Note

Available-for Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale securities at

September

30,

2018

and

December

31,

2017

are as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
September 30, 2018:
U. S. Government agency mortgage-backed securities	$	21,530		1		(296	)		21,235
Corporate bonds		14,000		-		(993	)		13,007
Subordinated notes		4,500		25		-			4,525
U.S. Treasury notes		1,497		-		-			1,497
	$	41,527		26		(1,289	)		40,264

December 31, 2017:
U. S. Government agency mortgage-backed securities	$	7,330		-		(106	)		7,224
Corporate bonds		14,000		-		(196	)		13,804
Subordinated notes		4,500		48		-			4,548
	$	25,830		48		(302	)		25,576

The following table presents the available-for-sale securities’ gross unrealized losses and fair value, aggregated by the length of time the individual securities have been in a continuous loss position as of

September

30,

2018

and

December

31,

2017:

(In thousands)	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
September 30, 2018:
U. S. Government agency mortgage-backed securities	$	16,955		(83	)		4,040		(213	)		20,995		(296	)
Corporate bonds		-		-			13,007		(993	)		13,007		(993	)
	$	16,955		(83	)		17,047		(1,206	)		34,002		(1,289	)

December 31, 2017:
U. S. Government agency mortgage-backed securities	$	4,118		(13	)		3,106		(93	)		7,224		(106	)
Corporate bonds		13,804		(196	)		-		-			13,804		(196	)
	$	17,922		(209	)		3,106		(93	)		21,028		(302	)

September

30,

2018

and

December

31,

2017,

thirteen

seventeen

and

nine

eleven

available-for-sale securities had unrealized losses with an aggregate decline of

3.7%

and

1.4%,

respectively from the amortized cost of those securities.

Based on its quarterly reviews, management believes that

none

of the losses on available-for-sale securities noted above constitute an other-than-temporary impairment (“OTTI”). The noted losses are considered temporary due to market fluctuations in available interest rates on U.S. Government agency debt, mortgage-backed securities issued by U.S. Government agencies, and corporate debt. Management considers the issuers of the securities to be financially sound, the corporate bonds are investment grade, and the collectability of all contractual principal and interest payments is reasonably expected. Since Patriot is

not

more-likely-than-

not

to be required to sell the investments before recovery of the amortized cost basis and does

not

intend to sell the securities at a loss,

none

of the available-for-sale securities noted are considered to be OTTI as of

September

30,

2018.

September

30,

2018

and

December

31,

2017,

available-for-sale securities of

$7.3

million and

$6.7

million, respectively, were pledged to the Federal Reserve Bank of New York (“FRB”), primarily to secure municipal deposits.

The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held at

September

30,

2018

and

December

31,

2017.

The mortgages underlying the mortgage-backed securities are

not

due at a single maturity date. Additionally, these mortgages often are and generally

may

be pre-paid without penalty, creating a degree of uncertainty that such investments can be held until maturity. For convenience, mortgage-backed securities have been included in the summary as a separate line item.

(In thousands)	Amortized Cost								Fair Value
	Due Within 5 years		Due After 5 years through 10 years		Due After 10 years		Total		Due Within 5 years		Due After 5 years through 10 years		Due After 10 years		Total
September 30, 2018:
Corporate bonds	$	-		9,000		5,000		14,000		-		8,397		4,610		13,007
Subordinated notes		-		4,500		-		4,500		-		4,525		-		4,525
U.S. Treasury notes		1,497		-		-		1,497		1,497		-		-		1,497
Available-for-sale securities with single maturity dates		1,497		13,500		5,000		19,997		1,497		12,922		4,610		19,029
U. S. Government agency mortgage-backed securities		6,828		6,297		8,405		21,530		6,817		6,129		8,289		21,235
	$	8,325		19,797		13,405		41,527		8,314		19,051		12,899		40,264

December 31, 2017:
Corporate bonds	$	-		9,000		5,000		14,000		-		8,928		4,876		13,804
Subordinated notes		-		4,500		-		4,500		-		4,548		-		4,548
Available-for-sale securities with single maturity dates		-		13,500		5,000		18,500		-		13,476		4,876		18,352
U. S. Government agency mortgage-backed securities		-		3,200		4,130		7,330		-		3,107		4,117		7,224
	$	-		16,700		9,130		25,830		-		16,583		8,993		25,576

During the year to date period ended

September

30,

2018,

the Company sold

$35.5

million securities acquired in the transaction with Prime Bank, which were sold at the fair value at acquisition date with

recorded gain or loss. The Bank purchased

$15.6

million U.S. Government agency mortgage-backed securities and

$1.5

million U.S. Treasury notes in the

third

quarter of

2018.

There were

sales of the Bank’s available-for-sale securities in the

nine

-month period ended

September

30,

2018.

During the year to date period ended

September

30,

2017,

there were

$13.8

million sales and

$20.6

million purchases of available-for-sale securities. A loss on the sale of available-for-sale securities of

$78,000

was recorded during the

nine

months ended

September

30,

2017.