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Note 3 - Available-for-sale Securities
 9 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Note 
3.
Available-for-Sale Securities
 
The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale securities at
September 30, 2020
and
December 31, 2019
are as follows:
 
(In thousands)
  
Amortized
Cost
    
Gross
Unrealized
Gains
    
Gross
Unrealized
(Losses)
    
Fair
Value
  
September 30, 2020:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U. S. Government agency mortgage-backed securities
   $
15,578
     $
139
     $
(12
 )   $
15,705
  
Corporate bonds
    
18,015
      
123
      
(888
 )    
17,250
  
Subordinated notes
    
9,033
      
120
      
(140
 )    
9,013
  
SBA loan pools
    
5,369
      
-
      
(68
 )    
5,301
  
Municipal bonds
    
564
      
-
      
(10
 )    
554
  
    $
48,559
     $
382
     $
(1,118
 )   $
47,823
  
                                 
December 31, 2019:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U. S. Government agency mortgage-backed securities
   $
16,663
     $
90
     $
(68
 )   $
16,685
  
Corporate bonds
    
18,018
      
133
      
(838
 )    
17,313
  
Subordinated notes
    
9,022
      
182
      
-
      
9,204
  
U.S. Treasury notes
    
5,157
      
-
      
(42
 )    
5,115
  
    $
48,860
     $
405
     $
(948
 )   $
48,317
  
 
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, 2020
and
December 31, 2019:
 
(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, 2020:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U. S. Government agency mortgage-backed securities
   $
3,510
     $
(11
 )   $
1,537
     $
(1
 )   $
5,047
     $
(12
 )
Corporate bonds
    
-
      
-
      
13,113
      
(888
 )    
13,113
      
(888
 )
Subordinated notes
    
5,393
      
(140
 )    
-
      
-
      
5,393
      
(140
 )
SBA loan pools
    
961
      
(12
 )    
4,340
      
(56
 )    
5,301
      
(68
 )
Municipal bonds
    
398
      
(10
 )    
-
      
-
      
398
      
(10
 )
    $
10,262
     $
(173
 )   $
18,990
     $
(945
 )   $
29,252
     $
(1,118
 )
                                                 
December 31, 2019:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U. S. Government agency mortgage-backed securities
   $
2,609
     $
(20
 )   $
3,919
     $
(48
 )   $
6,528
     $
(68
 )
Corporate bonds
    
-
      
-
      
13,162
      
(838
 )    
13,162
      
(838
 )
SBA loan pools
    
5,115
      
(42
 )    
-
      
-
      
5,115
      
(42
 )
    $
7,724
     $
(62
 )   $
17,081
     $
(886
 )   $
24,805
     $
(948
 )
 
At
September 30, 2020
and
December 31, 2019,
19
of
34
and
15
of
27
available-for-sale securities had unrealized losses with an aggregate decline of
3.7%
and
3.7%
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 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, subordinated notes, corporate debt, and municipal bonds. 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. The contractual terms of the subordinated notes do
not
permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. 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, 2020.
 
As of
September 30, 2020
and
December 31, 2019,
available-for-sale securities of
$3.7
million and
$4.8
million were pledged primarily to secure municipal deposits, respectively. The securities were pledged to the Federal Reserve Bank (“FRB”).
 
The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of
September 30, 2020
and
December 31, 2019.
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, 2020:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Corporate bonds
   $
4,015
     $
14,000
     $
-
     $
18,015
     $
4,139
     $
13,111
     $
-
     $
17,250
  
Subordinated notes
    
-
      
9,033
      
-
      
9,033
      
-
      
9,013
      
-
      
9,013
  
SBA loan pools
    
-
      
5,369
      
-
      
5,369
      
-
      
5,301
      
-
      
5,301
  
Municipal bonds
    
-
      
564
      
-
      
564
      
-
      
554
      
-
      
554
  
Available-for-sale securities with stated maturity dates
    
4,015
      
28,966
      
-
      
32,981
      
4,139
      
27,979
      
-
      
32,118
  
U. S. Government agency mortgage-backed securities
    
3,423
      
1,622
      
10,533
      
15,578
      
3,437
      
1,649
      
10,619
      
15,705
  
    $
7,438
     $
30,588
     $
10,533
     $
48,559
     $
7,576
     $
29,628
     $
10,619
     $
47,823
  
                                                                 
December 31, 2019:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Corporate bonds
   $
4,018
     $
14,000
     $
-
     $
18,018
     $
4,151
     $
13,162
     $
-
     $
17,313
  
Subordinated notes
    
-
      
9,022
      
-
      
9,022
      
-
      
9,204
      
-
      
9,204
  
SBA loan pools
    
-
      
5,157
      
-
      
5,157
      
-
      
5,115
      
-
      
5,115
  
Available-for-sale securities with stated maturity dates
    
4,018
      
28,179
      
-
      
32,197
      
4,151
      
27,481
      
-
      
31,632
  
U. S. Government agency mortgage-backed securities
    
3,805
      
2,047
      
10,811
      
16,663
      
3,810
      
2,016
      
10,859
      
16,685
  
    $
7,823
     $
30,226
     $
10,811
     $
48,860
     $
7,961
     $
29,497
     $
10,859
     $
48,317
  
 
During the
nine
months ended
September 30, 2020,
the Bank purchased
$4.9
million U.S. Government agency mortgage-backed securities,
$988,000
SBA government guaranteed loan pools securities and
$565,000
municipal bonds. During the
nine
months ended
September 30, 2019,
the Bank purchased
$3.5
million subordinated notes,
$4.0
million corporate bonds and
$5.5
million SBA government guaranteed loan pools securities. There was
no
sale of available-for-sale securities in the
nine
months ended
September 30, 2020
and
2019.