10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to            

Commission file number 000-29599

PATRIOT NATIONAL BANCORP, INC.

(Exact name of registrant as specified in its charter)

Connecticut	06-1559137
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
900 Bedford Street, Stamford, Connecticut	06901
(Address of principal executive offices)	(Zip Code)

(203) 252-5900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐    No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS: 

Indicate by check mark whether the registrant has filed all documents and reports to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes   ☐    No   ☐ 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	PNBK	NASDAQ Global Market

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 14, 2021, there were 3,946,576 shares of the registrant’s common stock outstanding.

1

Table of Contents

Table of Contents	2
PART I- FINANCIAL INFORMATION	3
Item 1: Consolidated Financial Statements	3
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Operations (Unaudited)	4
Consolidated Statements of Comprehensive (Loss) Income  (Unaudited)	5
Consolidated Statements of Shareholder's Equity (Unaudited)	6
Consolidated Statements of Cash Flows (Unaudited)	7
Notes to Consolidated Financial Statements (Unaudited)	9
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3: Quantitative and Qualitative Disclosures about Market Risk	54
Item 4: Disclosure Controls and Procedures	56
PART II - OTHER INFORMATION	57
Item 1:          Legal Proceedings	57
Item 5:          Other Information	57
Item 6:          Exhibits	58
SIGNATURES	59

2

PART I- FINANCIAL INFORMATION

Item 1: Consolidated Financial Statements

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

	March 31,			December 31,
(In thousands, except share data)	2021			2020
Assets
Cash and due from banks:
Noninterest bearing deposits and cash	$	2,593		$	3,006
Interest bearing deposits		81,681			31,630
Total cash and cash equivalents		84,274			34,636
Investment securities:
Available-for-sale securities, at fair value		57,893			49,262
Other investments, at cost		4,450			4,450
Total investment securities		62,343			53,712
Federal Reserve Bank stock, at cost		2,744			2,783
Federal Home Loan Bank stock, at cost		4,503			4,503
Loans receivable (net of allowance for loan losses: 2021: $10,426 and 2020: $10,584)		666,250			719,596
Loans held for sale		2,829			1,217
Accrued interest and dividends receivable		6,270			6,620
Premises and equipment, net		33,128			33,423
Other real estate owned		1,216			1,906
Deferred tax asset, net		11,274			11,496
Goodwill		1,107			1,107
Core deposit intangible, net		331			343
Other assets		9,919			9,387
Total assets	$	886,188		$	880,729
Liabilities
Deposits:
Noninterest bearing deposits	$	173,520		$	158,676
Interest bearing deposits		519,358			526,980
Total deposits		692,878			685,656
Federal Home Loan Bank and correspondent bank borrowings		90,000			90,000
Senior notes, net		11,946			11,927
Subordinated debt, net		9,789			9,782
Junior subordinated debt owed to unconsolidated trust, net		8,112			8,110
Note payable		943			994
Advances from borrowers for taxes and insurance		2,158			3,786
Accrued expenses and other liabilities		6,425			7,255
Total liabilities		822,251			817,510
Commitments and Contingencies
Shareholders' equity
Preferred stock, no par value; 1,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $.01 par value, 100,000,000 shares authorized; As of March 31, 2021: 4,018,013 shares issued; 3,944,272 shares outstanding; As of December 31, 2020: 4,017,313 shares issued; 3,943,572 shares outstanding;		106,363			106,329
Accumulated deficit		(41,738	)		(42,592	)
Accumulated other comprehensive loss		(688	)		(518	)
Total shareholders' equity		63,937			63,219
Total liabilities and shareholders' equity	$	886,188		$	880,729

See Accompanying Notes to Consolidated Financial Statements.

