-to-maturity, fair value $2,074,443 and $1,991,421, respectively	2,110,555	2,046,647
Federal Home Loan Bank of Boston, stock at cost	14,244	17,974
Equity securities, amortized cost $1,635 and $1,635, respectively	1,649	1,596
Loans, net:
Construction And Land Development	13,305	13,628
Commercial and industrial	767,436	761,625
Municipal	105,288	97,290
Commercial real estate	746,703	750,362
Residential real estate	349,966	348,250
Consumer	21,562	21,359
Home equity	305,839	292,340
Overdrafts	561	724
Total loans, net	2,310,660	2,285,578
Less: allowance for loan losses	28,848	28,543
Net loans	2,281,812	2,257,035
Bank premises and equipment	24,494	23,921
Accrued interest receivable	14,464	14,406
Goodwill	2,714	2,714
Other assets	132,684	120,380
Total assets	5,306,066	5,163,935
Deposits:
Demand deposits	764,545	813,478
Savings and NOW deposits	1,783,987	1,707,019
Money market accounts	1,359,016	1,325,888
Time deposits	542,079	560,579
Total deposits	4,449,627	4,406,964
Securities sold under agreements to repurchase	164,500	154,240
Other borrowed funds	257,148	202,378
Subordinated debentures	36,083	36,083
Due to broker	11,740
Other liabilities	77,644	63,831
Total liabilities	4,996,742	4,863,496
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	310,356	301,488
Stockholders' equity before adjustment of accumulated other comprehensive income (loss)	328,216	319,348
Unrealized losses on securities available-for-sale, net of taxes	(456)	6
Unrealized losses on securities transferred to held-to-maturity, net of taxes	(2,349)	(2,565)
Pension liability, net of taxes	(16,087)	(16,350)
Total accumulated other comprehensive loss, net of taxes	(18,892)	(18,909)
Total stockholders' equity	309,324	300,439
Total liabilities and stockholders' equity	5,306,066	5,163,935
Class A Common Stock [Member]
Stockholders' Equity
Common stock value	3,610	3,608
Total stockholders' equity	3,610	3,608
Class B Common Stock [Member]
Stockholders' Equity
Common stock value	1,958	1,960
Total stockholders' equity	$ 1,958	$ 1,960

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Amortized cost	$ 345,709	$ 336,751
Held-to-maturity securities, fair value	2,074,443	1,991,421
Equity securities, amortized cost	$ 1,635	$ 1,635
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	3,610,329	3,608,329
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	1,957,580	1,959,580

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Interest income
Loans	$ 21,309	$ 18,267
Securities held-to-maturity	13,788	10,288
Securities available-for-sale	2,631	1,992
Federal funds sold and interest-bearing deposits in other banks	1,349	883
Total interest income	39,077	31,430
Interest expense
Savings and NOW deposits	5,466	2,223
Money market accounts	5,343	2,453
Time deposits	2,793	2,363
Securities sold under agreements to repurchase	385	181
Other borrowed funds and subordinated debentures	1,652	1,742
Total interest expense	15,639	8,962
Net interest income	23,438	22,468
Provision for loan losses	375	450
Net interest income after provision for loan losses	23,063	22,018
Other operating income
Service charges on deposit accounts	2,209	2,067
Lockbox fees	1,089	791
Net gains on sales of securities		197
Gains on sales of mortgage loans	15
Other income	1,114	1,138
Total other operating income	4,427	4,193
Operating expenses
Salaries and employee benefits	11,035	11,225
Occupancy	1,701	1,637
Equipment	783	794
FDIC assessments	373	383
Other	4,298	3,962
Total operating expenses	18,190	18,001
Income before income taxes	9,300	8,210
(Benefit) provision for income taxes	(118)	501
Net income	$ 9,418	$ 7,709
Class A Common Stock [Member]
Share data:
Weighted average number of shares outstanding, basic	3,610,329	3,608,029
Weighted average number of shares outstanding, diluted	5,567,909	5,567,909
Basic earnings per share	$ 2.05	$ 1.68
Diluted earnings per share	$ 1.69	$ 1.38
Class B Common Stock [Member]
Share data:
Weighted average number of shares outstanding, basic	1,957,580	1,959,880
Weighted average number of shares outstanding, diluted	1,957,580	1,959,880
Basic earnings per share	$ 1.03	$ 0.84
Diluted earnings per share	$ 1.03	$ 0.84

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 9,418	$ 7,709
Unrealized gains (losses) on securities:
Unrealized (losses) gains arising during period	(462)	213
Less: reclassification adjustment for gains included in net income		(142)
Total unrealized (losses) gains on securities	(462)	71
Accretion of net unrealized losses transferred	216	381
Defined benefit pension plans:
Amortization of prior service cost and loss included in net periodic benefit cost	263	293
Other comprehensive income	17	745
Comprehensive income	$ 9,435	$ 8,454

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Consolidated Statements of Changes in Stockholders' Equity - 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 Loss [Member]
Beginning balance at Dec. 31, 2017	$ 260,297	$ 3,606	$ 1,962	$ 12,292	$ 263,666			$ (21,229)
Net income	7,709				7,709
Other comprehensive income, net of tax:
Unrealized holding gains arising during period, net of taxes	71							71
Accretion of net unrealized losses transferred during the period, net of taxes	381							381
Pension liability adjustment, net of taxes	293							293
Adoption of ASU 2018-2, Income Statement-Reporting Comprehensive Income (Topic 220)-Reclassification of Certain Tax Effects from AOCI					3,783			(3,783)
Adoption of ASU 2016-1, Financial Instruments-Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities					29			(29)
Conversion of Class B Common Stock to Class A Common Stock		2	(2)
Cash dividends						$ (434)	$ (117)
Ending balance at Mar. 31, 2018	268,200	3,608	1,960	12,292	274,636			(24,296)
Beginning balance at Dec. 31, 2018	300,439	3,608	1,960	12,292	301,488			(18,909)
Net income	9,418				9,418
Other comprehensive income, net of tax:
Unrealized holding gains arising during period, net of taxes	(462)							(462)
Accretion of net unrealized losses transferred during the period, net of taxes	216							216
Pension liability adjustment, net of taxes	263							263
Conversion of Class B Common Stock to Class A Common Stock		2	(2)
Cash dividends						$ (433)	$ (117)
Ending balance at Mar. 31, 2019	$ 309,324	$ 3,610	$ 1,958	$ 12,292	$ 310,356			$ (18,892)

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Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Unrealized holding gains arising during period, taxes	$ 166	$ 9
Realized net gains		197
Accretion of net unrealized losses transferred during the period, taxes	78	139
Pension liability adjustment, taxes	$ 103	$ 114
Class A Common Stock [Member]
Conversion of Class B Common Stock to Class A Common Stock, shares	2,300	2,200
Cash dividends, per share	$ 0.12	$ 0.12
Class B Common Stock [Member]
Conversion of Class B Common Stock to Class A Common Stock, shares	2,300	2,200
Cash dividends, per share	$ 0.06	$ 0.06

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 9,418	$ 7,709
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sales of mortgage loans	(15)
Net gains on sales of securities		(197)
Net (gain) loss on equity securities	(53)	9
Provision for loan losses	375	450
Deferred income taxes	104	(680)
Net depreciation and amortization	(468)	592
(Increase) decrease in accrued interest receivable	(58)	335
Decrease in other assets	2,187	3,076
(Decrease) increase in other liabilities	(458)	2,926
Net cash provided by operating activities	11,032	14,220
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from redemptions of Federal Home Loan Bank of Boston stock	4,777	3,464
Purchase of Federal Home Loan Bank of Boston stock	(1,047)	(1,735)
Proceeds from calls/maturities of securities available-for-sale	34,927	31,527
Proceeds from sales of securities available-for-sale		17,871
Purchase of securities available-for-sale	(34,031)	(19,336)
Proceeds from calls/maturities of securities held-to-maturity	88,027	59,409
Purchase of securities held-to-maturity	(148,500)	(169,974)
Proceeds from life insurance policies		375
Net increase in loans	(25,811)	(11,198)
Proceeds from sales of portfolio loans	685
Capital expenditures	(1,344)	(508)
Net cash used in investing activities	(82,317)	(90,105)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in time deposits	(18,500)	(9,539)
Net increase in demand, savings, money market and NOW deposits	61,163	28,368
Cash dividends	(550)	(551)
Net increase (decrease) in securities sold under agreements to repurchase	10,260	(17,430)
Net increase (decrease) in other borrowed funds	54,770	(30,724)
Net cash provided by (used in) financing activities	107,143	(29,876)
Net increase (decrease) in cash and cash equivalents	35,858	(105,761)
Cash and cash equivalents at beginning of period	342,503	356,430
Cash and cash equivalents at end of period	378,361	250,669
Cash paid (received) during the period for:
Interest	15,462	9,008
Income taxes	(1,265)	225
Change in unrealized gains (losses) on securities available-for-sale, net of taxes	(462)	71
Change in unrealized losses on securities transferred to held-to-maturity, net of taxes	216	381
Pension liability adjustment, net of taxes	263	293
Change in due to (from) to broker	$ 11,740	$ 10,011

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Basis of Financial Statement Presentation

3 Months Ended

Mar. 31, 2019

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, 2018, 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.

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Recent Accounting Developments

3 Months Ended

Mar. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Developments

Note 2. Recent Accounting Developments

Recently Adopted Accounting Standards Updates

In July 2017, FASB issued 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. The effect of this update did not 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 of 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. The effect of this update did not 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. The Company also reviewed contracts to determine if they contain embedded leases. The Company’s balance sheet impact was $15.1 million as of January 1, 2019. This amount was recorded as a right of use asset with a corresponding lease liability.

In July 2018, ASU 2018-10, “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”) was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Also in July 2018, ASU 2018-11, “Targeted Improvements” (“ASU 2018-11”) was issued and allows for an optional transition method in which the provisions of Topic 842 would be applied upon the adoption date and would not have to be retroactively applied to the earliest reporting period presented in the consolidated financial statements.” The Company used this optional transition method for the adoption of Topic 842.

Accounting Standards Issued but not yet Adopted

The following list identifies ASUs applicable to the Company that have been issued by the FASB but are not yet effective:

In August 2018, FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). This ASU is effective for annual reporting periods beginning after December 15, 2019. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In August 2018, FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit plans. The amendments in this ASU remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. This ASU is effective for annual reporting periods beginning after December 15, 2020. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value. The amendments in this ASU modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. This ASU is effective for annual reporting periods beginning after December 15, 2019. 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. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

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 in the process of analyzing this ASU, has purchased a software solution and is capturing information needed to implement this update. The Company has started to input information and is in the beginning stages of running the software program. The Company has not determined the impact, if any, as of March 31, 2019.

Securities and Exchange Commission (SEC) ruling:

In August 2018, the SEC issued a final rule that amends certain of the Commission’s disclosure requirements “that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, U.S. GAAP, or changes in the information environment.” The financial reporting implications of the final rule’s amendments may vary by company, but the changes are generally expected to reduce or eliminate some of an SEC registrant’s disclosure requirements. In limited circumstances, however, the amendments may expand those requirements, including those related to interim disclosures about changes in stockholders’ equity. Under the requirements, registrants must now analyze changes in stockholders’ equity, in the form of a reconciliation, for “the current and comparative year-to-date periods, with subtotals for each interim period.” Beginning with its March 31, 2019 filing, the Company included a reconciliation for the current quarter and year-to-date interim periods as well as the comparative periods of the prior years (i.e., a reconciliation covering each period for which an income statement is presented).

