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Note 3 - Available-for-sale Securities | 6 Months Ended
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Jun. 30, 2022
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 June 30, 2022 and December 31, 2021 are as follows:
(In thousands) |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized (Losses) |  |  | Fair Value |
June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U. S. Government agency and mortgage-backed securities |  | $ | 64,261 |  |  | $ | - |  |  | $ | (10,176 | ) |  | $ | 54,085 |
Corporate bonds |  |  | 19,790 |  |  |  | 5 |  |  |  | (4,151 | ) |  |  | 15,644 |
Subordinated notes |  |  | 2,000 |  |  |  | - |  |  |  | (79 | ) |  |  | 1,921 |
SBA loan pools |  |  | 5,567 |  |  |  | - |  |  |  | (745 | ) |  |  | 4,822 |
Municipal bonds |  |  | 562 |  |  |  | - |  |  |  | (63 | ) |  |  | 499 |
|  | $ | 92,180 |  |  | $ | 5 |  |  | $ | (15,214 | ) |  | $ | 76,971 |
December 31, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U. S. Government agency and mortgage-backed securities |  | $ | 67,850 |  |  | $ | 24 |  |  | $ | (1,245 | ) |  | $ | 66,629 |
Corporate bonds |  |  | 17,754 |  |  |  | 118 |  |  |  | (951 | ) |  |  | 16,921 |
Subordinated notes |  |  | 4,608 |  |  |  | 35 |  |  |  | (17 | ) |  |  | 4,626 |
SBA loan pools |  |  | 5,772 |  |  |  | - |  |  |  | (169 | ) |  |  | 5,603 |
Municipal bonds |  |  | 563 |  |  |  | 1 |  |  |  | (2 | ) |  |  | 562 |
|  | $ | 96,547 |  |  | $ | 178 |  |  | $ | (2,384 | ) |  | $ | 94,341 |
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 June 30, 2022 and December 31, 2021:
(In thousands) |  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
|  | Fair Value |  |  | Unrealized (Loss) |  |  | Fair Value |  |  | Unrealized (Loss) |  |  | Fair Value |  |  | Unrealized (Loss) |
June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U. S. Government agency and mortgage-backed securities |  | $ | 46,311 |  |  | $ | (8,388 | ) |  | $ | 7,771 |  |  | $ | (1,788 | ) |  | $ | 54,082 |  |  | $ | (10,176 | )
Corporate bonds |  |  | 14,888 |  |  |  | (4,151 | ) |  |  | - |  |  |  | - |  |  |  | 14,888 |  |  |  | (4,151 | )
Subordinated notes |  |  | 1,921 |  |  |  | (79 | ) |  |  | - |  |  |  | - |  |  |  | 1,921 |  |  |  | (79 | )
SBA loan pools |  |  | 2,336 |  |  |  | (361 | ) |  |  | 2,486 |  |  |  | (384 | ) |  |  | 4,822 |  |  |  | (745 | )
Municipal bonds |  |  | 499 |  |  |  | (63 | ) |  |  | - |  |  |  | - |  |  |  | 499 |  |  |  | (63 | )
|  | $ | 65,955 |  |  | $ | (13,042 | ) |  | $ | 10,257 |  |  | $ | (2,172 | ) |  | $ | 76,212 |  |  | $ | (15,214 | )
December 31, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U. S. Government agency and mortgage-backed securities |  | $ | 60,606 |  |  | $ | (1,196 | ) |  | $ | 1,610 |  |  | $ | (49 | ) |  | $ | 62,216 |  |  | $ | (1,245 | )
Corporate bonds |  |  | 15,042 |  |  |  | (951 | ) |  |  | - |  |  |  | - |  |  |  | 15,042 |  |  |  | (951 | )
Subordinated notes |  |  | - |  |  |  | - |  |  |  | 1,092 |  |  |  | (17 | ) |  |  | 1,092 |  |  |  | (17 | )
SBA loan pools |  |  | 5,603 |  |  |  | (169 | ) |  |  | - |  |  |  | - |  |  |  | 5,603 |  |  |  | (169 | )
Municipal bonds |  |  | 406 |  |  |  | (2 | ) |  |  | - |  |  |  | - |  |  |  | 406 |  |  |  | (2 | )
|  | $ | 81,657 |  |  | $ | (2,318 | ) |  | $ | 2,702 |  |  | $ | (66 | ) |  | $ | 84,359 |  |  | $ | (2,384 | )
