Available-for-sale securities

12 Months Ended

Dec. 31, 2022

At December 31, 2022 and 2021, the amortized cost, gross unrealized gains, gross unrealized losses and approximate fair value of available-for-sale securities was as follows:


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
December 31, 2022:
U. S. Government agency and mortgage-backed securities	$	73,480	$	—	$	(14,434)	$	59,046
Corporate bonds	19,773		7		(5,125)		14,655
Subordinated notes	5,000		—		(398)		4,602
SBA loan pools	6,791		—		(1,073)		5,718
Municipal bonds	561		—		(62)		499
	105,605		7		(21,092)		84,520

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 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 December 31, 2022 and 2021:


(In thousands)	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)
December 31, 2022:
U. S. Government agency and mortgage-backed securities	$	11,126	$	(633)	$	47,920	$	(13,801)	$	59,046	$	(14,434)
Corporate bonds	1,959		(64)		10,934		(5,061)		12,893		(5,125)
Subordinated notes	4,602		(398)		—		—		4,602		(398)
SBA loan pools	1,437		(12)		4,280		(1,061)		5,717		(1,073)
Municipal bonds	—		—		498		(62)		498		(62)
	$	19,124	$	(1,107)	$	63,632	$	(19,985)	$	82,756	$	(21,092)

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)

At December 31, 2022 and 2021, forty-six of forty-seven and thirty-two of thirty-nine available-for-sale securities had unrealized losses with an aggregate depreciation of 20.3% and 2.7% from amortized cost, respectively.

Management believes that none of the losses on available-for-sale securities noted above constitute 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. SBA government guaranteed loan pools securities 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 December 31, 2022.

As of December 31, 2022 and 2021, available-for-sale securities of $30.8 million and $36.6 million were pledged primarily to secure municipal deposits and FHLB borrowing, respectively. The securities were pledged to the FRB and FHLB.

The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held at December 31, 2022 and 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
December 31, 2022:
Corporate bonds	$	3,778	$	15,995	$	—	$	19,773	$	3,721	$	10,934	$	—	$	14,655
Subordinated notes	3,000		2,000		—		5,000		2,830		1,772		—		4,602
SBA loan pools	—		1,449		5,342		6,791		—		1,438		4,280		5,718
Municipal bonds	154		407		—		561		139		360		—		499
Available-for-sale securities with stated maturity dates	6,932		19,851		5,342		32,125		6,690		14,504		4,280		25,474
U. S. Government agency and mortgage-backed securities	—		5,276		68,204		73,480		—		4,129		54,917		59,046
	$	6,932	$	25,127	$	73,546	$	105,605	$	6,690	$	18,633	$	59,197	$	84,520

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