Fair Value and Interest Rate Risk (Tables)

3 Months Ended

Mar. 31, 2026

Schedule of Financial Assets and Liabilities

The following table provides a comparison of the carrying amounts and estimated fair values of Patriot’s financial assets and liabilities as of March 31, 2026 and December 31, 2025:


(In thousands)		March 31, 2026				December 31, 2025
	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and noninterest bearing balances due from banks	Level 1	$	5,187	$	5,187	$	2,411	$	2,411
Interest-bearing deposits due from banks	Level 1	88,226		88,226		183,980		183,980
Restricted cash	Level 1	15,779		15,779		20,736		20,736
Available-for-sale securities	Level 2	231,701		231,701		212,950		212,950
Available-for-sale securities	Level 3	11,603		11,603		11,727		11,727

Federal Reserve Bank stock	Level 2	3,053		3,053		2,961		2,961
Federal Home Loan Bank stock	Level 2	982		982		679		679
Loans receivable, net	Level 3	751,213		737,490		585,723		571,015
Loans held for sale	Level 2	20,154		20,154		24,513		24,513
Servicing assets	Level 3	651		635		660		652

Accrued interest receivable	Level 2	6,272		6,272		4,869		4,869
Retained beneficial interest	Level 3	425		425		518		518
Interest rate swap receivable	Level 2	44		44		39		39

Financial assets, total		$	1,135,290	$	1,121,551	$	1,051,675	$	1,037,050

Financial Liabilities:
Demand deposits	Level 2	$	82,332	$	82,332	$	106,766	$	106,766
Negotiable order of withdrawal accounts	Level 2	25,311		25,311		24,281		24,281
Savings deposits	Level 2	105,076		105,076		38,036		38,036
Interest bearing DDA	Level 2	308,020		308,020		172,527		172,527
Money market deposits	Level 2	262,850		262,850		191,177		191,177
Time deposits	Level 2	232,930		232,702		266,256		266,262
Brokered deposits	Level 1	31,907		31,952		150,502		144,556

FHLB, FRB and correspondent bank borrowings	Level 2	10,000		10,000		—		—

Subordinated debt	Level 2	8,295		8,078		8,289		8,102
Junior subordinated debt owed to unconsolidated trust	Level 2	8,160		8,160		8,157		8,157

Accrued interest payable	Level 2	166		166		615		615
Interest rate swap liability	Level 2	44		44		39		39
Financial liabilities, total		$	1,075,091	$	1,074,691	$	966,645	$	960,435

Schedule of Financial Assets Measured at Fair Value on a Recurring Basis

The following tables detail the financial assets measured at fair value on a recurring basis and the valuation techniques utilized relative to the fair value hierarchy, as of March 31, 2026 and December 31, 2025:


(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
March 31, 2026:
U. S. Government agency and MBS	$	—	$	223,056	$	—	$	223,056
Corporate bonds	—		1,746		11,603		13,349
Subordinated notes	—		3,731		—		3,731
SBA loan pools	—		3,168		—		3,168
Municipal bonds	—		—		—		—
Available-for-sale securities	$	—	$	231,701	$	11,603	$	243,304

Retained beneficial interest	$	—	$	—	$	425	$	425

Interest rate swap receivable	$	—	$	44	$	—	$	44

Interest rate swap liability	$	—	$	44	$	—	$	44

December 31, 2025:
U. S. Government agency and MBS	$	—	$	204,068	$	—	$	204,068
Corporate bonds	—		1,736		11,727		13,463
Subordinated notes	—		3,752		—		3,752
SBA loan pools	—		3,394		—		3,394
Municipal bonds	—		—		—		—
Available-for-sale securities	$	—	$	212,950	$	11,727	$	224,677

Retained beneficial interest	$	—	$	—	$	518	$	518

Interest rate swap receivable	$	—	$	39	$	—	$	39

Interest rate swap liability	$	—	$	39	$	—	$	39

Schedule of Reconciliation of Level 3 Available-for-sale Securities

The reconciliation of the beginning and ending balances during the three months ended March 31, 2026 and 2025 for Level 3 available-for-sale securities is as follows:


	Three Months Ended March 31,
(In thousands)	2026		2025
Level 3 fair value, beginning of period	$	11,727	$	11,123


Unrealized loss	(124)		(155)

Level 3 fair value, end of period	$	11,603	$	10,968

Schedule of Quantitative Information About Level 3 Fair Value Measurements

The table below presents the valuation methodology and unobservable inputs for level 3 assets measured at fair value on a non-recurring basis as of March 31, 2026 and December 31, 2025:


(In thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
March 31, 2026:
Individually evaluated loans, net	$	21,394	Real Estate Appraisals	Discount for appraisal type	8	%	-	8%

Servicing assets	635		Discounted Cash Flows	Market discount rates	12.75	%	-	12.75%

Retained beneficial interest(a)	425		Discounted Cash Flows	Market discount rates	10	%	-	15%
				Loss projections (% exposure)	10	%	-	20%
				Claim timing (months)	9 months		-	18 months

December 31, 2025:
Individually evaluated loans, net	$	10,394	Real Estate Appraisals	Discount for appraisal type	8	%	-	14%

Servicing assets	652		Discounted Cash Flows	Market discount rates	10	%	-	15%

Retained beneficial interest(a)	518		Discounted Cash Flows	Market discount rates	10	%	-	15%
				Loss projections (% exposure)	10	%	-	20%
				Claim timing (months)	9 months		-	18 months

(a) Loss projections applied in the discounted cash flow analysis ranged from approximately 10% to 20%, with lower loss assumptions applied to stronger credits and higher loss assumptions applied to loans with elevated credit risk, weighted average of approximately 15%. Claim timing assumptions ranged from approximately 9 to 18 months, with shorter timeframes applied to loans expected to resolve more quickly and longer timeframes applied to loans requiring extended workout or recovery periods, weighted average of approximately 12 months.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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