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,

2019

and

December 31, 2018

are as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
September 30, 2019:
U. S. Government agency mortgage-backed securities	$	18,137	$	102	$	(56	)	$	18,183
Corporate bonds		18,019		62		(1,218	)		16,863
Subordinated notes		8,018		174		-			8,192
SBA loan pools		5,369		-		(49	)		5,320
U.S. Treasury notes		1,496		3		-			1,499
	$	51,039	$	341	$	(1,323	)	$	50,057

December 31, 2018:
U. S. Government agency mortgage-backed securities	$	20,626	$	43	$	(196	)	$	20,473
Corporate bonds		14,000		-		(1,026	)		12,974
Subordinated notes		4,500		64		-			4,564
U.S. Treasury notes		1,484		1		-			1,485
	$	40,610	$	108	$	(1,222	)	$	39,496

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,

2019

and

December 31, 2018:

(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, 2019:
U. S. Government agency mortgage-backed securities	$	125	$	-		$	4,046	$	(56	)	$	4,171	$	(56	)
Corporate bonds		-		-			12,782		(1,218	)		12,782		(1,218	)
SBA loan pools		5,320		(49	)		-		-			5,320		(49	)
	$	5,445	$	(49	)	$	16,828	$	(1,274	)	$	22,273	$	(1,323	)

December 31, 2018:
U. S. Government agency mortgage-backed securities	$	8,024	$	(38	)	$	5,422	$	(158	)	$	13,446	$	(196	)
Corporate bonds		-		-			12,974		(1,026	)		12,974		(1,026	)
	$	8,024	$	(38	)	$	18,396	$	(1,184	)	$	26,420	$	(1,222	)

September 30,

2019

and

December 31, 2018,

and

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

5.6%

and

4.4%

from the amortized cost of those securities, respectively.

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. SBA government guaranteed loan pools securities were purchased at a premium and the impairment was attributable primarily to increased prepayment speeds. The timely payment of principal and interest on these securities is guaranteed by the U.S. Government agency. 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,

2019.

September 30, 2019

and

December 31, 2018,

available-for-sale securities of

$5.0

million and

$7.0

million were pledged primarily to secure municipal deposits, respectively. As of

September 30, 2019

and

December 31, 2018,

$5.0

million and

$5.5

million were pledged to the FRB of New York, and

and

$1.5

million were pledged to the St. Louis Fed, respectively.

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,

2019

and

December 31, 2018.

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, 2019:
Corporate bonds	$	4,019	$	14,000	$	-	$	18,019	$	4,081	$	12,782	$	-	$	16,863
Subordinated notes		1,407		6,611		-		8,018		1,426		6,766		-		8,192
SBA loan pools		-		5,369		-		5,369		-		5,320		-		5,320
U.S. Treasury notes		1,496		-		-		1,496		1,499		-		-		1,499
Available-for-sale securities wi th stated maturity dates		6,922		25,980		-		32,902		7,006		24,868		-		31,874
U. S. Government agency mortgage-backed securities		8,805		2,177		7,155		18,137		8,813		2,137		7,233		18,183
	$	15,727	$	28,157	$	7,155	$	51,039	$	15,819	$	27,005	$	7,233	$	50,057

December 31, 2018:
Corporate bonds	$	-	$	9,000	$	5,000	$	14,000	$	-	$	8,537	$	4,437	$	12,974
Subordinated notes		-		4,500		-		4,500		-		4,564		-		4,564
U.S. Treasury notes		1,484		-		-		1,484		1,485		-		-		1,485
Available-for-sale securit ies with stated m aturity dates		1,484		13,500		5,000		19,984		1,485		13,101		4,437		19,023
U. S. Government agency mortgage-backed securities		6,842		5,668		8,116		20,626		6,844		5,530		8,099		20,473
	$	8,326	$	19,168	$	13,116	$	40,610	$	8,329	$	18,631	$	12,536	$	39,496

During the

nine

-month period ended

September 30,

2019,

the Bank purchased

$3.5

million subordinated notes and

$4.0

million corporate bonds, and

$5.5

million SBA government guaranteed loan pools. There were

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

nine

-month period ended

September 30,

2019.

During the year to date period ended

September 30, 2018,

the Bank purchased

$15.6

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

$1.5

million U.S. Treasury notes, and

$35.5

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

recorded gain or loss.