Note 5 - Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note

5

:     Goodwill and Other Intangible Assets

On

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 intangibles and adjustment of cash and contingent considerations. 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.

There were

no

income effects resulting from the recorded measurement period adjustments for the

three

and

six

months ended

June 30, 2019.

The goodwill is all deductible for income taxes over

15

years.

Goodwill is evaluated for impairment annually 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, unanticipated competitive activities, and acts by governments and courts. The Company reported a net loss of

$1.3

million for the

six

months ended

June 30, 2019,

which was primarily associated with a

$2.3

million charge-off on a single commercial loan. The Company performed an interim goodwill test due to the triggering event. At

June 30, 2019,

the Company elected to perform a qualitative assessment to determine if it was more likely than

not

that the fair value of the reporting unit exceeded its carrying value, including goodwill.

After completing our qualitative assessment for the reporting unit during the

second

quarter of

2019,

the Company concluded that it was more likely than

not

that the fair value of the reporting unit exceeded its carrying value, and goodwill was

not

impaired as of

June 30, 2019.