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Securities Available-for-Sale

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Securities Available-for-Sale

Note 3. Securities Available-for-Sale

	March 31, 2019								December 31, 2018
	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	$	2,000	$	—	$	2	$	1,998	$	2,000	$	—	$	8	$	1,992
U.S. Government Sponsored Enterprises		3,950		—		8		3,942		3,946		—		31		3,915
SBA Backed Securities		72,906		—		318		72,588		70,477		1		284		70,194
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		194,549		228		572		194,205		162,604		536		250		162,890
Privately Issued Residential Mortgage-Backed Securities		653		4		8		649		679		3		10		672
Obligations Issued by States and Political Subdivisions		68,051		56		—		68,107		93,445		58		—		93,503
Other Debt Securities		3,600		41		41		3,600		3,600		37		44		3,593
Total	$	345,709	$	329	$	949	$	345,089	$	336,751	$	635	$	627	$	336,759

Included in SBA Backed Securities, 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 $188,887,000 and $197,304,000 at March 31, 2109 and December 31, 2018, 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 $35,852,000 and $34,787,000 at March 31, 2019 and December 31, 2018, respectively. There were no sales of available-for-sale securities for the three months ended March 31, 2019. The Company realized gross gains of $197,000 from the proceeds of $17,871,000 from the sales of available-for-sale securities for the three months ended March 31, 2018.

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 March 31, 2019.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	66,419	$	66,413
After one but within five years		101,922		101,815
After five but within ten years		133,284		132,854
More than 10 years		44,084		44,007
Total	$	345,709	$	345,089

The weighted average remaining life of investment securities available-for-sale at March 31, 2019 was 5.2 years. Included in the weighted average remaining life calculation at March 31, 2019 were $3,950,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The contractual maturities, which were used in the table above, of mortgage-backed securities, will differ from the actual maturities, due to the ability of the issuers to prepay underlying obligations. Also $273,776,000 of the securities are floating rate or adjustable rate and reprice prior to maturity.

As of March 31, 2019 and December 31, 2018, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not more likely than not that it will be required to sell these debt securities before the anticipated recovery of its remaining amortized cost. In making its other-than-temporary impairment evaluation, the Company considered that the principal and interest on these securities are from issuers that are investment grade. The change in the unrealized losses on the Obligations Issued by States and Political Subdivisions, Privately Issued Residential Mortgage-Backed Securities and Other Debt Securities was primarily caused by changes in credit spreads and liquidity issues in the marketplace.

The unrealized loss on SBA Backed Securities, U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities related primarily to interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019 or December 31, 2018.

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.

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at March 31, 2019. 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 21 and 31 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 183 holdings at March 31, 2019.

	March 31, 2019
	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	$	—	$	—	$	1,998	$	2	$	1,998	$	2
U.S. Government Sponsored Enterprises		—		—		3,942		8		3,942		8
SBA Backed Securities		19,409		40		53,180		278		72,589		318
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		70,530		278		43,656		294		114,186		572
Privately Issued Residential Mortgage-Backed Securities		—		—		479		8		479		8
Obligations Issued by States and Political Subdivisions		—		—		—		—		—		—
Other Debt Securities		—		—		459		41		459		41
Total temporarily impaired securities	$	89,939	$	318	$	103,714	$	631	$	193,653	$	949

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at December 31, 2018. 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 30 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 190 holdings at December 31, 2018.

	December 31, 2018
	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	$	—	$	—	$	1,992	$	8	$	1,992	$	8
U.S. Government Sponsored Enterprises		3,914		31		—		—		3,914		31
SBA Backed Securities		17,950		28		44,323		256		62,273		284
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		19,244		21		45,782		229		65,026		250
Privately Issued Residential Mortgage-Backed Securities		—		—		495		10		495		10
Obligations Issued by States and Political Subdivisions		—		—		—		—		—		—
Other Debt Securities		—		—		455		44		455		44
Total temporarily impaired securities	$	41,108	$	80	$	93,047	$	547	$	134,155	$	627

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Investment Securities Held-to-Maturity

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Investment Securities Held-to-Maturity

Note 4. Investment Securities Held-to-Maturity

	March 31, 2019								December 31, 2018
	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. Treasury	$	—	$	—	$	—	$	—	$	9,960	$	—	$	2	$	9,958
U.S. Government Sponsored Enterprises		201,327		453		417		201,363		234,228		336		803		233,761
SBA Backed Securities		50,797		—		1,295		49,502		52,051		—		2,065		49,986
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities		1,858,431		5,306		40,159		1,823,578		1,750,408		2,324		55,016		1,697,716
Total	$	2,110,555	$	5,759	$	41,871	$	2,074,443	$	2,046,647	$	2,660	$	57,886	$	1,991,421

Included in U.S. Government and Agency Securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $1,499,836,000 and $1,441,059,000 at March 31, 2019 and December 31, 2018, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank of Boston at fair value amounting to $305,776,000 and $291,190,000 at March 31, 2019 and December 31, 2018, respectively. There were no sales of held-to-maturity securities for the three months ended March 31, 2019 and March 31, 2018 respectively.

At March 31, 2019 and December 31, 2018, 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 March 31, 2019.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	37,216	$	37,070
After one but within five years		1,723,841		1,696,173
After five but within ten years		336,847		328,635
More than ten years		12,651		12,565
Total	$	2,110,555	$	2,074,443

The weighted average remaining life of investment securities held-to-maturity at March 31, 2019 was 4.0 years. Included in the weighted average remaining life calculation at March 31, 2019 were $116,160,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The contractual maturities, which were used in the table above, of mortgage-backed securities, will differ from the actual maturities, due to the ability of the issuers to prepay underlying obligations. Also $120,000 of the securities are floating rate or adjustable rate and reprice prior to maturity.

As of March 31, 2019 and December 31, 2018, 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 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 Sponsored Enterprises 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 more likely than not 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 at March 31, 2019 or December 31, 2018.

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 March 31, 2019. 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 12 and 304 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 487 holdings at March 31, 2019.

	March 31, 2019
	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	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government Sponsored Enterprises		—		—		74,876		417		74,876		417
SBA Backed Securities		—		—		49,502		1,295		49,502		1,295
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		59,831		439		1,237,048		39,720		1,296,879		40,159
Total temporarily impaired securities	$	59,831	$	439	$	1,361,426	$	41,432	$	1,421,257	$	41,871

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at December 31, 2018. 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 56 and 315 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 475 holdings at December 31, 2018.

	December 31, 2018
	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	$	9,958	$	2	$	—	$	—	$	9,958	$	2
U.S. Government Sponsored Enterprises		9,849		42		69,499		761		79,348		803
SBA Backed Securities		—		—		49,987		2,065		49,987		2,065
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		188,125		2,032		1,249,689		52,984		1,437,814		55,016
Total temporarily impaired securities	$	207,932	$	2,076	$	1,369,175	$	55,810	$	1,577,107	$	57,886

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Allowance for Loan Losses

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Allowance for Loan Losses

Note 5. 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 March 31,
	2019			2018
	(in thousands)
Allowance for loan losses, beginning of period	$	28,543		$	26,255
Loans charged off		(142	)		(87	)
Recoveries on loans previously charged-off		72			77
Net charge-offs		(70	)		(10	)
Provision charged to expense		375			450
Allowance for loan losses, end of period	$	28,848		$	26,695

Further information pertaining to the allowance for loan losses for the three months ending March 31, 2019 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, 2018	$	1,092		$	10,998		$	1,838	$	10,663	$	2,190		$	365		$	1,111		$	286	$	28,543
Charge-offs		—			(43	)		—		—		—			(99	)		—			—		(142	)
Recoveries		—			18			—		—		—			54			—			—		72
Provision		(81	)		183			160		104		(55	)		22			(10	)		52		375
Ending balance at March 31, 2019	$	1,011		$	11,156		$	1,998	$	10,767	$	2,135		$	342		$	1,101		$	338	$	28,848
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	6		$	—	$	94	$	—		$	—		$	—		$	—	$	100
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,011		$	11,150		$	1,998	$	10,673	$	2,135		$	342		$	1,101		$	338	$	28,748
Loans:
Ending balance	$	13,305		$	767,436		$	105,288	$	746,703	$	349,966		$	22,123		$	305,839		$	—	$	2,310,660
Loans deemed to be impaired	$	—		$	320		$	—	$	2,946	$	—		$	—		$	—		$	—	$	3,266
Loans not deemed to be impaired	$	13,305		$	767,116		$	105,288	$	743,757	$	349,966		$	22,123		$	305,839		$	—	$	2,307,394

Further information pertaining to the allowance for loan losses for the three months ending March 31, 2018 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, 2107	$	1,645		$	9,651		$	1,720	$	9,728	$	1,873	$	373		$	989	$	276		$	26,255
Charge-offs		—			(5	)		—		—		—		(82	)		—		—			(87	)
Recoveries		—			23			—		—		—		54			—		—			77
Provision		(207	)		(5	)		—		59		586		(24	)		78		(37	)		450
Ending balance at March 31, 2018	$	1,438		$	9,664		$	1,720	$	9,787	$	2,459	$	321		$	1,067	$	239		$	26,695
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	12		$	—	$	94	$	580	$	—		$	—	$	—		$	686
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,438		$	9,652		$	1,720	$	9,693	$	1,879	$	321		$	1,067	$	239		$	26,009
Loans:
Ending balance	$	17,583		$	758,621		$	104,044	$	726,440	$	300,941	$	19,339		$	260,179	$	—		$	2,187,147
Loans deemed to be impaired	$	—		$	522		$	—	$	2,528	$	2,774	$	—		$	—	$	—		$	5,824
Loans not deemed to be impaired	$	17,583		$	758,099		$	104,044	$	723,912	$	298,167	$	19,339		$	260,179	$	—		$	2,181,323

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 March 31, 2019 and December 31, 2018.

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 March 31, 2019 and December 31, 2018.

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 March 31, 2019 and December 31, 2018 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 March 31, 2019.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	13,305	$	762,991	$	105,288	$	719,367
4 (Monitor)		—		4,125		—		24,390
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		320		—		2,946
Total	$	13,305	$	767,436	$	105,288	$	746,703

The following table presents the Company’s loans by risk rating at December 31, 2018.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	13,628	$	757,089	$	97,290	$	723,170
4 (Monitor)		—		4,135		—		24,542
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		401		—		2,650
Total	$	13,628	$	761,625	$	97,290	$	750,362

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at March 31, 2019 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	482,374	$	62,103	$	41,335	$	585,812
A1 – A3		181,409		7,605		151,031		340,045
Baa1 – Baa3		—		26,970		118,868		145,838
Ba2		—		6,810		—		6,810
Total	$	663,783	$	103,488	$	311,234	$	1,078,505

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2018.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	491,247	$	54,105	$	42,790	$	588,142
A1 – A3		172,472		7,605		151,381		331,458
Baa1 – Baa3		—		26,970		118,197		145,167
Ba2		—		6,810		—		6,810
Total	$	663,719	$	95,490	$	312,368	$	1,071,577

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.

	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	$	—	$	—	$	—	$	—	$	13,305	$	13,305
Commercial and industrial		138		31		—		169		767,267		767,436
Municipal		—		—		—		—		105,288		105,288
Commercial real estate		422		182		—		604		746,099		746,703
Residential real estate		2,202		119		—		2,321		347,645		349,966
Consumer and overdrafts		2		6		—		8		22,115		22,123
Home equity		1,659		1,164		—		2,823		303,016		305,839
Total	$	4,423	$	1,502	$	—	$	5,925	$	2,304,735	$	2,310,660

Further information pertaining to the allowance for loan losses at December 31, 2018 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	$	—	$	—	$	—	$	—	$	13,628	$	13,628
Commercial and industrial		187		115		—		302		761,323		761,625
Municipal		—		—		—		—		97,290		97,290
Commercial real estate		774		190		—		964		749,398		750,362
Residential real estate		2,554		569		—		3,123		345,127		348,250
Consumer and overdrafts		24		14		—		38		22,045		22,083
Home equity		1,108		425		—		1,533		290,807		292,340
Total	$	4,647	$	1,313	$	—	$	5,960	$	2,279,618	$	2,285,578

Impaired loans

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, 2018.