3

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended March 31,
(In thousands, except per share amounts)	2021		2020
Interest and Dividend Income
Interest and fees on loans	$	7,743	$	10,033
Interest on investment securities		310		416
Dividends on investment securities		34		138
Other interest income		24		135
Total interest and dividend income		8,111		10,722
Interest Expense
Interest on deposits		785		3,200
Interest on Federal Home Loan Bank borrowings		733		697
Interest on senior debt		229		229
Interest on subordinated debt		234		268
Interest on note payable and other		4		5
Total interest expense		1,985		4,399
Net interest income		6,126		6,323
Provision for Loan Losses		-		804
Net interest income after provision for loan losses		6,126		5,519
Non-interest Income
Loan application, inspection and processing fees		63		53
Deposit fees and service charges		65		114
Gains on sales of loans		94		12
Rental income		130		131
Other income		90		111
Total non-interest income		442		421
Non-interest Expense
Salaries and benefits		2,216		3,861
Occupancy and equipment expense		920		949
Data processing expense		350		390
Professional and other outside services		852		784
Project expenses, net		10		94
Advertising and promotional expense		62		147
Loan administration and processing expense		24		24
Regulatory assessments		228		440
Insurance expense, net		60		70
Communications, stationary and supplies		145		120
Other operating expense		528		492
Total non-interest expense		5,395		7,371
Income (loss) before income taxes		1,173		(1,431	)
Provision (benefit) for income taxes		319		(359	)
Net income (loss)	$	854	$	(1,072	)
Basic earnings (loss) per share	$	0.22	$	(0.27	)
Diluted earnings (loss) per share	$	0.22	$	(0.27	)

See Accompanying Notes to Consolidated Financial Statements.

4

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In thousands)	Three Months Ended March 31,
	2021			2020
Net income (loss)	$	854		$	(1,072	)
Other comprehensive loss
Unrealized holding loss on securities		(229	)		(1,808	)
Income tax effect		59			466
Total other comprehensive loss		(170	)		(1,342	)
Comprehensive income (loss)	$	684		$	(2,414	)

See Accompanying Notes to Consolidated Financial Statements.

5

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

	Three Months Ended March 31, 2021
(In thousands, except shares)	Number of Shares		Common Stock		Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Total
Balance at December 31, 2020		3,943,572	$	106,329	$	(42,592	)	$	(518	)	$	63,219
Comprehensive income:
Net income		-		-		854			-			854
Unrealized holding loss on available-for-sale securities, net of tax		-		-		-			(170	)		(170	)
Total comprehensive income		-		-		854			(170	)		684
Share-based compensation expense		-		34		-			-			34
Vesting of restricted stock		700		-		-			-			-
Balance at March 31, 2021		3,944,272	$	106,363	$	(41,738	)	$	(688	)	$	63,937

	Three Month Ended March 31, 2020
(In thousands, except shares)	Number of Shares		Common Stock		Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Total
Balance at December 31, 2019		3,930,669	$	106,170	$	(38,773	)	$	(403	)	$	66,994
Comprehensive (loss) income:
Net loss		-		-		(1,072	)		-			(1,072	)
Unrealized holding loss on available-for-sale securities, net of tax		-		-		-			(1,342	)		(1,342	)
Total comprehensive loss		-		-		(1,072	)		(1,342	)		(2,414	)
Share-based compensation expense		-		43		-			-			43
Vesting of restricted stock		2,172		-		-			-			-
Balance at March 31, 2020		3,932,841	$	106,213	$	(39,845	)	$	(1,745	)	$	64,623

See Accompanying Notes to Consolidated Financial Statements.

6

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)	Three Months Ended March 31,
	2021			2020
Cash Flows from Operating Activities:
Net income (loss)	$	854		$	(1,072	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization and accretion of investment premiums and discounts, net		89			44
Amortization and accretion of purchase loan premiums and discounts		285			190
Amortization of debt issuance costs		28			28
Amortization of core deposit intangible		12			18
Amortization of servicing assets of sold SBA loans		6			5
Provision for loan losses		-			804
Depreciation and amortization		384			392
Share-based compensation		34			43
Decrease (increase) in deferred income taxes		281			(390	)
Originations of SBA loans held for sale		(2,805	)		(2,566	)
Proceeds from sale of SBA loans held for sale		1,006			144
Gains on sale of SBA loans held for sale, net		(94	)		(12	)
Net gain on sale of other real estate owned		(2	)		-
Changes in assets and liabilities:
(Increase) decrease in accrued interest and dividends receivable		350			(198	)
Increase in other assets		(1,025	)		(564	)
Decrease in accrued expenses and other liabilities		(237	)		(1,179	)
Net cash used in operating activities		(834	)		(4,313	)
Cash Flows from Investing Activities:
Proceeds from maturity or sales on available-for-sale securities		1,886			-
Principal repayments on available-for-sale securities		3,066			1,635
Purchases of available-for-sale securities		(13,901	)		-
Redemption of Federal Reserve Bank stock		39			-
Decrease in originated loans receivable, net		69,366			11,873
Purchases of loans receivable		(16,041	)		(19,025	)
Purchases of premises and equipment		(178	)		(3	)
Proceeds from sale of other real estate owned		692			-
Net cash provided by (used in) investing activities		44,929			(5,520	)
Cash Flows from Financing Activities:
Increase in deposits, net		7,222			33,679
Repayments of FHLB borrowings		-			(10,000	)
Principal repayments of note payable		(51	)		(50	)
Decrease in advances from borrowers for taxes and insurance		(1,628	)		(1,044	)
Net cash provided by financing activities		5,543			22,585
Net increase in cash and cash equivalents		49,638			12,752
Cash and cash equivalents at beginning of period		34,636			39,404
Cash and cash equivalents at end of period	$	84,274		$	52,156

