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Derivatives

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

Derivatives Not Designated in Hedge Relationships

Patriot is a party to four interest rate swaps derivatives that are not designated as hedging instruments. Under a program, Patriot will execute interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Patriot executes with a third party, such that Patriot minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties.

Patriot entered into two initial interest rate swaps under the program in November 2018, and another two swaps were entered into in May 2019. As of September 30, 2023 and December 31, 2022, Patriot did not have any cash pledged for collateral on its interest rate swaps.

The Company did not recognize any net gain or loss in other noninterest income on the Consolidated Statements of Operations during the three and nine months ended September 30, 2023 and 2022.

Information about the valuation methods used to measure the fair value of derivatives is provided in Note 13 to the Consolidated Financial Statements.

The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):

(In thousands)			Notional Amount						Maturity (Years)						Fixed Rate						Variable Rate						Fair Value
September 30, 2023
Classified in Other Assets:
3rd party interest rate swap			$	4,652					5.59						5.25		%				1 Mo. SOFR + 1.96%						$	247
3rd party interest rate swap			1,337						5.76						4.38		%				1 Mo. SOFR + 2.00%						125
Classified in Other Liabilities:
Customer interest rate swap			$	4,652					5.59						5.25		%				1 Mo. SOFR + 1.96%						$	(247)
Customer interest rate swap			1,337						5.76						4.38		%				1 Mo. SOFR + 2.00%						(125)
December 31, 2022
Classified in Other Assets:
3rd party interest rate swap			$	4,736					6.30						5.25		%				1 Mo. LIBOR + 1.96%						$	106
3rd party interest rate swap			1,363						6.50						4.38		%				1 Mo. LIBOR + 2.00%						97
Classified in Other Liabilities:
Customer interest rate swap			$	4,736					6.30						5.25		%				1 Mo. LIBOR + 1.96%						$	(106)
Customer interest rate swap			1,363						6.50						4.38		%				1 Mo. LIBOR + 2.00%						(97)

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- References

No definition available.

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- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480237/815-40-50-5

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 815
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//815/tableOfContent

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