The following is information pertaining to impaired loans for March 31, 2019:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 3/31/19		Interest Income Recognized for 3 Months Ending 3/31/19
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		93		306		—		87		2
Municipal		—		—		—		—		—
Commercial real estate		182		206		—		188		—
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	275	$	512	$	—	$	275	$	2
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		227		228		6		262		3
Municipal		—		—		—		—		—
Commercial real estate		2,764		2,881		94		2,694		24
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	2,991	$	3,109	$	100	$	2,956	$	27
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		320		534		6		349		5
Municipal		—		—		—		—		—
Commercial real estate		2,946		3,087		94		2,882		24
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	3,266	$	3,621	$	100	$	3,231	$	29

The following is information pertaining to impaired loans for December 31, 2018:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 3/31/18		Interest Income Recognized for 3 Months Ending 3/31/18
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		87		291		—		49		—
Municipal		—		—		—		—		—
Commercial real estate		189		212		—		265		—
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	276	$	503	$	—	$	314	$	—
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		314		315		54		388		5
Municipal		—		—		—		—		—
Commercial real estate		2,461		2,575		91		2,278		23
Residential real estate		—		—		—		3,827		6
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	2,775	$	2,890	$	145	$	6,493	$	34
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		401		606		54		437		5
Municipal		—		—		—		—		—
Commercial real estate		2,650		2,787		91		2,543		23
Residential real estate		—		—		—		3,827		6
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	3,051	$	3,393	$	145	$	6,807	$	34

Troubled debt restructurings are identified as a modification in which a concession was granted to a customer who was having financial difficulties. This concession may be below market rate, longer amortization/term, or a lower payment amount. The present value calculation of the modification did not result in an increase in the allowance for these loans beyond any previously established allocations.

There was no troubled debt restructuring that occurred during the three month period ended March 31, 2019. Also, there were no commitments to lend additional funds to troubled debt restructuring borrowers. There were no troubled debt restructurings that subsequently defaulted during the first three months of 2019.

There was one residential real estate loan and one consumer loan that were modified during the first quarter of 2018. The loans were modified by reducing the interest rates as well as extending the terms on both loans. The pre-modification and post-modification outstanding recorded investment was $2,675,000 for the residential real estate loan that was not accruing interest and had a specific reserve of $575,000. The pre-modification and post-modification outstanding recorded investment was $17,000 for the consumer loan that was accruing and had a specific reserve of $1,000. The financial impact for the modifications was not material. There were no troubled debt restructurings that subsequently defaulted during the first three months of 2018.

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Reclassifications Out of Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Reclassifications Out of Accumulated Other Comprehensive Income

Note 6. 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 March 31, 2019			Three Months Ended March 31, 2018			Affected Line Item in the Statement where Net Income is Presented
(in thousands)
Unrealized gains and losses on available-for-sale securities	$	—		$	197			Net gains on sales of investments
Tax (expense) or benefit		—			(55	)		Provision for income taxes
Net of tax	$	—		$	142			Net income
Accretion of unrealized losses transferred	$	(294	)	$	(520	)		Interest on securities held-to-maturity
Tax (expense) or benefit		78			139			Provision for income taxes
Net of tax	$	(216	)	$	(381	)		Net income
Amortization of defined benefit pension items
Prior-service costs	$	(29	) (b)	$	(4	) (b)		Salaries and employee benefits
Actuarial gains (losses)		(337	) (b)		(403	) (b)		Salaries and employee benefits
Total before tax		(366	)		(407	)		Income before taxes
Tax (expense) or benefit		103			114			Provision for income taxes
Net of tax	$	(263	)	$	(293	)		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")

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings per share ("EPS")

Note 7. 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 March 31, 2019 and 2018.

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

	Three Months Ended March 31,
(in thousands except share and per share data)	2019		2018
Basic EPS Computation:
Numerator:
Net income, Class A	$	7,409	$	6,062
Net income, Class B		2,009		1,647
Denominator:
Weighted average shares outstanding, Class A		3,610,329		3,608,029
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Basic EPS, Class A	$	2.05	$	1.68
Basic EPS, Class B		1.03		0.84
Diluted EPS Computation:
Numerator:
Net income, Class A	$	7,409	$	6,062
Net income, Class B		2,009		1,647
Total net income, for diluted EPS, Class A computation		9,418		7,709
Denominator:
Weighted average shares outstanding, basic, Class A		3,610,329		3,608,029
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Weighted average shares outstanding diluted, Class A		5,567,909		5,567,909
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Diluted EPS, Class A	$	1.69	$	1.38
Diluted EPS, Class B		1.03		0.84

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Employee Benefits

3 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Employee Benefits

Note 8. 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 March 31,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2019			2018			2019		2018
	(in thousands)
Service cost	$	276		$	353		$	256	$	277
Interest		473			370			482		346
Expected return on plan assets		(819	)		(954	)		—		—
Recognized prior service cost (benefit)		—			(25	)		28		29
Recognized net actuarial losses		229			227			109		176
Net periodic benefit (credit) cost	$	159		$	(29	)	$	875	$	828

Approximately $502,000 and $169,000 of costs other than service costs, from the table above, are included in other expenses for the three months ended March 31, 2019 and 2018, respectively.

Contributions

The Company does not intend to contribute to the Defined Benefit Pension Plan in 2019.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 9. Fair Value Measurements

The Company follows FASB ASC 820-10, Fair Value Measurements and Disclosures and ASU 2016-1, “Financial Instruments-Overall” (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities, 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, municipal bonds, and OTC derivatives.

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, as well as certain highly structured OTC derivative contracts.

The results of the fair value hierarchy as of March 31, 2019, 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	$	1,998	$	—	$	1,998	$	—
U.S. Government Sponsored Enterprises		3,942		—		3,942		—
SBA Backed Securities		72,588		—		72,588		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		194,205		—		194,205		—
Privately Issued Residential Mortgage-Backed Securities		649		—		649		—
Obligations Issued by States and Political Subdivisions		68,107		—		4,775		63,332
Other Debt Securities		3,600		—		3,600		—
Total	$	345,089	$	—	$	281,757	$	63,332
Other Real Estate Owned	$	2,225	$	—	$	—	$	2,225
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	$	1,649	$	328	$	1,321	$	—
Financial Instruments Measured at Fair Value on a Non-recurring Basis Impaired Loans	$	195	$	—	$	—	$	195

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 (credits) provisions relate to impaired loans recognized for the three month period ended March 31, 2019 amounted to ($2,000).

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)	$	63,332	Discounted cash flow	Discount rate		2.1%-3.8% (3)
Other Real Estate Owned	$	2,225	Appraisal of collateral (1)	Appraisal adjustments (2)		30% discount
Impaired Loans	$	195	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.

The changes in Level 3 securities for the three month period ended March 31, 2019 are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Total
	(in thousands)
Balance at December 31, 2018	$	—	$	88,728		$	88,728
Purchases		—		970			970
Maturities and calls		—		(26,352	)		(26,352	)
Amortization		—		(14	)		(14	)
Changes in fair value		—		—			—
Balance at March 31, 2019	$	—	$	63,332		$	63,332

The amortized cost of Level 3 securities was $63,332,000 at March 31, 2019 with an unrealized loss of $0. The securities in this category are generally municipal securities with no readily determinable fair value. Management evaluated the fair value of these securities based on an evaluation of the underlying issuer, prevailing rates and market liquidity. There was no change in the fair value of other real estate owned for the first three months of 2019. The fair value of impaired loans decreased by $56,000, for the first three months of 2019, mainly as a result of a charge-off of one loan. There were no liabilities measured at fair value on a recurring or nonrecurring basis during the three month period ended March 31, 2019.

	Auction Rate Securities			Obligations Issued by States & Political Subdivisions			Total
	(in thousands)
Balance at December 31, 2017	$	4,459		$	78,141		$	82,600
Purchases		—			20,416			20,416
Maturities and calls		—			(22,068	)		(22,068	)
Transfer to Level 2		(4,459	)		—			(4,459	)
Amortization		—			(24	)		(24	)
Changes in fair value		—			—			—
Balance at March 31, 2018	$	—		$	76,465		$	76,465

The amortized cost of Level 3 securities was $76,465,000 at March 31, 2018 with an unrealized loss of $0. 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 results of the fair value hierarchy as of December 31, 2018, 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	$	1,992	$	—	$	1,992	$	—
U.S. Government Sponsored Enterprises		3,915		—		3,915		—
SBA Backed Securities		70,194		—		70,194		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		162,890		—		162,890		—
Privately Issued Residential Mortgage-Backed Securities		672		—		672		—
Obligations Issued by States and Political Subdivisions		93,503		—		4,775		88,728
Other Debt Securities		3,593				3,593
Total	$	336,759	$	—	$	248,031	$	88,728
Other Real Estate Owned	$	2,225	$	—	$	—	$	2,225
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	$	1,596	$	293	$	1,303	$	—
Financial Instruments Measured at Fair Value on a Non-recurring Basis Impaired Loans	$	251	$	—	$	—	$	251

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 relate to impaired loans recognized for 2018 for the estimated credit loss amounted to $540,000.

There was a transfer of an auction rate security during 2018 from level 3 to level 2. Quoted prices on the auction rate security became available but traded infrequently. There were no other transfers between level 1, 2 and 3 for the year ended December 31, 2018. There were no liabilities measured at fair value on a recurring or nonrecurring basis during the year ended December 31, 2018.

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)	$	88,728		Discounted cash flow		Discount rate		2.1%-4.1% (3)
Other Real Estate Owned	$	2,225		Appraisal of collateral (1)		Appraisal adjustments (2)		30% discount
Impaired Loans	$	251		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.

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Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2019

Investments, All Other Investments [Abstract]

Fair Values of Financial Instruments

Note 10. 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 non-financial 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

The fair value of loans is estimated using the exit price notion consistent with Topic 820, Fair Value Measurement. Fair value is determined based on a discounted cash flow analysis. The discounted cash flow analysis was based on the contractual maturity of the loan and market indications of rates, prepayment speeds, defaults and credit risk. For certain non-performing assets fair value is determined based on the estimated values of the underlying collateral of individual analysis of receipts.

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 March 31, 2019 and December 31, 2018. 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.

March 31, 2019	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	$	2,110,555	$	2,074,443	$	—	$	2,074,443	$	—
Loans (1)		2,310,660		2,321,747		—		—		2,321,747
Financial liabilities:
Time deposits		542,079		542,733		—		542,733		—
Other borrowed funds		257,148		259,045		—		259,045		—
Subordinated debentures		36,083		36,083		—		36,083		—
December 31, 2018
Financial assets:
Securities held-to-maturity	$	2,046,647	$	1,991,421	$	—	$	1,991,421	$	—
Loans (1)		2,257,035		2,279,712		—		—		2,279,712
Financial liabilities:
Time deposits		560,579		559,988		—		559,988		—
Other borrowed funds		202,378		203,122		—		203,122		—
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.

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the type of financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Bank’s entire holdings of a particular financial instrument. Because no active market exists for some of the Bank’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, cash flows, current economic conditions, risk characteristics and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions and changes in the loan, debt and interest rate markets could significantly affect the estimates. Further, the income tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on the fair value estimates and have not been considered.

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Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Note 11. Revenue from Contracts with Customers

Revenue from contracts with customers in the scope of ASC Topic 606 is measured based on the consideration specified in the contract with a customer, and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations.