7

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued)

(In thousands)	Three Months Ended March 31,
	2021			2020
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	1,836		$	4,781
Cash paid for income taxes, net	$	47		$	3
Non-cash transactions:
(Decrease) increase in premises and equipment	$	(130	)	$	133
Reclass of premises and equipment to implementation cost	$	52		$	-
Decrease (increase) in accrued expense and other liabilities	$	78		$	(133	)
Transfers of SBA loans held for sale to loans receivable	$	281		$	280
Operating lease right-of-use assets	$	-		$	(57	)
Operating lease liabilities	$	-		$	57
Capitalized servicing assets	$	17		$	2
Increase in interest rate swaps assets	$	396		$	601
Increase in interest rate swaps liabilities	$	(396	)	$	(601	)

See Accompanying Notes to Consolidated Financial Statements.

8

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 1. Basis of Financial Statement Presentation

The accompanying unaudited interim condensed consolidated financial statements of Patriot National Bancorp, Inc. (the “Company”) and its wholly-owned subsidiaries Patriot Bank, N.A. (the “Bank”), Patriot National Statutory Trust I and PinPat Acquisition Corporation (collectively, “Patriot”), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included on the Annual Report on Form 10-K for the year ended December 31, 2020.

The consolidated balance sheet at December 31, 2020 presented herein has been derived from the audited consolidated financial statements of the Company at that date, but does not include all of the information and footnotes required by US GAAP for complete financial statements.

The preparation of consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates. Management has identified accounting for the allowance for loan and lease losses, the analysis and valuation of its investment securities, the valuation of deferred tax assets, the impairment of goodwill, the valuation of derivatives, and the valuation of servicing assets as certain of the Company’s more significant accounting policies and estimates, in that they are critical to the presentation of the Company’s consolidated financial condition and results of operations. As they concern matters that are inherently uncertain, these estimates require management to make subjective and complex judgments in the preparation of the Company’s consolidated financial statements.

Reclassifications:

Certain amounts appearing in the financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassifications had no effect on net income or stockholders’ equity as previously reported.

The information furnished reflects, in the opinion of management, all normal recurring adjustments necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations that may be expected for the remainder of 2021.

COVID-19 Impact

In March 2020, the World Health Organization declared novel coronavirus disease 2019 ("COVID-19") as a global pandemic. The COVID-19 pandemic has negatively impacted the global and U.S. economies. Many businesses in the U.S., including those in the markets we serve, were required to close, causing a significant increase in unemployment and loss of revenue.

The consolidated financial statements reflect estimates and assumptions that affect the reported amounts of assets and liabilities, including the amount of the allowance for loan losses. The assumptions and estimates used in the financial statements were impacted by the COVID-19 pandemic.

We are unable to estimate the full impact of COVID-19 on our business and operations at this time. The extent of such impact will depend on future developments, which are highly uncertain, including when COVID-19 can be controlled and abated and when and how the economy may be reopened. The pandemic could cause us to experience higher credit losses in our loan portfolio, impairment of our goodwill, additional valuation allowance associated with our net deferred tax assets, reduced demand for our products and services, or other negative impacts on our financial position, results of operations, and prospects.

