Note

Goodwill and Other Intangible Assets

May 10, 2018

the Company completed its acquisition of Prime Bank, a Connecticut bank headquartered in Orange, CT. The closing of the transaction added a new Patriot branch located in the Town of Orange, New Haven County, Connecticut.

The assets acquired and liabilities assumed from Prime Bank were recorded at their fair value as of the closing date of the acquisition. Goodwill of

$2.1

million was recorded at the time of the acquisition, and was adjusted to

$1.7

million as of

December 31, 2018,

primarily due to updating of fair value of the core deposit intangible and adjustment of cash and contingent consideration. The goodwill was further adjusted to

$1.1

million as a result of reducing the estimated amount to be paid pursuant to certain problem loans pending resolution by

$621,000

as of

May 10, 2019.

As of

December 31, 2020,

a purchase price adjustment of

$556,000

was recognized to project expenses on the consolidated statements of operations. The charge represented an adjustment to the earlier estimate of the final purchase price upon final settlement of the litigation related to a dispute over the final purchase price in

2020.

The goodwill is all deductible for income taxes over

years.

Goodwill is evaluated for impairment annually, in the

fourth

quarter of the year, or whenever we identify certain triggering events or circumstances that would more likely than

not

reduce the fair value of a reporting unit below its carrying amount. Events or circumstances that might indicate an interim evaluation is warranted include, among other things, unexpected adverse business conditions, macro and reporting unit specific economic factors, supply costs, unanticipated competitive activities, and acts by governments and courts.

The Company did

not

perform an interim goodwill test in the

first

quarter of

2021

events occurred which would trigger an impairment assessment.