The Company’s performance obligations are typically satisfied as services are rendered, and our contracts do not include multiple performance obligations. Payment is generally collected at the time services are rendered, or monthly. Unsatisfied performance obligations at the report date are not material to our consolidated financial statements.

The Company pays sales commissions to its employees in accordance with certain incentive plans. The Company expenses sales commissions when incurred if we do not expect to recover these costs from the terms of the contract with the customer. Sales commissions are included in compensation expense.

In certain cases, other parties are involved with providing products and services to our customers. If the Company is a principal in the transaction (providing goods or services itself), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (arranging for another party to provide goods or services), the Company reports its net fee or commission retained as revenue.  

Waivers and reversals are recorded as a reduction of revenue either when the revenue is recognized by the Company or at the time the waiver or reversal is earned by the customer.

A. Change in accounting policy

The Company adopted Topic 606 Revenue from Contracts with Customers with a date of initial application of January 1, 2018 through the first quarter of 2019 and has applied the guidance to all contracts within the scope of Topic 606 as of that date. As a result, the Company has changed its accounting policy for revenue recognition as detailed in this footnote.

The Company applied Topic 606 using the cumulative effect method. There was no cumulative effect adjustment as of January 1, 2018, and there were no material changes to the financial statements at or for the three months ended March 31, 2018 and March 31, 2019, respectively, as a result of adopting Topic 606.

B. Practical Expedients

The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

The Company applies the practical expedient in paragraph 606-10-32-18 and does not adjust the consideration from customers for the effects of a significant financing component if at contract inception the period between when the entity transfers the goods or services and when the customer pays for that good or service will be one year or less.

C. Nature of goods and services

The vast majority of the Company’s revenue is specifically out-of-scope of Topic 606. For the revenue in-scope, the following is a description of principal activities, separated by the timing of revenue recognition, from which the Company generates its revenue from contracts with customers.

a. Revenue earned at a point in time – Examples of revenue earned at a point in time are ATM transaction fees, wire transfer fees, NSF fees, credit and debit card interchange fees and foreign exchange transaction fees. Revenue is generally derived from transactional information accumulated by our systems and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction. The Company is the principal in each of these contracts, with the exception of credit and debit card interchange fees, in which case we are acting as the agent and record revenue net of expenses paid to the principal.

b. Revenue earned over time – The Company earns revenue from contracts with customers in a variety of ways in which the revenue is earned over a period of time – generally monthly or quarterly. Examples of this type of revenue are deposit account service fees, lockbox fees, investment management fees, merchant referral services, and safe deposit box fees. Account service charges, management fees and referral fees are recognized on a monthly basis while any transaction based income is recorded as the activity occurs. Revenue is primarily based on the number and type of transactions or assets managed and is generally derived from transactional information accumulated by our systems. Revenue is recorded in the same period as the related transactions occur or services are rendered to the customer.

D. Disaggregation of revenue

The following table presents total revenues as presented in the Consolidated Statements of Income and the related amounts which are from contracts with customers within the scope of Topic 606. As illustrated here, the vast majority of our revenues are specifically excluded from the scope of Topic 606.

	Three Months Ended 3/31/2019		Revenue from Contracts in Scope of Topic 606		Three Months Ended 3/31/2018		Revenue from Contracts in Scope of Topic 606
	(dollars in thousands)
Total net interest income	$	23,438	$	—	$	22,468	$	—
Noninterest income:
Service charges on deposit accounts		2,209		2,209		2,067		2,067
Lockbox fees		1,089		1,089		791		791
Net gains on sales of securities		—		—		197		—
Gains on sales of mortgage loans		15		—		—		—
Other income		1,114		800		1,138		719
Total noninterest income		4,427		4,098		4,193		3,577
Total revenues	$	27,865	$	4,098	$	26,661	$	3,577

The following table provides information about receivables with customers.

(dollars in thousands)	March 31, 2019		December 31, 2018
Receivables, which are included in “Other assets”	$	1,343	$	1,205

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

Note 12. Leases

The Company has operating leases primarily for branch locations as well as data processing centers. The Company’s operating leases have remaining lease terms of 1 year to 32 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. The Company also has one sublease for part of a data processing center that the Company currently leases from a lessor. The sublease expires in 2021 with an option to terminate and no option to extend. Lease income, for the sublease, totaled approximately $10,000 for the three months ended March 31, 2019.

The components of lease expense were as follows:

	Three Months Ended 3/31/2019
(in thousands)
Operating lease costs including variable costs	$	711

Supplemental cash flow information related to leases was as follows:

	Three Months Ended 3/31/2019
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	538
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	443

Supplemental balance sheet information related to leases was as follows:

	3/31/2019
(in thousands, except lease term and discount rate)
Operating Leases:
Operating lease right-of-use assets, included in other assets	$	14,496
Operating lease liabilities, included in other liabilities	$	14,637
Weighted Average Remaining Lease Term:
Operating Leases		11 Years
Weighted Average Discount Rate:
Operating Leases		3.45	%

Maturities of lease liabilities were as follows:

	Operating Leases
(in thousands)
Year Ending December 31,
2019 (excluding the three months ended March 31, 2019)	$	1,632
2020		2,120
2021		1,841
2022		1,709
2023		1,671
Thereafter		8,949
Total lease payments		17,922
Less imputed interest		(3,285	)
Total lease payments	$	14,637

As of March 31, 2019, we have an additional operating lease with total undiscounted cash payments of $144,000, for a data center, that has not yet commenced. This operating lease will commence in April 2019 with a lease term of 3 years.

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Recent Accounting Developments (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Developments

Recent Accounting Developments

Recently Adopted Accounting Standards Updates

In July 2017, FASB issued 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. The effect of this update did not 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 of 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. The effect of this update did not 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. The Company also reviewed contracts to determine if they contain embedded leases. The Company’s balance sheet impact was $15.1 million as of January 1, 2019. This amount was recorded as a right of use asset with a corresponding lease liability.

In July 2018, ASU 2018-10, “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”) was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Also in July 2018, ASU 2018-11, “Targeted Improvements” (“ASU 2018-11”) was issued and allows for an optional transition method in which the provisions of Topic 842 would be applied upon the adoption date and would not have to be retroactively applied to the earliest reporting period presented in the consolidated financial statements.” The Company used this optional transition method for the adoption of Topic 842.

Accounting Standards Issued but not yet Adopted

The following list identifies ASUs applicable to the Company that have been issued by the FASB but are not yet effective:

In August 2018, FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). This ASU is effective for annual reporting periods beginning after December 15, 2019. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In August 2018, FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit plans. The amendments in this ASU remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. This ASU is effective for annual reporting periods beginning after December 15, 2020. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value. The amendments in this ASU modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. This ASU is effective for annual reporting periods beginning after December 15, 2019. 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. The effect of this update is not expected to have a material impact on the Company’s consolidated financial position.

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 in the process of analyzing this ASU, has purchased a software solution and is capturing information needed to implement this update. The Company has started to input information and is in the beginning stages of running the software program. The Company has not determined the impact, if any, as of March 31, 2019.

Securities and Exchange Commission (SEC) ruling:

In August 2018, the SEC issued a final rule that amends certain of the Commission’s disclosure requirements “that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, U.S. GAAP, or changes in the information environment.” The financial reporting implications of the final rule’s amendments may vary by company, but the changes are generally expected to reduce or eliminate some of an SEC registrant’s disclosure requirements. In limited circumstances, however, the amendments may expand those requirements, including those related to interim disclosures about changes in stockholders’ equity. Under the requirements, registrants must now analyze changes in stockholders’ equity, in the form of a reconciliation, for “the current and comparative year-to-date periods, with subtotals for each interim period.” Beginning with its March 31, 2019 filing, the Company included a reconciliation for the current quarter and year-to-date interim periods as well as the comparative periods of the prior years (i.e., a reconciliation covering each period for which an income statement is presented).

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Securities Available-for-Sale (Tables)

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Summary of Securities Available-for-Sale

	March 31, 2019								December 31, 2018
	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	$	2,000	$	—	$	2	$	1,998	$	2,000	$	—	$	8	$	1,992
U.S. Government Sponsored Enterprises		3,950		—		8		3,942		3,946		—		31		3,915
SBA Backed Securities		72,906		—		318		72,588		70,477		1		284		70,194
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		194,549		228		572		194,205		162,604		536		250		162,890
Privately Issued Residential Mortgage-Backed Securities		653		4		8		649		679		3		10		672
Obligations Issued by States and Political Subdivisions		68,051		56		—		68,107		93,445		58		—		93,503
Other Debt Securities		3,600		41		41		3,600		3,600		37		44		3,593
Total	$	345,709	$	329	$	949	$	345,089	$	336,751	$	635	$	627	$	336,759

Estimated Maturity Distribution of Securities Available-for-Sale

The following table shows the maturity distribution of the Company’s securities available-for-sale at March 31, 2019.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	66,419	$	66,413
After one but within five years		101,922		101,815
After five but within ten years		133,284		132,854
More than 10 years		44,084		44,007
Total	$	345,709	$	345,089

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

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at March 31, 2019. 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 21 and 31 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 183 holdings at March 31, 2019.

	March 31, 2019
	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	$	—	$	—	$	1,998	$	2	$	1,998	$	2
U.S. Government Sponsored Enterprises		—		—		3,942		8		3,942		8
SBA Backed Securities		19,409		40		53,180		278		72,589		318
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		70,530		278		43,656		294		114,186		572
Privately Issued Residential Mortgage-Backed Securities		—		—		479		8		479		8
Obligations Issued by States and Political Subdivisions		—		—		—		—		—		—
Other Debt Securities		—		—		459		41		459		41
Total temporarily impaired securities	$	89,939	$	318	$	103,714	$	631	$	193,653	$	949

The following table shows the temporarily impaired securities of the Company’s available-for-sale portfolio at December 31, 2018. 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 30 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 190 holdings at December 31, 2018.

	December 31, 2018
	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	$	—	$	—	$	1,992	$	8	$	1,992	$	8
U.S. Government Sponsored Enterprises		3,914		31		—		—		3,914		31
SBA Backed Securities		17,950		28		44,323		256		62,273		284
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		19,244		21		45,782		229		65,026		250
Privately Issued Residential Mortgage-Backed Securities		—		—		495		10		495		10
Obligations Issued by States and Political Subdivisions		—		—		—		—		—		—
Other Debt Securities		—		—		455		44		455		44
Total temporarily impaired securities	$	41,108	$	80	$	93,047	$	547	$	134,155	$	627

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Investment Securities Held-to-Maturity (Tables)

3 Months Ended

Mar. 31, 2019

Text Block [Abstract]

Summary of Held-to-Maturity Securities

	March 31, 2019								December 31, 2018
	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. Treasury	$	—	$	—	$	—	$	—	$	9,960	$	—	$	2	$	9,958
U.S. Government Sponsored Enterprises		201,327		453		417		201,363		234,228		336		803		233,761
SBA Backed Securities		50,797		—		1,295		49,502		52,051		—		2,065		49,986
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities		1,858,431		5,306		40,159		1,823,578		1,750,408		2,324		55,016		1,697,716
Total	$	2,110,555	$	5,759	$	41,871	$	2,074,443	$	2,046,647	$	2,660	$	57,886	$	1,991,421

Company's Securities Held-to-Maturity

The following table shows the maturity distribution of the Company’s securities held-to-maturity at March 31, 2019.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	37,216	$	37,070
After one but within five years		1,723,841		1,696,173
After five but within ten years		336,847		328,635
More than ten years		12,651		12,565
Total	$	2,110,555	$	2,074,443

Unrealized Market Loss of Securities

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio March 31, 2019. 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 12 and 304 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 487 holdings at March 31, 2019.