On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief and Economic Security (“CARES”) Act in response to the coronavirus pandemic. This legislation aims at providing relief for individuals and businesses that have been negatively impacted by the coronavirus pandemic.

9

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

On August 3, 2020, the Federal Financial Institutions Council issued a joint statement, encouraging financial institutions to consider prudent accommodation options to mitigate losses for the borrower and financial institution beyond the initial accommodation period. The joint statement specifically encourages financial institutions to provide consumers with available options for repaying missed payments at the end of their accommodation to avoid delinquencies, as well as options for changes to terms to support sustainable and affordable payments for the long term. These considerations should also include prudent risk management practices at the financial institution based on the credit risk of the borrower. Patriot is actively working with its customers to address any further accommodation needs while carefully evaluating the associated credit risk of the borrowers.

The Federal Reserve System (the “Fed”) has taken, and continues to take, steps to support markets and the economy. Stimulus from Washington and the federal government, in spite of political hurdles and a change in presidential administrations, has also provided meaningful support. The new Biden administration has adopted another $1.9 trillion stimulus package in March 2021. The market expects the Fed Funds rate to remain at the effective lower bound near zero for an extended period of time. Henceforth, the Fed appears to be willing to let inflation run above the 2% target level, even when unemployment is very low, before removing accommodation.

Note 2. Accounting Policies

Please refer to the summary of Significant Accounting Policies included in the Company’s 2020 Annual Report on Form 10-K for a list of all policies in effect as of December 31, 2020. The below summary is intended to provide updates or new policies required as a result of a new accounting standard or a change to the Company’s operations or assets that require a new or amended policy.

Employee Retention Credit

The CARES Act also provided for an employee retention credit (“Employee Retention Credit”), which is a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The tax credit is equal to 70% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee throughout the year. The Company adopted a policy to recognize the employee retention credit when earned and to recognize the credit as a reduction to compensation and benefits expense on the Company’s consolidated statements of operations. Accordingly, the Company recorded an employee retention credit of $843,000 in the first quarter of 2021. The Company is currently in the process of filing for this credit.

Recently Adopted and Issued Accounting Standards

Accounting Standards Adopted During 2021

Effective January 1, 2021, the following new Accounting Standards Updates (ASU) were adopted by the Company:

ASU 2019-12

ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes.” The guidance issued in this update simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences. ASU 2019-12 also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The ASU is effective for the Company on January 1, 2021. The adoption of ASU 2019-12 did not have any impact on our consolidated financial statements.

10

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Accounting Standards Issued But Not Yet Adopted

ASU 2016-13

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. The ASU changes the methodology for measuring credit losses on financial instruments measured at amortized cost to a current expected loss (“CECL”) model. Under the CECL model, entities will estimate credit losses over the entire contractual term of a financial instrument from the date of initial recognition of the instrument. The ASU also changes the existing impairment model for available-for-sale debt securities. In cases where there is neither the intent nor a more-likely-than-not requirement to sell the debt security, an entity will record credit losses as an allowance rather than a direct write-down of the amortized cost basis. Additionally, ASU 2016-13 notes that credit losses related to available-for-sale debt securities and purchased credit impaired loans should be recorded through an allowance for credit losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018. In November 2019, the FASB issued ASU 2019-10, which amends the effective date of ASC 326 for smaller reporting companies, as defined by the SEC, and other non-SEC reporting entities, and delays the effective date to fiscal years beginning after December 31, 2022, including interim periods within those fiscal periods. As the Company is a small reporting company, the delay will be applicable to the Company. Management is currently evaluating the impact that the standard will have on its consolidated financial statements.

ASU Update 2020-02

In January 2020, the FASB issued ASU No. 2020-02, “Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).” This ASU adds and amends SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No. 119, related to the new credit losses standard, and comments by the SEC staff related to the revised effective date of the new leases standard. This ASU is effective upon issuance. See the discussion regarding the adoption of ASU 2016-13 above.

ASU Update 2020-03

In March 2020, the FASB issued ASU No. 2020-3, “Codification Improvements to Financial Instruments.” This ASU clarifies various financial instruments topics, including the CECL standard issued in 2016. Amendments related to ASU 2016-13 for entities that have not yet adopted that guidance are effective upon adoption of the amendments in ASU 2016-13. Early adoption is not permitted before an entity’s adoption of ASU 2016-13. Other amendments are effective upon issuance of this ASU. See the discussion regarding the adoption of ASU 2016-13 above.