As of June 30, 2022 and December 31, 2021, thirty-eight of thirty-nine and thirty-two of thirty-nine available-for-sale securities had unrealized losses with an aggregate decline of 16.6% and 2.7% 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. Securities under the U.S. Small Business Administration (“SBA”) government guaranteed loan pools program 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 June 30, 2022. As of June 30, 2022 and December 31, 2021, available-for-sale securities of $30.6 million and $36.6 million, respectively, were pledged to the Federal Reserve Bank (“FRB”). The securities were pledged primarily to secure borrowings from the Federal Home Loan Bank and municipal deposits. The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of June 30, 2022 and December 31, 2021. 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 |
June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 7,790 |  |  | $ | 12,000 |  |  | $ | - |  |  | $ | 19,790 |  |  | $ | 6,761 |  |  | $ | 8,883 |  |  | $ | - |  |  | $ | 15,644 |
Subordinated notes |  |  | - |  |  |  | 2,000 |  |  |  | - |  |  |  | 2,000 |  |  |  | - |  |  |  | 1,921 |  |  |  | - |  |  |  | 1,921 |
SBA loan pools |  |  | - |  |  |  | - |  |  |  | 5,567 |  |  |  | 5,567 |  |  |  | - |  |  |  | - |  |  |  | 4,822 |  |  |  | 4,822 |
Municipal bonds |  |  | - |  |  |  | 562 |  |  |  | - |  |  |  | 562 |  |  |  | - |  |  |  | 499 |  |  |  | - |  |  |  | 499 |
Available-for-sale securities with stated maturity dates |  |  | 7,790 |  |  |  | 14,562 |  |  |  | 5,567 |  |  |  | 27,919 |  |  |  | 6,761 |  |  |  | 11,303 |  |  |  | 4,822 |  |  |  | 22,886 |
U. S. Government agency and mortgage-backed securities |  |  | 9,986 |  |  |  | 406 |  |  |  | 53,869 |  |  |  | 64,261 |  |  |  | 8,184 |  |  |  | 391 |  |  |  | 45,510 |  |  |  | 54,085 |
|  | $ | 17,776 |  |  | $ | 14,968 |  |  | $ | 59,436 |  |  | $ | 92,180 |  |  | $ | 14,945 |  |  | $ | 11,694 |  |  | $ | 50,332 |  |  | $ | 76,971 |
December 31, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 17,754 |  |  | $ | - |  |  | $ | - |  |  | $ | 17,754 |  |  | $ | 16,921 |  |  | $ | - |  |  | $ | - |  |  | $ | 16,921 |
Subordinated notes |  |  | - |  |  |  | 4,608 |  |  |  | - |  |  |  | 4,608 |  |  |  | - |  |  |  | 4,626 |  |  |  | - |  |  |  | 4,626 |
SBA loan pools |  |  | - |  |  |  | - |  |  |  | 5,772 |  |  |  | 5,772 |  |  |  | - |  |  |  | - |  |  |  | 5,603 |  |  |  | 5,603 |
Municipal bonds |  |  | - |  |  |  | 563 |  |  |  | - |  |  |  | 563 |  |  |  | - |  |  |  | 562 |  |  |  | - |  |  |  | 562 |
Available-for-sale securities with stated maturity dates |  |  | 17,754 |  |  |  | 5,171 |  |  |  | 5,772 |  |  |  | 28,697 |  |  |  | 16,921 |  |  |  | 5,188 |  |  |  | 5,603 |  |  |  | 27,712 |
U. S. Government agency and mortgage-backed securities |  |  | 13,876 |  |  |  | - |  |  |  | 53,974 |  |  |  | 67,850 |  |  |  | 13,835 |  |  |  | - |  |  |  | 52,794 |  |  |  | 66,629 |
|  | $ | 31,630 |  |  | $ | 5,171 |  |  | $ | 59,746 |  |  | $ | 96,547 |  |  | $ | 30,756 |  |  | $ | 5,188 |  |  | $ | 58,397 |  |  | $ | 94,341 |
During the six months ended June 30, 2022, the Bank purchased $2.0 million corporate bonds and $1.0 million subordinated notes. During the six months ended June 30, 2021, the Bank purchased $61.7 million U.S. Government agency mortgage-backed securities, $14.2 million Corporate bonds, and $5.9 million SBA government guaranteed loan pools securities. There was no sale of available-for-sale securities in the three and six months ended June 30, 2022. During the three and six months ended June 30, 2021, the Bank sold $4.3 million U.S. Government agency mortgage-backed securities, $14.0 million Corporate bonds, and $4.5 million Subordinated notes, and recognized a net gain on sale of securities of $93,000.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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