	March 31, 2019
	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	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government Sponsored Enterprises		—		—		74,876		417		74,876		417
SBA Backed Securities		—		—		49,502		1,295		49,502		1,295
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		59,831		439		1,237,048		39,720		1,296,879		40,159
Total temporarily impaired securities	$	59,831	$	439	$	1,361,426	$	41,432	$	1,421,257	$	41,871

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at December 31, 2018. 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 56 and 315 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 475 holdings at December 31, 2018.

	December 31, 2018
	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	$	9,958	$	2	$	—	$	—	$	9,958	$	2
U.S. Government Sponsored Enterprises		9,849		42		69,499		761		79,348		803
SBA Backed Securities		—		—		49,987		2,065		49,987		2,065
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		188,125		2,032		1,249,689		52,984		1,437,814		55,016
Total temporarily impaired securities	$	207,932	$	2,076	$	1,369,175	$	55,810	$	1,577,107	$	57,886

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Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Analysis of the 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 March 31,
	2019			2018
	(in thousands)
Allowance for loan losses, beginning of period	$	28,543		$	26,255
Loans charged off		(142	)		(87	)
Recoveries on loans previously charged-off		72			77
Net charge-offs		(70	)		(10	)
Provision charged to expense		375			450
Allowance for loan losses, end of period	$	28,848		$	26,695

Summary of Allowance for Loan Losses

Further information pertaining to the allowance for loan losses for the three months ending March 31, 2019 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, 2018	$	1,092		$	10,998		$	1,838	$	10,663	$	2,190		$	365		$	1,111		$	286	$	28,543
Charge-offs		—			(43	)		—		—		—			(99	)		—			—		(142	)
Recoveries		—			18			—		—		—			54			—			—		72
Provision		(81	)		183			160		104		(55	)		22			(10	)		52		375
Ending balance at March 31, 2019	$	1,011		$	11,156		$	1,998	$	10,767	$	2,135		$	342		$	1,101		$	338	$	28,848
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	6		$	—	$	94	$	—		$	—		$	—		$	—	$	100
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,011		$	11,150		$	1,998	$	10,673	$	2,135		$	342		$	1,101		$	338	$	28,748
Loans:
Ending balance	$	13,305		$	767,436		$	105,288	$	746,703	$	349,966		$	22,123		$	305,839		$	—	$	2,310,660
Loans deemed to be impaired	$	—		$	320		$	—	$	2,946	$	—		$	—		$	—		$	—	$	3,266
Loans not deemed to be impaired	$	13,305		$	767,116		$	105,288	$	743,757	$	349,966		$	22,123		$	305,839		$	—	$	2,307,394

Further information pertaining to the allowance for loan losses for the three months ending March 31, 2018 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, 2107	$	1,645		$	9,651		$	1,720	$	9,728	$	1,873	$	373		$	989	$	276		$	26,255
Charge-offs		—			(5	)		—		—		—		(82	)		—		—			(87	)
Recoveries		—			23			—		—		—		54			—		—			77
Provision		(207	)		(5	)		—		59		586		(24	)		78		(37	)		450
Ending balance at March 31, 2018	$	1,438		$	9,664		$	1,720	$	9,787	$	2,459	$	321		$	1,067	$	239		$	26,695
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	12		$	—	$	94	$	580	$	—		$	—	$	—		$	686
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,438		$	9,652		$	1,720	$	9,693	$	1,879	$	321		$	1,067	$	239		$	26,009
Loans:
Ending balance	$	17,583		$	758,621		$	104,044	$	726,440	$	300,941	$	19,339		$	260,179	$	—		$	2,187,147
Loans deemed to be impaired	$	—		$	522		$	—	$	2,528	$	2,774	$	—		$	—	$	—		$	5,824
Loans not deemed to be impaired	$	17,583		$	758,099		$	104,044	$	723,912	$	298,167	$	19,339		$	260,179	$	—		$	2,181,323

Loans by Risk Rating

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	13,305	$	762,991	$	105,288	$	719,367
4 (Monitor)		—		4,125		—		24,390
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		320		—		2,946
Total	$	13,305	$	767,436	$	105,288	$	746,703

The following table presents the Company’s loans by risk rating at December 31, 2018.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	13,628	$	757,089	$	97,290	$	723,170
4 (Monitor)		—		4,135		—		24,542
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		401		—		2,650
Total	$	13,628	$	761,625	$	97,290	$	750,362

Loans by Credit Rating

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at March 31, 2019 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	482,374	$	62,103	$	41,335	$	585,812
A1 – A3		181,409		7,605		151,031		340,045
Baa1 – Baa3		—		26,970		118,868		145,838
Ba2		—		6,810		—		6,810
Total	$	663,783	$	103,488	$	311,234	$	1,078,505

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2018.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	491,247	$	54,105	$	42,790	$	588,142
A1 – A3		172,472		7,605		151,381		331,458
Baa1 – Baa3		—		26,970		118,197		145,167
Ba2		—		6,810		—		6,810
Total	$	663,719	$	95,490	$	312,368	$	1,071,577

Aging of Past Due Loan Losses

	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	$	—	$	—	$	—	$	—	$	13,305	$	13,305
Commercial and industrial		138		31		—		169		767,267		767,436
Municipal		—		—		—		—		105,288		105,288
Commercial real estate		422		182		—		604		746,099		746,703
Residential real estate		2,202		119		—		2,321		347,645		349,966
Consumer and overdrafts		2		6		—		8		22,115		22,123
Home equity		1,659		1,164		—		2,823		303,016		305,839
Total	$	4,423	$	1,502	$	—	$	5,925	$	2,304,735	$	2,310,660

Further information pertaining to the allowance for loan losses at December 31, 2018 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	$	—	$	—	$	—	$	—	$	13,628	$	13,628
Commercial and industrial		187		115		—		302		761,323		761,625
Municipal		—		—		—		—		97,290		97,290
Commercial real estate		774		190		—		964		749,398		750,362
Residential real estate		2,554		569		—		3,123		345,127		348,250
Consumer and overdrafts		24		14		—		38		22,045		22,083
Home equity		1,108		425		—		1,533		290,807		292,340
Total	$	4,647	$	1,313	$	—	$	5,960	$	2,279,618	$	2,285,578

Information Pertaining to Impaired Loans

The following is information pertaining to impaired loans for March 31, 2019:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 3/31/19		Interest Income Recognized for 3 Months Ending 3/31/19
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		93		306		—		87		2
Municipal		—		—		—		—		—
Commercial real estate		182		206		—		188		—
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	275	$	512	$	—	$	275	$	2
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		227		228		6		262		3
Municipal		—		—		—		—		—
Commercial real estate		2,764		2,881		94		2,694		24
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	2,991	$	3,109	$	100	$	2,956	$	27
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		320		534		6		349		5
Municipal		—		—		—		—		—
Commercial real estate		2,946		3,087		94		2,882		24
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	3,266	$	3,621	$	100	$	3,231	$	29

The following is information pertaining to impaired loans for December 31, 2018:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 3/31/18		Interest Income Recognized for 3 Months Ending 3/31/18
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		87		291		—		49		—
Municipal		—		—		—		—		—
Commercial real estate		189		212		—		265		—
Residential real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	276	$	503	$	—	$	314	$	—
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		314		315		54		388		5
Municipal		—		—		—		—		—
Commercial real estate		2,461		2,575		91		2,278		23
Residential real estate		—		—		—		3,827		6
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	2,775	$	2,890	$	145	$	6,493	$	34
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		401		606		54		437		5
Municipal		—		—		—		—		—
Commercial real estate		2,650		2,787		91		2,543		23
Residential real estate		—		—		—		3,827		6
Consumer		—		—		—		—		—
Home equity		—		—		—		—		—
Total	$	3,051	$	3,393	$	145	$	6,807	$	34

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Reclassifications Out of Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2019

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 March 31, 2019			Three Months Ended March 31, 2018			Affected Line Item in the Statement where Net Income is Presented
(in thousands)
Unrealized gains and losses on available-for-sale securities	$	—		$	197			Net gains on sales of investments
Tax (expense) or benefit		—			(55	)		Provision for income taxes
Net of tax	$	—		$	142			Net income
Accretion of unrealized losses transferred	$	(294	)	$	(520	)		Interest on securities held-to-maturity
Tax (expense) or benefit		78			139			Provision for income taxes
Net of tax	$	(216	)	$	(381	)		Net income
Amortization of defined benefit pension items
Prior-service costs	$	(29	) (b)	$	(4	) (b)		Salaries and employee benefits
Actuarial gains (losses)		(337	) (b)		(403	) (b)		Salaries and employee benefits
Total before tax		(366	)		(407	)		Income before taxes
Tax (expense) or benefit		103			114			Provision for income taxes
Net of tax	$	(263	)	$	(293	)		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)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Reconciliation of Basic EPS and Diluted EPS

	Three Months Ended March 31,
(in thousands except share and per share data)	2019		2018
Basic EPS Computation:
Numerator:
Net income, Class A	$	7,409	$	6,062
Net income, Class B		2,009		1,647
Denominator:
Weighted average shares outstanding, Class A		3,610,329		3,608,029
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Basic EPS, Class A	$	2.05	$	1.68
Basic EPS, Class B		1.03		0.84
Diluted EPS Computation:
Numerator:
Net income, Class A	$	7,409	$	6,062
Net income, Class B		2,009		1,647
Total net income, for diluted EPS, Class A computation		9,418		7,709
Denominator:
Weighted average shares outstanding, basic, Class A		3,610,329		3,608,029
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Weighted average shares outstanding diluted, Class A		5,567,909		5,567,909
Weighted average shares outstanding, Class B		1,957,580		1,959,880
Diluted EPS, Class A	$	1.69	$	1.38
Diluted EPS, Class B		1.03		0.84

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Employee Benefits (Tables)

3 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost

Components of Net Periodic Benefit Cost for the Three Months Ended March 31,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2019			2018			2019		2018
	(in thousands)
Service cost	$	276		$	353		$	256	$	277
Interest		473			370			482		346
Expected return on plan assets		(819	)		(954	)		—		—
Recognized prior service cost (benefit)		—			(25	)		28		29
Recognized net actuarial losses		229			227			109		176
Net periodic benefit (credit) cost	$	159		$	(29	)	$	875	$	828

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

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 March 31, 2019, 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	$	1,998	$	—	$	1,998	$	—
U.S. Government Sponsored Enterprises		3,942		—		3,942		—
SBA Backed Securities		72,588		—		72,588		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		194,205		—		194,205		—
Privately Issued Residential Mortgage-Backed Securities		649		—		649		—
Obligations Issued by States and Political Subdivisions		68,107		—		4,775		63,332
Other Debt Securities		3,600		—		3,600		—
Total	$	345,089	$	—	$	281,757	$	63,332
Other Real Estate Owned	$	2,225	$	—	$	—	$	2,225
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	$	1,649	$	328	$	1,321	$	—
Financial Instruments Measured at Fair Value on a Non-recurring Basis Impaired Loans	$	195	$	—	$	—	$	195

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	$	1,992	$	—	$	1,992	$	—
U.S. Government Sponsored Enterprises		3,915		—		3,915		—
SBA Backed Securities		70,194		—		70,194		—
U.S. Government Agency and Sponsored Mortgage-Backed Securities		162,890		—		162,890		—
Privately Issued Residential Mortgage-Backed Securities		672		—		672		—
Obligations Issued by States and Political Subdivisions		93,503		—		4,775		88,728
Other Debt Securities		3,593				3,593
Total	$	336,759	$	—	$	248,031	$	88,728
Other Real Estate Owned	$	2,225	$	—	$	—	$	2,225
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	$	1,596	$	293	$	1,303	$	—
Financial Instruments Measured at Fair Value on a Non-recurring Basis Impaired Loans	$	251	$	—	$	—	$	251

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)	$	63,332	Discounted cash flow	Discount rate		2.1%-3.8% (3)
Other Real Estate Owned	$	2,225	Appraisal of collateral (1)	Appraisal adjustments (2)		30% discount
Impaired Loans	$	195	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.