ASU Update 2020-04

In March 2020, the FASB issued ASU No. 2020-4, "Reference Rate Reform". This ASU provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. As of December 31, 2020, the Company has not made any elections under ASU 2020-04 but continues to evaluate the impact of reference rate reform and which optional expedients and exceptions might be elected.

11

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 3. Available-for-Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale securities at March 31, 2021 and December 31, 2020 are as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2021:
U. S. Government agency mortgage-backed securities	$	22,867	$	109	$	(289	)	$	22,687
Corporate bonds		18,013		272		(952	)		17,333
Subordinated notes		9,040		115		(6	)		9,149
SBA loan pools		8,336		-		(171	)		8,165
Municipal bonds		564		-		(5	)		559
	$	58,820	$	496	$	(1,423	)	$	57,893
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	16,719	$	131	$	(17	)	$	16,833
Corporate bonds		18,014		260		(984	)		17,290
Subordinated notes		9,036		97		(128	)		9,005
SBA loan pools		5,627		-		(60	)		5,567
Municipal bonds		564		3		-			567
	$	49,960	$	491	$	(1,189	)	$	49,262

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 March 31, 2021 and December 31, 2020:

(In thousands)	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
March 31, 2021:
U. S. Government agency mortgage-backed securities	$	14,055	$	(288	)	$	77	$	(1	)	$	14,132	$	(289	)
Corporate bonds		-		-			13,047		(952	)		13,047		(952	)
Subordinated notes		999		(1	)		1,104		(5	)		2,103		(6	)
SBA loan pools		4,458		(127	)		3,707		(44	)		8,165		(171	)
Municipal bonds		403		(5	)		-		-			403		(5	)
	$	19,915	$	(421	)	$	17,935	$	(1,002	)	$	37,850	$	(1,423	)
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	5,797	$	(14	)	$	1,476	$	(3	)	$	7,273	$	(17	)
Corporate bonds		-		-			13,015		(984	)		13,015		(984	)
Subordinated notes		1,878		(122	)		1,103		(6	)		2,981		(128	)
SBA loan pools		1,533		(12	)		4,034		(48	)		5,567		(60	)
	$	9,208	$	(148	)	$	19,628	$	(1,041	)	$	28,836	$	(1,189	)

At March 31, 2021 and December 31, 2020, 26 of 41 and 22 of 37 available-for-sale securities had unrealized losses with an aggregate decline of 3.6% and 4.0% from the amortized cost of those securities, respectively.

12

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Based on its quarterly reviews, management believes that none of the losses on available-for-sale securities noted above constitute 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, 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 March 31, 2021.

As of March 31, 2021 and December 31, 2020, available-for-sale securities of $5.6 million and $6.1 million were pledged primarily to secure municipal deposits, respectively. The securities were pledged to the Federal Reserve Bank (“FRB”).

The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of March 31, 2021 and December 31, 2020. 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
March 31, 2021:
Corporate bonds	$	4,013	$	14,000	$	-	$	18,013	$	4,285	$	13,048	$	-	$	17,333
Subordinated notes		2,000		7,040		-		9,040		2,003		7,146		-		9,149
SBA loan pools		1,735		3,468		3,133		8,336		1,715		3,427		3,023		8,165
Municipal bonds		-		564		-		564		-		559		-		559
Available-for-sale securities with stated maturity dates		7,748		25,072		3,133		35,953		8,003		24,180		3,023		35,206
U. S. Government agency mortgage-backed securities		1,035		1,343		20,489		22,867		1,036		1,367		20,284		22,687
	$	8,783	$	26,415	$	23,622	$	58,820	$	9,039	$	25,547	$	23,307	$	57,893
December 31, 2020:
Corporate bonds	$	4,014	$	14,000	$	-	$	18,014	$	4,274	$	13,016	$	-	$	17,290
Subordinated notes		2,000		7,036		-		9,036		2,003		7,002		-		9,005
SBA loan pools		1,921		3,706		-		5,627		1,899		3,668		-		5,567
Municipal bonds		-		564		-		564		-		567		-		567
Available-for-sale securities with stated maturity dates		7,935		25,306		-		33,241		8,176		24,253		-		32,429
U. S. Government agency mortgage-backed securities		3,364		1,466		11,889		16,719		3,363		1,491		11,979		16,833
	$	11,299	$	26,772	$	11,889	$	49,960	$	11,539	$	25,744	$	11,979	$	49,262

During the three months ended March 31, 2021, the Bank purchased $10.9 million U.S. Government agency mortgage-backed securities and $3.0 million SBA government guaranteed loan pools securities. During the three months ended March 31, 2020, the Bank did not purchase any available-for-sale securities. There was no sale of available-for-sale securities in the three months ended March 31, 2021 and 2020.

