Note 3 - Available-for-sale Securities

6 Months Ended

Jun. 30, 2019

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,

 

2019

and

December 31, 2018

are as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
June 30, 2019:
U. S. Government agency mortgage-backed securities	$	19,211		110		(72	)		19,249
Corporate bonds		17,000		93		(1,028	)		16,065
Subordinated notes		6,903		126		-			7,029
U.S. Treasury notes		1,492		4		-			1,496
	$	44,606		333		(1,100	)		43,839
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

June 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)
June 30, 2019:
U. S. Government agency mortgage-backed securities	$	2,457		(17	)		3,661		(55	)		6,118		(72	)
Corporate bonds		-		-			12,972		(1,028	)		12,972		(1,028	)
	$	2,457		(17	)		16,633		(1,083	)		19,090		(1,100	)
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	)

At

June 30, 

2019

and

December 31, 2018,

ten

of

nineteen

and

ten

of

sixteen

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

5.4%

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. 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, 

2019.

At

June 30, 2019

and

December 31, 2018,

available-for-sale securities of

$6.7

million and

$7.0

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

June 30, 2019

and

December 31, 2018,

$5.2

million and

$5.5

million were pledged to the FRB of New York, and

$1.5

million 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

June 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
June 30, 2019:
Corporate bonds	$	-		12,000		5,000		17,000		-		11,504		4,561		16,065
Subordinated notes		-		6,903		-		6,903		-		7,029		-		7,029
U.S. Treasury notes		1,492		-		-		1,492		1,496		-		-		1,496
Available-for-sale securities with single maturity dates		1,492		18,903		5,000		25,395		1,496		18,533		4,561		24,590
U. S. Government agency mortgage-backed securities		9,175		2,308		7,728		19,211		9,191		2,263		7,795		19,249
	$	10,667		21,211		12,728		44,606		10,687		20,796		12,356		43,839
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 securities with single maturity 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

six

-month period ended

June 30, 

2019,

the Bank purchased

$2.4

million subordinated notes and

$3.0

million corporate bonds. There were

no

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

six

-month period ended

June 30, 

2019.

During the year to date period ended

June 30, 2018,

the Company sold

$35.5

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

no

recorded gain or loss. Other than that, there were

no

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

six

-month period ended

June 30, 2018.