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)	$	88,728		Discounted cash flow		Discount rate		2.1%-4.1% (3)
Other Real Estate Owned	$	2,225		Appraisal of collateral (1)		Appraisal adjustments (2)		30% discount
Impaired Loans	$	251		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.

Changes in Level 3 Securities

The changes in Level 3 securities for the three month period ended March 31, 2019 are shown in the table below:

	Auction Rate Securities		Obligations Issued by States & Political Subdivisions			Total
	(in thousands)
Balance at December 31, 2018	$	—	$	88,728		$	88,728
Purchases		—		970			970
Maturities and calls		—		(26,352	)		(26,352	)
Amortization		—		(14	)		(14	)
Changes in fair value		—		—			—
Balance at March 31, 2019	$	—	$	63,332		$	63,332

	Auction Rate Securities			Obligations Issued by States & Political Subdivisions			Total
	(in thousands)
Balance at December 31, 2017	$	4,459		$	78,141		$	82,600
Purchases		—			20,416			20,416
Maturities and calls		—			(22,068	)		(22,068	)
Transfer to Level 2		(4,459	)		—			(4,459	)
Amortization		—			(24	)		(24	)
Changes in fair value		—			—			—
Balance at March 31, 2018	$	—		$	76,465		$	76,465

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Fair Values of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

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 March 31, 2019 and December 31, 2018. 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.

March 31, 2019	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	$	2,110,555	$	2,074,443	$	—	$	2,074,443	$	—
Loans (1)		2,310,660		2,321,747		—		—		2,321,747
Financial liabilities:
Time deposits		542,079		542,733		—		542,733		—
Other borrowed funds		257,148		259,045		—		259,045		—
Subordinated debentures		36,083		36,083		—		36,083		—
December 31, 2018
Financial assets:
Securities held-to-maturity	$	2,046,647	$	1,991,421	$	—	$	1,991,421	$	—
Loans (1)		2,257,035		2,279,712		—		—		2,279,712
Financial liabilities:
Time deposits		560,579		559,988		—		559,988		—
Other borrowed funds		202,378		203,122		—		203,122		—
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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Revenue from Contracts with Customers (Tables)

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Schedule of Revenue From Contracts

The following table presents total revenues as presented in the Consolidated Statements of Income and the related amounts which are from contracts with customers within the scope of Topic 606. As illustrated here, the vast majority of our revenues are specifically excluded from the scope of Topic 606.

	Three Months Ended 3/31/2019		Revenue from Contracts in Scope of Topic 606		Three Months Ended 3/31/2018		Revenue from Contracts in Scope of Topic 606
	(dollars in thousands)
Total net interest income	$	23,438	$	—	$	22,468	$	—
Noninterest income:
Service charges on deposit accounts		2,209		2,209		2,067		2,067
Lockbox fees		1,089		1,089		791		791
Net gains on sales of securities		—		—		197		—
Gains on sales of mortgage loans		15		—		—		—
Other income		1,114		800		1,138		719
Total noninterest income		4,427		4,098		4,193		3,577
Total revenues	$	27,865	$	4,098	$	26,661	$	3,577

Information about Receivables with Customers

The following table provides information about receivables with customers.

(dollars in thousands)	March 31, 2019		December 31, 2018
Receivables, which are included in “Other assets”	$	1,343	$	1,205

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Components of lease expense

The components of lease expense were as follows:

	Three Months Ended 3/31/2019
(in thousands)
Operating lease costs including variable costs	$	711

Supplemental cash flow information related to leases

Supplemental cash flow information related to leases was as follows:

	Three Months Ended 3/31/2019
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	538
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	443

Supplemental balance sheet information related to leases

Supplemental balance sheet information related to leases was as follows:

	3/31/2019
(in thousands, except lease term and discount rate)
Operating Leases:
Operating lease right-of-use assets, included in other assets	$	14,496
Operating lease liabilities, included in other liabilities	$	14,637
Weighted Average Remaining Lease Term:
Operating Leases		11 Years
Weighted Average Discount Rate:
Operating Leases		3.45	%

Maturities of lease liabilities

Maturities of lease liabilities were as follows:

	Operating Leases
(in thousands)
Year Ending December 31,
2019 (excluding the three months ended March 31, 2019)	$	1,632
2020		2,120
2021		1,841
2022		1,709
2023		1,671
Thereafter		8,949
Total lease payments		17,922
Less imputed interest		(3,285	)
Total lease payments	$	14,637

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Basis of Financial Statement Presentation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 Segment
Number of Reportable Segments	1
Century Bancorp Capital Trust II [Member]
Equity ownership interest	100.00%

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Recent Accounting Developments - Additional Information (Detail) $ in Millions	Mar. 31, 2019 USD ($)
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset	$ 15.1

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Securities Available-for-Sale - Summary of Securities Available-for-Sale (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 345,709	$ 336,751
Gross Unrealized Gains	329	635
Gross Unrealized Losses	949	627
Total, Fair Value	345,089	336,759
U.S. Treasury [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,000	2,000
Gross Unrealized Losses	2	8
Total, Fair Value	1,998	1,992
U.S. Government Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,950	3,946
Gross Unrealized Losses	8	31
Total, Fair Value	3,942	3,915
SBA Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	72,906	70,477
Gross Unrealized Gains		1
Gross Unrealized Losses	318	284
Total, Fair Value	72,588	70,194
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	194,549	162,604
Gross Unrealized Gains	228	536
Gross Unrealized Losses	572	250
Total, Fair Value	194,205	162,890
Privately Issued Residential Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	653	679
Gross Unrealized Gains	4	3
Gross Unrealized Losses	8	10
Total, Fair Value	649	672
Obligations Issued by States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	68,051	93,445
Gross Unrealized Gains	56	58
Total, Fair Value	68,107	93,503
Other Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,600	3,600
Gross Unrealized Gains	41	37
Gross Unrealized Losses	41	44
Total, Fair Value	$ 3,600	$ 3,593

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Securities Available-for-Sale - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($) Security	Mar. 31, 2018 USD ($) Security	Dec. 31, 2018 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Securities at fair value pledged to secure public deposits and repurchase agreements	$ 1,499,836,000		$ 1,441,059,000
Securities available-for-sale are securities at fair value pledged for borrowing	35,852,000		34,787,000
Gross gains on sales of securities		$ 197,000
Proceeds from sales of securities available-for-sale		17,871,000
Securities at floating rate or adjustable rate	273,776,000
Security available for sale, amortized cost	345,709,000		336,751,000
Sales of securities available for sale	$ 0
Federal Home Loan Bank [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross gains on sales of securities		$ 197,000
Securities AFS [Member]
Schedule of Available-for-sale Securities [Line Items]
Weighted average remaining life of investment securities available-for-sale	5 years 2 months 12 days
Number of securities, temporarily impaired for less than 12 months | Security	21	10
Number of securities, temporarily impaired for 12 months or longer | Security	31	30
Number of securities, temporarily impaired, total | Security	183	190
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities at fair value pledged to secure public deposits and repurchase agreements	$ 188,887,000		197,304,000
Security available for sale, amortized cost	194,549,000		162,604,000
U.S. Government Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Security available for sale, amortized cost	$ 3,950,000		$ 3,946,000

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Securities Available-for-Sale - Estimated Maturity Distribution of Securities Available-for-Sale (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Within one year, Amortized Cost	$ 66,419
After one but within five years, Amortized Cost	101,922
After five but within ten years, Amortized Cost	133,284
More than ten years, Amortized Cost	44,084
Amortized Cost	345,709	$ 336,751
Within one year, Fair Value	66,413
After one but within five years, Fair Value	101,815
After five but within ten years, Fair Value	132,854
More than ten years, Fair Value	44,007
Total, Fair Value	$ 345,089	$ 336,759

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Securities Available-for-Sale - Continuous Unrealized Loss Position for 12 Months or Less and 12 Months and Longer (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	$ 89,939	$ 41,108
Less Than 12 Months, Unrealized Losses	318	80
12 Months or Longer, Fair Value	103,714	93,047
12 Months or Longer, Unrealized Losses	631	547
Total, Fair Value	193,653	134,155
Total, Unrealized Losses	949	627
U.S. Treasury [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or Longer, Fair Value	1,998	1,992
12 Months or Longer, Unrealized Losses	2	8
Total, Fair Value	1,998	1,992
Total, Unrealized Losses	2	8
U.S. Government Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value		3,914
Less Than 12 Months, Unrealized Losses		31
12 Months or Longer, Fair Value	3,942
12 Months or Longer, Unrealized Losses	8
Total, Fair Value	3,942	3,914
Total, Unrealized Losses	8	31
SBA Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	19,409	17,950
Less Than 12 Months, Unrealized Losses	40	28
12 Months or Longer, Fair Value	53,180	44,323
12 Months or Longer, Unrealized Losses	278	256
Total, Fair Value	72,589	62,273
Total, Unrealized Losses	318	284
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	70,530	19,244
Less Than 12 Months, Unrealized Losses	278	21
12 Months or Longer, Fair Value	43,656	45,782
12 Months or Longer, Unrealized Losses	294	229
Total, Fair Value	114,186	65,026
Total, Unrealized Losses	572	250
Privately Issued Residential Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or Longer, Fair Value	479	495
12 Months or Longer, Unrealized Losses	8	10
Total, Fair Value	479	495
Total, Unrealized Losses	8	10
Other Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
12 Months or Longer, Fair Value	459	455
12 Months or Longer, Unrealized Losses	41	44
Total, Fair Value	459	455
Total, Unrealized Losses	$ 41	$ 44

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Investment Securities Held-to-Maturity - Summary of Held-to-Maturity Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 2,110,555	$ 2,046,647
Gross Unrealized Gains	5,759	2,660
Gross Unrealized Losses	41,871	57,886
Estimated Fair Value	2,074,443	1,991,421
U.S. Treasury [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost		9,960
Gross Unrealized Losses		2
Estimated Fair Value		9,958
U.S. Government Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	201,327	234,228
Gross Unrealized Gains	453	336
Gross Unrealized Losses	417	803
Estimated Fair Value	201,363	233,761
SBA Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	50,797	52,051
Gross Unrealized Losses	1,295	2,065
Estimated Fair Value	49,502	49,986
Mortgage-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	1,858,431	1,750,408
Gross Unrealized Gains	5,306	2,324
Gross Unrealized Losses	40,159	55,016
Estimated Fair Value	$ 1,823,578	$ 1,697,716

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Investment Securities Held-to-Maturity - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($) Security	Dec. 31, 2018 USD ($) Security
Schedule of Held-to-maturity Securities [Line Items]
Securities at fair value pledged to secure public deposits and repurchase agreements	$ 1,499,836,000	$ 1,441,059,000
Securities held to maturity at floating rate or adjustable rate	$ 120,000
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
Number of securities, temporarily impaired for less than 12 months | Security	12	56
Number of securities, temporarily impaired for 12 months or longer | Security	304	315
Number of securities, temporarily impaired, total | Security	487	475
Held-to-Maturity Securities [Member] | U.S. Government Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Weighted average remaining life	$ 116,160,000
Federal Home Loan Bank [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities pledged for borrowing at the Federal Home Loan Bank	$ 305,776,000	$ 291,190,000

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Investment Securities Held-to-Maturity - Company's Securities Held-to-Maturity (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Within one year, Amortized Cost	$ 37,216
After one but within five years, Amortized Cost	1,723,841
After five but within ten years, Amortized Cost	336,847
More than ten years, Amortized Cost	12,651
Amortized Cost	2,110,555	$ 2,046,647
Within one year, Fair Value	37,070
After one but within five years, Fair Value	1,696,173
After five but within ten years, Fair Value	328,635
More than ten years, Fair Value	12,565
Estimated Fair Value	$ 2,074,443	$ 1,991,421