13

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 4. Loans Receivable and Allowance for Loan and Lease Losses

As of March 31, 2021 and December 31, 2020, loans receivable, net, consisted of the following:

	March 31,			December 31,
(In thousands)	2021			2020
Loan portfolio segment:
Commercial Real Estate	$	261,461		$	282,378
Residential Real Estate		147,947			153,851
Commercial and Industrial		138,966			144,297
Consumer and Other		56,485			67,635
Construction		55,523			66,984
Construction to Permanent - CRE		16,294			15,035
Loans receivable, gross		676,676			730,180
Allowance for loan and lease losses		(10,426	)		(10,584	)
Loans receivable, net	$	666,250		$	719,596

Patriot's lending activities are conducted principally in Fairfield and New Haven Counties in Connecticut and Westchester County in New York, and the five Boroughs of New York City. Patriot originates commercial real estate loans, commercial business loans, a variety of consumer loans, and construction loans, and has purchased residential loans since 2016. All commercial and residential real estate loans are collateralized primarily by first or second mortgages on real estate. The ability and willingness of borrowers to satisfy their loan obligations is dependent to some degree on the status of the regional economy as well as upon the regional real estate market. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio and the recovery of a substantial portion of any resulting real estate acquired is susceptible to changes in market conditions.

Patriot has established credit policies applicable to each type of lending activity in which it engages and evaluates the creditworthiness of each borrower. Unless extenuating circumstances exist, Patriot limits the extension of credit on commercial real estate loans to 75% of the market value of the underlying collateral. Patriot’s loan origination policy for multi-family residential real estate is limited to 80% of the market value of the underlying collateral. In the case of construction loans, the maximum loan-to-value is 75% of the “as completed” appraised value of the real estate project. Management monitors the appraised value of collateral on an on-going basis and additional collateral is requested when warranted. Real estate is the primary form of collateral, although other forms of collateral do exist and may include such assets as accounts receivable, inventory, marketable securities, time deposits, and other business assets.

Risk characteristics of the Company’s portfolio classes include the following:

Commercial Real Estate Loans

In underwriting commercial real estate loans, Patriot evaluates both the prospective borrower’s ability to make timely payments on the loan and the value of the property securing the loans. Repayment of such loans may be negatively impacted should the borrower default, the value of the property collateralizing the loan substantially decline, or there are declines in general economic conditions. Where the owner occupies the property, Patriot also evaluates the business’ ability to repay the loan on a timely basis and may require personal guarantees, lease assignments, and/or the guarantee of the operating company.

14

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Residential Real Estate Loans

In 2013, Patriot discontinued offering primary mortgages on personal residences. Repayment of residential real estate loans may be negatively impacted should the borrower have financial difficulties, should there be a significant decline in the value of the property securing the loan, or should there be declines in general economic conditions.

During the three months ended March 31, 2021 and 2020, Patriot purchased $16.0 million and $4.1 million of residential real estate loans, respectively.

Commercial and Industrial Loans

Patriot’s commercial and industrial loan portfolio consists primarily of commercial business loans and lines of credit to businesses and professionals. These loans are generally for the financing of accounts receivable, purchases of inventory, purchases of new or used equipment, or for other short- or long-term working capital purposes. These loans are generally secured by business assets but are also occasionally offered on an unsecured basis. In granting these types of loans, Patriot considers the borrower’s cash flow as the primary source of repayment, supported by the value of collateral, if any, and personal guarantees, as applicable. Repayment of commercial and industrial loans may be negatively impacted by adverse changes in economic conditions, ineffective management, claims on the borrower’s assets by others that are superior to Patriot’s claims, a loss of demand for the borrower’s products or services, or the death or disability of the borrower or other key management personnel.

