Note 2 - Investment Securities

6 Months Ended

Jun. 30, 2016

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 2:

Investment Securities

The amortized cost, gross unrealized gains and losses and approximate fair values of available-for-sale securities at June 30, 2016 and December 31, 2015 are as follows:

(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2016:

U. S. Government agency mortgage-backed securities	$	12,170	$	21	$	(52	)	$	12,139
Corporate bonds		9,000		-		(102	)		8,898
Subordinated Notes		2,000		-		-			2,000
	$	23,170	$	21	$	(154	)	$	23,037

December 31, 2015:

U. S. Government agency bonds	$	5,000	$	-	$	(46	)	$	4,954
U. S. Government agency mortgage-backed securities		13,625		-		(212	)		13,413
Corporate bonds		9,000		71		(61	)		9,010
Subordinated Notes		2,000		-		-			2,000
	$	29,625	$	71	$	(319	)	$	29,377

The following table presents the gross unrealized loss and fair value of the Company’s available-for-sale securities, aggregated by the length of time the individual securities have been in a continuous loss position, at June 30, 2016 and December 31, 2015:

	Less Than 12 Months					12 Months or More					Total
(in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
June 30, 2016:

U. S. Government agency mortgage - backed securities	$	-	$	-		$	7,136	$	(52	)	$	7,136	$	(52	)
Corporate bonds		2,985		(15	)		5,913		(87	)		8,898		(102	)
Totals	$	2,985	$	(15	)	$	13,049	$	(139	)	$	16,034	$	(154	)

December 31, 2015:

U. S. Government agency bonds	$	4,954	$	(46	)	$	-	$	-		$	4,954	$	(46	)
U. S. Government agency mortgage - backed securities		2,863		(42	)		10,550		(170	)		13,413		(212	)
Corporate bonds		-		-			5,939		(61	)		5,939		(61	)
Totals	$	7,817	$	(88	)	$	16,489	$	(231	)	$	24,306	$	(319	)

At June 30, 2016, six of ten available-for-sale securities had unrealized losses with an average depreciation of 0.7% from the total amortized cost. At December 31, 2015, nine out of eleven available-for-sale securities had unrealized losses with an aggregate depreciation of 1.3% from the total amortized cost.

PATRIOT NATIONAL BANCORP

, INC. AND SUBSIDIARY

Notes to consolidated financial statements (Unaudited)

The Company performs a quarterly analysis of those securities that are in an unrealized loss position to determine if those losses qualify as other-than-temporary impairments. This analysis considers the following criteria in its determination: the ability of the issuer to meet its obligations, management’s plans and ability to maintain its investment in the security, the length of time and the amount by which the security has been in a loss position, the interest rate environment, the general economic environment and prospects or projections for improvement or deterioration.

Management believes that none of the unrealized losses on available-for-sale securities noted above are other than temporary due to the fact that they relate to market interest rate changes on U.S. Government agency debt, corporate debt and mortgage-backed securities issued by U.S. Government agencies. Management considers the issuers of the securities to be financially sound, the corporate bonds are investment grade and the Company expects to receive all contractual principal and interest related to these investments. Because the Company does not intend to sell the investments, and it will not be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2016.

The amortized cost and fair value of available-for-sale debt securities at June 30, 2016 by contractual maturity are presented below. Actual maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the securities may be prepaid without any penalties. The actual maturities will also differ from contractual maturities because issuers of certain securities retain early call or prepayment rights.

(in thousands)
	Amortized Cost		Fair Value
Maturity:
Due after five years through ten years	$	11,000	$	10,898
U.S. Government agency mortgage-backed securities		12,170		12,139
Total	$	23,170	$	23,037

At June 30, 2016 and December 31, 2015, securities of $4.9 and $5.5 million, respectively, were pledged with the Federal Reserve Bank of New York primarily to secure municipal deposits.

There were no sales of available-for-sale securities in during the six-month periods ended June 30, 2016 or June 30, 2015.

- Definition

The entire disclosure for investments in certain debt and equity securities.

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