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Investment Securities Held-to-Maturity - Unrealized Market Loss of Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Held-to-maturity Securities [Line Items]
Less Than 12 Months, Fair Value	$ 59,831	$ 207,932
Less Than 12 Months, Unrealized Losses	439	2,076
12 Months or Longer, Fair Value	1,361,426	1,369,175
12 Months or Longer, Unrealized Losses	41,432	55,810
Total, Fair Value	1,421,257	1,577,107
Total, Unrealized Losses	41,871	57,886
U.S. Treasury [Member]
Schedule of Held-to-maturity Securities [Line Items]
Less Than 12 Months, Fair Value		9,958
Less Than 12 Months, Unrealized Losses		2
Total, Fair Value		9,958
Total, Unrealized Losses		2
U.S. Government Sponsored Enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Less Than 12 Months, Fair Value		9,849
Less Than 12 Months, Unrealized Losses		42
12 Months or Longer, Fair Value	74,876	69,499
12 Months or Longer, Unrealized Losses	417	761
Total, Fair Value	74,876	79,348
Total, Unrealized Losses	417	803
SBA Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
12 Months or Longer, Fair Value	49,502	49,987
12 Months or Longer, Unrealized Losses	1,295	2,065
Total, Fair Value	49,502	49,987
Total, Unrealized Losses	1,295	2,065
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Less Than 12 Months, Fair Value	59,831	188,125
Less Than 12 Months, Unrealized Losses	439	2,032
12 Months or Longer, Fair Value	1,237,048	1,249,689
12 Months or Longer, Unrealized Losses	39,720	52,984
Total, Fair Value	1,296,879	1,437,814
Total, Unrealized Losses	$ 40,159	$ 55,016

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Allowance for Loan Losses - Analysis of Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Receivables [Abstract]
Allowance for loan losses, beginning of year	$ 28,543	$ 26,255
Loans charged-off	(142)	(87)
Recoveries on loans previously charged-off	72	77
Net recoveries (charge-offs)	(70)	(10)
Provision charged to expense	375	450
Allowance for loan losses, end of year	$ 28,848	$ 26,695

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Allowance for Loan Losses - Summary of Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	$ 28,543	$ 26,255
Charge-offs	(142)	(87)
Recoveries	72	77
Provision	375	450
Allowance for loan losses, end of year	28,848	26,695
Amount of allowance for loan losses for loans deemed to be impaired	100	686	$ 145
Amount of allowance for loan losses for loans not deemed to be impaired	28,748	26,009
Loans:
Total loans, net	2,310,660	2,187,147	2,285,578
Loans deemed to be impaired	3,266	5,824	3,051
Loans not deemed to be impaired	2,307,394	2,181,323
Construction and Land Development [Member]
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	1,092	1,645
Provision	(81)	(207)
Allowance for loan losses, end of year	1,011	1,438
Amount of allowance for loan losses for loans not deemed to be impaired	1,011	1,438
Loans:
Total loans, net	13,305	17,583	13,628
Loans not deemed to be impaired	13,305	17,583
Commercial and Industrial [Member]
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	10,998	9,651
Charge-offs	(43)	(5)
Recoveries	18	23
Provision	183	(5)
Allowance for loan losses, end of year	11,156	9,664
Amount of allowance for loan losses for loans deemed to be impaired	6	12	54
Amount of allowance for loan losses for loans not deemed to be impaired	11,150	9,652
Loans:
Total loans, net	767,436	758,621	761,625
Loans deemed to be impaired	320	522	401
Loans not deemed to be impaired	767,116	758,099
Municipal [Member]
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	1,838	1,720
Provision	160
Allowance for loan losses, end of year	1,998	1,720
Amount of allowance for loan losses for loans not deemed to be impaired	1,998	1,720
Loans:
Total loans, net	105,288	104,044	97,290
Loans not deemed to be impaired	105,288	104,044
Commercial Real Estate [Member]
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	10,663	9,728
Provision	104	59
Allowance for loan losses, end of year	10,767	9,787
Amount of allowance for loan losses for loans deemed to be impaired	94	94	91
Amount of allowance for loan losses for loans not deemed to be impaired	10,673	9,693
Loans:
Total loans, net	746,703	726,440	750,362
Loans deemed to be impaired	2,946	2,528	2,650
Loans not deemed to be impaired	743,757	723,912
Residential Real Estate [Member]
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	2,190	1,873
Provision	(55)	586
Allowance for loan losses, end of year	2,135	2,459
Amount of allowance for loan losses for loans deemed to be impaired		580
Amount of allowance for loan losses for loans not deemed to be impaired	2,135	1,879
Loans:
Total loans, net	349,966	300,941	348,250
Loans deemed to be impaired		2,774
Loans not deemed to be impaired	349,966	298,167
Consumer [Member]
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	365	373
Charge-offs	(99)	(82)
Recoveries	54	54
Provision	22	(24)
Allowance for loan losses, end of year	342	321
Amount of allowance for loan losses for loans not deemed to be impaired	342	321
Loans:
Total loans, net	22,123	19,339	22,083
Loans not deemed to be impaired	22,123	19,339
Home Equity [Member]
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	1,111	989
Provision	(10)	78
Allowance for loan losses, end of year	1,101	1,067
Amount of allowance for loan losses for loans not deemed to be impaired	1,101	1,067
Loans:
Total loans, net	305,839	260,179	$ 292,340
Loans not deemed to be impaired	305,839	260,179
Unallocated [Member]
Allowance for Loan Losses:
Allowance for loan losses, beginning of year	286	276
Provision	52	(37)
Allowance for loan losses, end of year	338	239
Amount of allowance for loan losses for loans not deemed to be impaired	$ 338	$ 239

XML

Allowance for Loan Losses - Loans by Risk Rating (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Loans by risk rating
Financing Receivable, Net	$ 2,310,660	$ 2,285,578	$ 2,187,147
Construction and Land Development [Member]
Loans by risk rating
Financing Receivable, Net	13,305	13,628	17,583
Commercial and Industrial [Member]
Loans by risk rating
Financing Receivable, Net	767,436	761,625	758,621
Municipal [Member]
Loans by risk rating
Financing Receivable, Net	105,288	97,290	104,044
Commercial Real Estate [Member]
Loans by risk rating
Financing Receivable, Net	746,703	750,362	$ 726,440
1-3 (Pass) [Member] | Construction and Land Development [Member]
Loans by risk rating
Financing Receivable, Net	13,305	13,628
1-3 (Pass) [Member] | Commercial and Industrial [Member]
Loans by risk rating
Financing Receivable, Net	762,991	757,089
1-3 (Pass) [Member] | Municipal [Member]
Loans by risk rating
Financing Receivable, Net	105,288	97,290
1-3 (Pass) [Member] | Commercial Real Estate [Member]
Loans by risk rating
Financing Receivable, Net	719,367	723,170
4 (Monitor) [Member] | Commercial and Industrial [Member]
Loans by risk rating
Financing Receivable, Net	4,125	4,135
4 (Monitor) [Member] | Commercial Real Estate [Member]
Loans by risk rating
Financing Receivable, Net	24,390	24,542
Impaired [Member] | Commercial and Industrial [Member]
Loans by risk rating
Financing Receivable, Net	320	401
Impaired [Member] | Commercial Real Estate [Member]
Loans by risk rating
Financing Receivable, Net	$ 2,946	$ 2,650

XML

Allowance for Loan Losses - Loans by Credit Rating (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	$ 1,078,505	$ 1,071,577
Aaa - Aa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	585,812	588,142
A1 - A3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	340,045	331,458
Baa1 - Baa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	145,838	145,167
Ba2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	6,810	6,810
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	663,783	663,719
Commercial and Industrial [Member] | Aaa - Aa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	482,374	491,247
Commercial and Industrial [Member] | A1 - A3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	181,409	172,472
Municipal [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	103,488	95,490
Municipal [Member] | Aaa - Aa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	62,103	54,105
Municipal [Member] | A1 - A3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	7,605	7,605
Municipal [Member] | Baa1 - Baa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	26,970	26,970
Municipal [Member] | Ba2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	6,810	6,810
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	311,234	312,368
Commercial Real Estate [Member] | Aaa - Aa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	41,335	42,790
Commercial Real Estate [Member] | A1 - A3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	151,031	151,381
Commercial Real Estate [Member] | Baa1 - Baa3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and leases receivable net of deferred income credit quality	$ 118,868	$ 118,197

XML

Allowance for Loan Losses - Aging of Past Due Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	$ 4,423	$ 4,647
Non Accrual	1,502	1,313
Total Past Due	5,925	5,960
Current Loans	2,304,735	2,279,618
Total loans, net	2,310,660	2,285,578	$ 2,187,147
Construction and Land Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Current Loans	13,305	13,628
Total loans, net	13,305	13,628	17,583
Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	138	187
Non Accrual	31	115
Total Past Due	169	302
Current Loans	767,267	761,323
Total loans, net	767,436	761,625	758,621
Municipal [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Current Loans	105,288	97,290
Total loans, net	105,288	97,290	104,044
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	422	774
Non Accrual	182	190
Total Past Due	604	964
Current Loans	746,099	749,398
Total loans, net	746,703	750,362	726,440
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	2,202	2,554
Non Accrual	119	569
Total Past Due	2,321	3,123
Current Loans	347,645	345,127
Total loans, net	349,966	348,250	300,941
Consumer and overdrafts [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	2	24
Non Accrual	6	14
Total Past Due	8	38
Current Loans	22,115	22,045
Total loans, net	22,123	22,083	19,339
Home Equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Accruing 30-89 Days Past Due	1,659	1,108
Non Accrual	1,164	425
Total Past Due	2,823	1,533
Current Loans	303,016	290,807
Total loans, net	$ 305,839	$ 292,340	$ 260,179

XML

Allowance for Loan Losses - Information Pertaining to Impaired Loans (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Carrying Value	$ 275		$ 276
With no required reserve recorded, Unpaid Balance Principal	512		503
With no required reserve recorded, Average Carrying Value Recognized	275	$ 314
With no required reserve recorded, Interest Income	2
With required reserve recorded, Carrying Value	2,991		2,775
With required reserve recorded, Unpaid Balance Principal	3,109		2,890
With required reserve recorded, Required Reserve	100	686	145
With required reserve recorded, Average Carrying Value Recognized	2,956	6,493
With required reserve recorded, Interest Income	27	34
Carrying Value	3,266	5,824	3,051
Unpaid Balance Principal	3,621		3,393
With required reserve recorded, Required Reserve	100	686	145
Average Carrying Value Recognized	3,231	6,807
Interest Income	29	34
Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Carrying Value	93		87
With no required reserve recorded, Unpaid Balance Principal	306		291
With no required reserve recorded, Average Carrying Value Recognized	87	49
With no required reserve recorded, Interest Income	2
With required reserve recorded, Carrying Value	227		314
With required reserve recorded, Unpaid Balance Principal	228		315
With required reserve recorded, Required Reserve	6	12	54
With required reserve recorded, Average Carrying Value Recognized	262	388
With required reserve recorded, Interest Income	3	5
Carrying Value	320	522	401
Unpaid Balance Principal	534		606
With required reserve recorded, Required Reserve	6	12	54
Average Carrying Value Recognized	349	437
Interest Income	5	5
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no required reserve recorded, Carrying Value	182		189
With no required reserve recorded, Unpaid Balance Principal	206		212
With no required reserve recorded, Average Carrying Value Recognized	188	265
With required reserve recorded, Carrying Value	2,764		2,461
With required reserve recorded, Unpaid Balance Principal	2,881		2,575
With required reserve recorded, Required Reserve	94	94	91
With required reserve recorded, Average Carrying Value Recognized	2,694	2,278
With required reserve recorded, Interest Income	24	23
Carrying Value	2,946	2,528	2,650
Unpaid Balance Principal	3,087		2,787
With required reserve recorded, Required Reserve	94	94	$ 91
Average Carrying Value Recognized	2,882	2,543
Interest Income	$ 24	23
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With required reserve recorded, Required Reserve		580
With required reserve recorded, Average Carrying Value Recognized		3,827
With required reserve recorded, Interest Income		6
Carrying Value		2,774
With required reserve recorded, Required Reserve		580
Average Carrying Value Recognized		3,827
Interest Income		$ 6