Patriot’s syndicated and leveraged loan portfolio, which totaled $44.8 million and $55.0 million at March 31, 2021 and December 31, 2020, respectively, are included in the commercial and industrial loan classification and are primarily comprised of loan transactions led by major financial institutions and regional banks, which are the Agent Bank or Lead Arranger, and are referred to as syndicated loans or "Shared National Credits (SNC)". SNC loans were determined to be complementary to the Bank’s existing commercial and industrial loan portfolio and product offerings and provide diversification from Patriot’s typical direct-to-business lines of credit and term facilities. The Bank will participate in senior secured financings for public and privately-owned companies for acquisitions, working capital, recapitalizations, and general corporate purposes. The Bank’s strategy is to participate in these types of loan transaction in accordance with its internal policies.

Consumer and Other Loans

Patriot offers individual consumers various forms of credit including installment loans, credit cards, overdraft protection, auto loans and reserve lines of credit. Repayments of such loans are generally dependent on the personal income of the borrower, which may be negatively impacted by adverse changes in economic conditions. The Company does not place a high emphasis on originating these types of loans.

The Company does not have any lending programs commonly referred to as subprime lending. Subprime lending generally targets borrowers with weakened credit histories that are typically characterized by payment delinquencies, previous charge-offs, judgments against the consumer, a history of bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burdened ratios.

In the first quarter of 2021, Patriot did not purchase any education loans. Education loans of $14.9 million were purchased during the three months ended March 31, 2020.

Construction Loans

Construction loans are of a short-term nature, generally of eighteen months or less, that are secured by land and improvements intended for commercial, residential, or mixed-use development. Loan proceeds may be used for the acquisition of or improvements to the land under development and funds are generally disbursed as phases of construction are completed.

Included in this category are loans to construct single family homes where no contract of sale exists, based upon the experience and financial strength of the builder, the type and location of the property, and other factors. Construction loans tend to be personally guaranteed by the principal(s). Repayment of such loans may be negatively impacted by an inability to complete construction, a downturn in the market for new construction, by a significant increase in interest rates, or by decline in general economic conditions.

15

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Construction to Permanent - Commercial Real Estate (“CRE”)

Loans in this category represent a one-time close of a construction facility with simultaneous conversion to an amortizing mortgage loan. Construction to Permanent loans combine a short term period similar to a  construction loan, generally with a variable rate, and a longer term CRE loan typically 20-25 years, resetting every five years to the Federal Home Loan Bank (“FHLB”) rate.

Close of the construction facility typically occurs when events dictate, such as receipt of a certificate of occupancy and property stabilization, which is defined as cash flow sufficient to support a pre-defined minimum debt coverage ratio and other conditions and covenants particular to the loan. Construction facilities are typically variable rate instruments that, upon conversion to an amortizing mortgage loan, reset to a fixed rate instrument that is the greater of the in-force variable rate plus a predetermined spread over a reference rate (e.g., prime) or a minimum interest rate.

SBA Loans

Patriot originates SBA 7(a) loans, on which the SBA has historically provided guarantees of 75% of the principal balance. The guaranteed portion of the Company’s SBA loans is generally sold in the secondary market with the unguaranteed portion held in the portfolio as a loan held for investment. SBA loans are for the purpose of providing working capital, financing the purchase of equipment, inventory, or commercial real estate and for other business purposes. Loans are guaranteed by the businesses' major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. SBA loans held for investment are included in the commercial real estate loans and commercial and industrial loan classifications, which totaled $22.1 million and $21.6 million as of March 31, 2021 and December 31, 2020, respectively. During the three-month period ended March 31, 2021, $281,000 SBA loans previously classified as held for sale were transferred to held for investment.

Small Business Administration Paycheck Protection Program

The CARES Act created the SBA’s Paycheck Protection Program. Under the Paycheck Protection Program, $669 billion was authorized for small business loans to pay payroll and group health costs, salaries and commissions, mortgage and rent payments, utilities, and interest on other debt. The loans are provided through participating financial institutions that process loan applications and service the loans. The Bank started participating in the SBA’s Paycheck Protection Program in January 2021.

Paycheck Protection Program loans are included in the commercial real estate loans and commercial and industrial loan classifications, and totaled $2.7 million as of March 31, 2021.

