See accompanying “Notes to Consolidated Financial Statements.”  Year Ended December 31,  2012  2011 2010 (dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 19,039 $ 16,693  $ 13,574 Adjustments to reconcile net income to net cash provided by operating activities: Mortgage loans originated for sale (20,149) (22,664) — Proceeds from mortgage loans sold 14,457 19,697 — Gain on sales of mortgage loans held for sale (297) (422) — Gain on sale of loans — (238) — Gain on sale of fixed assets (1) — (7) Net gains on sales of securities (1,843) (1,940) (1,851) Provision for loan losses 4,150 4,550 5,575 Deferred tax benefit (2,104) (953) (1,546) Net depreciation and amortization 6,445 5,558 4,955 Decrease (increase) in accrued interest receivable 211 579 (795) Decrease in prepaid FDIC assessments 1,562 1,794 2,629 (Gain) loss on sales of other real estate owned (1) 8 (127) Write down of other real estate owned — 117 — Increase in other assets (3,113) (4,456) (1,417) Increase (decrease) in other liabilities 1,070 503 (849) Net cash provided by operating activities 19,426 18,826 20,141 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from maturities of short-term investments 38,397 121,106   131,762 Purchase of short-term investments (37,413) (25,539)   (227,162) Proceeds from redemption of Federal Home Loan Bank of Boston stock 385 — — Proceeds from calls/maturities of securities available-for-sale 532,734 722,403   610,975 Proceeds from sales of securities available-for-sale 294,881 75,615 41,251 Purchase of securities available-for-sale (998,955)  (1,140,194)  (914,944) Proceeds from calls/maturities of securities held-to-maturity 88,628 119,315   154,445 Purchase of securities held-to-maturity (185,346) (68,863)   (167,442) Proceeds from sales of loans — 4,000 — Net increase in loans (123,183) (82,793) (33,315) Proceeds from sales of other real estate owned 1,584 802 555 Proceeds from sales of fixed assets 1 — 13 Capital expenditures (4,300) (2,692) (2,281) Net cash used in investing activities (392,587) (276,840)   (406,143) CASH FLOWS FROM FINANCING ACTIVITIES: Net (decrease) increase in time deposit accounts (13,518) 16,241   124,622 Net increase in demand, savings, money market and NOW deposits 334,007 206,320 75,414 Net proceeds from the exercise of stock options 304 52 150 Cash dividends (2,186) (2,180) (2,173) Net increase (decrease) in securities sold under agreements to repurchase 48,070 34,770 (10,195) Net (decrease) increase in other borrowed funds (48,999) 22,025 (11,906) Net cash provided by financing activities 317,678 277,228   175,912 Net (decrease) increase in cash and cash equivalents (55,483) 19,214   (210,090) Cash and cash equivalents at beginning of year 207,766 188,552   398,642 Cash and cash equivalents at end of year  $ 152,283 $ 207,766  $ 188,552 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 19,597 $ 22,799  $ 24,930 Income taxes 3,348 3,109 3,580 Change in unrealized gains on securities available-for-sale, net of taxes  $ 4,011 $ 4,726 $ (536) Pension liability adjustment, net of taxes  (1,839) (3,667) 1,259 Transfer of loans to other real estate owned 400 2,110 428 Consolidated Statements of Cash Flows 22