XML

Allowance for Loan Losses - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($) Contracts Contract	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Financing Receivable, Allowance for Credit Losses [Line Items]
Specific reserves	$ 100,000	$ 686,000	$ 145,000
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of troubled debt restructurings | Contracts	1
Post-modification outstanding recorded investment		2,675,000
Specific reserves		580,000
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of troubled debt restructurings | Contract	1
Pre-modification outstanding recorded investment		17,000
Post-modification outstanding recorded investment		17,000
Specific reserves		$ 1,000

XML

Reclassifications Out of Accumulated Other Comprehensive Income - Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net gains on sales of securities		$ 197
Provision for income taxes	$ 118	(501)
Net income	9,418	7,709
Salaries and employee benefits	(11,035)	(11,225)
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		197
Provision for income taxes		(55)
Net income		142
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	(294)	(520)
Provision for income taxes	78	139
Net income	(216)	(381)
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	(29)	(4)
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	(337)	(403)
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	(366)	(407)
Provision for income taxes	103	114
Net income	$ (263)	$ (293)

XML

Earnings per Share ("EPS") - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019
Class A Common Stock [Member] | 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
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 9,418	$ 7,709
Class A Common Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 7,409	$ 6,062
Weighted average shares outstanding, basic	3,610,329	3,608,029
Basic earnings per share	$ 2.05	$ 1.68
Net income	$ 7,409	$ 6,062
Weighted average shares outstanding, diluted	5,567,909	5,567,909
Diluted earnings per share	$ 1.69	$ 1.38
Class B Common Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 2,009	$ 1,647
Weighted average shares outstanding, basic	1,957,580	1,959,880
Basic earnings per share	$ 1.03	$ 0.84
Net income	$ 2,009	$ 1,647
Weighted average shares outstanding, diluted	1,957,580	1,959,880
Diluted earnings per share	$ 1.03	$ 0.84

XML

Employee Benefits - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year	$ 0
Accounting Standards Update 2017-07 [Member]
Defined Benefit Plan Disclosure [Line Items]
Reclassification from salaries and employee benefits to other expenses	$ 502,000	$ 169,000

XML

Employee Benefits - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Defined Benefit Pension Plan [Member]
Components of net periodic benefit cost
Service cost	$ 276	$ 353
Interest cost	473	370
Expected return on plan assets	(819)	(954)
Recognized prior service cost		(25)
Recognized net losses	229	227
Net periodic cost (benefit)	159	(29)
Supplemental Insurance/ Retirement Plan [Member]
Components of net periodic benefit cost
Service cost	256	277
Interest cost	482	346
Recognized prior service cost	28	29
Recognized net losses	109	176
Net periodic cost (benefit)	$ 875	$ 828

XML

Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Specific adjustments to impaired loans recognized	$ 2,000	$ 540,000
Amortized cost of Level 3 securities	1,635,000	$ 1,635,000	$ 76,465,000
Unrealized loss			$ 0
Liabilities measured at fair value on a recurring or nonrecurring basis	0
Real Estate, Other [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans fair value increase decrease	0
Real estate owned fair value increase decrease	0
Impaired Loans [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans fair value increase decrease	56,000
Real estate owned fair value increase decrease	56,000
Fair Value Measurements, Level 3 Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized cost of Level 3 securities	63,332,000
Unrealized loss	$ 0

XML

Fair Value Measurements - Assets Measured at Fair Value (Detail) $ in Thousands		3 Months Ended		12 Months Ended
		Mar. 31, 2019 USD ($)		Dec. 31, 2018 USD ($)
Securities AFS [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Fair Value		$ 63,332	[1]	$ 88,728
Valuation Technique	[1]	Discounted cash flow		Discounted cash flow
Unobservable Input	[1]	Discount rate		Discount rate
Impaired Loans [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Fair Value		$ 195		$ 251
Valuation Technique		Appraisal of collateral		Appraisal of collateral
Unobservable Input		Appraisal adjustments		Appraisal adjustments
Other Real Estate Owned [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Fair Value		$ 2,225		$ 2,225
Valuation Technique		Appraisal of collateral		Appraisal of collateral
Unobservable Input		Appraisal adjustments		Appraisal adjustments
Unobservable Input Value or Range		30.00%		30.00%
Minimum [Member] | Securities AFS [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Securities AFS, Unobservable Input Value or Range		2.1		2.1
Minimum [Member] | Impaired Loans [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Impaired Loans, Unobservable Input Value or Range		0		0
Maximum [Member] | Securities AFS [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Securities AFS, Unobservable Input Value or Range		3.8		4.1
Maximum [Member] | Impaired Loans [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Impaired Loans, Unobservable Input Value or Range		30		30

[1] Municipal securities generally have maturities of one year or less and, therefore, the amortized cost equates to the fair value.

XML

Fair Value Measurements - Changes in Level 3 Securities (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	$ 88,728	$ 82,600
Purchases	970	20,416
Maturities/redemptions	(26,352)	(22,068)
Transfer to Level 2		(4,459)
Amortization	(14)	(24)
Ending Balance	63,332	76,465
Auction Rate Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance		4,459
Transfer to Level 2		(4,459)
Obligations Issued by States and Political Subdivisions [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	88,728	78,141
Purchases	970	20,416
Maturities/redemptions	(26,352)	(22,068)
Amortization	(14)	(24)
Ending Balance	$ 63,332	$ 76,465

XML

Fair Value Measurements - Financial Instruments Measured at Fair Value on a Recurring and Non-recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	$ 345,089	$ 336,759
Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	281,757	248,031
Fair Value Measurements, Level 3 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	63,332	88,728
Other Real Estate Owned	2,225	2,225
Financial Instruments Measured at Fair Value on a Non-recurring Basis Impaired Loans	195	251
U.S. Treasury [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	1,998	1,992
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	1,998	1,992
U.S. Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	3,942	3,915
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	3,942	3,915
SBA Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	72,588	70,194
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	72,588	70,194
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	194,205	162,890
U.S. Government Agency and Sponsored Enterprises 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	194,205	162,890
Privately Issued Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	649	672
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	649	672
Obligations Issued by States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	68,107	93,503
Obligations Issued by States and Political Subdivisions [Member] | Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	4,775	4,775
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	63,332	88,728
Other Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	3,600	3,593
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	3,600	3,593
Equity Securities [Member] | Fair Value Measurements, Level 1 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	328	293
Equity Securities [Member] | Fair Value Measurements, Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	1,321	1,303
Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	345,089	336,759
Other Real Estate Owned	2,225	2,225
Financial Instruments Measured at Fair Value on a Non-recurring Basis Impaired Loans	195	251
Carrying Value [Member] | U.S. Treasury [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	1,998	1,992
Carrying Value [Member] | U.S. Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	3,942	3,915
Carrying Value [Member] | SBA Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	72,588	70,194
Carrying Value [Member] | U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	194,205	162,890
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	649	672
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	68,107	93,503
Carrying Value [Member] | Other Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities AFS	3,600	3,593
Carrying Value [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Instruments Measured at Fair Value on a Recurring Basis Equity Securities	$ 1,649	$ 1,596

XML

Fair Values of Financial Instruments - Carrying Amount and Fair Value of Company's Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financial assets:
Securities held-to-maturity	$ 2,110,555	$ 2,046,647
Loans	2,281,812	2,257,035
Financial liabilities:
Time deposits	542,079	560,579
Other borrowed funds	257,148	202,378
Subordinated debentures	36,083	36,083
Carrying Value [Member]
Financial assets:
Securities held-to-maturity	2,110,555	2,046,647
Loans	2,310,660	2,257,035
Financial liabilities:
Time deposits	542,079	560,579
Other borrowed funds	257,148	202,378
Subordinated debentures	36,083	36,083
Estimated Fair Value [Member]
Financial assets:
Securities held-to-maturity	2,074,443	1,991,421
Loans	2,321,747	2,279,712
Financial liabilities:
Time deposits	542,733	559,988
Other borrowed funds	259,045	203,122
Subordinated debentures	36,083	36,083
Fair Value Measurements, Level 2 Inputs [Member]
Financial assets:
Securities held-to-maturity	2,074,443	1,991,421
Financial liabilities:
Time deposits	542,733	559,988
Other borrowed funds	259,045	203,122
Subordinated debentures	36,083	36,083
Fair Value Measurements, Level 3 Inputs [Member]
Financial assets:
Loans	$ 2,321,747	$ 2,279,712

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Revenue from Contracts with Customers - Schedule of Revenue from Contracts (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Total net interest income	$ 23,438	$ 22,468
Noninterest income:
Service charges on deposit accounts	2,209	2,067
Lockbox fees	1,089	791
Net gains on sales of securities		197
Gains on sales of mortgage loans	15
Other income	1,114	1,138
Total noninterest income	4,427	4,193
ASU 2014-09 [Member]
Disaggregation of Revenue [Line Items]
Total net interest income	23,438	22,468
Noninterest income:
Service charges on deposit accounts	2,209	2,067
Lockbox fees	1,089	791
Net gains on sales of securities		197
Gains on sales of mortgage loans	15
Other income	1,114	1,138
Total noninterest income	4,427	4,193
Total revenues	27,865	26,661
ASU 2014-09 [Member] | Revenue Guidance Contracts in Scope of Topic 606 [Member]
Noninterest income:
Service charges on deposit accounts	2,209	2,067
Lockbox fees	1,089	791
Other income	800	719
Total noninterest income	4,098	3,577
Total revenues	$ 4,098	$ 3,577

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Revenue from Contracts with Customers - Information about Receivables with Customers (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Other Assets [Member]
Disaggregation of Revenue [Line Items]
Receivables, which are included in "Other assets"	$ 1,343	$ 1,205

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Leases - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($)
Operating lease option to extend	options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year.
Sublease Income	$ 10,000
Lessee operating lease lease not yet commenced undiscounted cash	$ 144,000
Operating lease lease term	3 years
Sublease option to terminate	The sublease expires in 2021 with an option to terminate and no option to extend.
Maximum [Member]
Operating lease remaining lease term	32 years
Minimum [Member]
Operating lease remaining lease term	1 year

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Leases - Components of lease expense (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Operating lease costs including variable costs	$ 711

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Leases - Supplemental cash flow information related to leases (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 538
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$ 443

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Leases - Supplemental balance sheet information related to leases (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Operating Leases:
Operating lease liabilities, included in other liabilities	$ 14,637
Weighted Average Remaining Lease Term:
Operating Leases	11 years
Weighted Average Discount Rate:
Operating Leases	3.45%
Other Assets [Member]
Operating Leases:
Operating lease right-of-use assets, included in other assets	$ 14,496
Other Liabilities [Member]
Operating Leases:
Operating lease liabilities, included in other liabilities	$ 14,637

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Leases - Maturities of lease liabilities (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Year Ending December 31, 2019 (excluding the three months ended March 31, 2019)	$ 1,632
2020	2,120
2021	1,841
2022	1,709
2023	1,671
Thereafter	8,949
Total lease payments	17,922
Less imputed interest	(3,285)
Total lease payments	$ 14,637