16

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Allowance for Loan and Lease Losses

The following tables summarize the activity in the allowance for loan and lease losses, allocated to segments of the loan portfolio, for the three months ended March 31, 2021 and 2020:

(In thousands)	Commercial Real Estate			Residential Real Estate			Commercial and Industrial			Consumer and Other			Construction			Construction to Permanent - CRE			Unallocated			Total
Three months ended March 31, 2021
Allowance for loan and lease losses:
December 31, 2020	$	4,485		$	1,379		$	3,284		$	295		$	739		$	162		$	240		$	10,584
Charge-offs		(42	)		(3	)		(209	)		(18	)		-			-			-			(272	)
Recoveries		-			-			12			102			-			-			-			114
Provisions (credits)		(289	)		533			537			3			(459	)		(85	)		(240	)		-
March 31, 2021	$	4,154		$	1,909		$	3,624		$	382		$	280		$	77		$	-		$	10,426
Three months ended March 31, 2020
Allowance for loan and lease losses:
December 31, 2019	$	3,789		$	1,038		$	4,340		$	341		$	477		$	130		$	-		$	10,115
Charge-offs		-			(1	)		(4	)		(39	)		-			-			-			(44	)
Recoveries		-			-			40			1			-			-			-			41
Provisions (credits)		361			83			14			231			126			(11	)		-			804
March 31, 2020	$	4,150		$	1,120		$	4,390		$	534		$	603		$	119		$	-		$	10,916

The following tables summarize, by loan portfolio segment, the amount of loans receivable evaluated individually and collectively for impairment as of March 31, 2021:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
March 31, 2021
Allowance for loan and lease losses:
Individually evaluated for impairment	$	1,414	$	4	$	501	$	-	$	-	$	-	$	-	$	1,919
Collectively evaluated for impairment		2,740		1,905		3,123		382		280		77		-		8,507
Total allowance for loan and lease losses	$	4,154	$	1,909	$	3,624	$	382	$	280	$	77	$	-	$	10,426
Loans receivable, gross:
Individually evaluated for impairment	$	17,025	$	4,247	$	6,532	$	653	$	-	$	-	$	-	$	28,457
Collectively evaluated for impairment		244,436		143,700		132,434		55,832		55,523		16,294		-		648,219
Total loans receivable, gross	$	261,461	$	147,947	$	138,966	$	56,485	$	55,523	$	16,294	$	-	$	676,676

17

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

The following tables summarize, by loan portfolio segment, the amount of loans receivable evaluated individually and collectively for impairment as of December 31, 2020:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
December 31, 2020
Allowance for loan and lease losses:
Individually evaluated for impairment	$	1,398	$	4	$	-	$	10	$	-	$	-	$	-	$	1,412
Collectively evaluated for impairment		3,087		1,375		3,284		285		739		162		240		9,172
Total allowance for loan losses	$	4,485	$	1,379	$	3,284	$	295	$	739	$	162	$	240	$	10,584
Loans receivable, gross:
Individually evaluated for impairment	$	14,534	$	3,962	$	4,700	$	1,187	$	-	$	-	$	-	$	24,383
Collectively evaluated for impairment		267,844		149,889		139,597		66,448		66,984		15,035		-		705,797
Total loans receivable, gross	$	282,378	$	153,851	$	144,297	$	67,635	$	66,984	$	15,035	$	-	$	730,180

Patriot monitors the credit quality of its loans receivable on an ongoing basis. Credit quality is monitored by reviewing certain indicators, including cash flow from business operations, loan to value ratios, debt service coverage ratios, and credit scores.

Patriot employs a risk rating system as part of the risk assessment of its loan portfolio. At origination, lending officers are required to assign a risk rating to each loan in their portfolio, which is ratified or modified by the Loan Committee to which the loan is submitted for approval. If financial developments occur on a loan in the lending officer’s portfolio of responsibility, the risk rating is reviewed and adjusted, as applicable. In carrying out its oversight responsibilities, the Loan Committee can adjust a risk rating based on available information. In addition, the risk ratings on all commercial loans over $250,000 are reviewed annually by the Credit Department.

Additionally, Patriot retains an independent third-party loan review expert to perform a semi-annual analysis of the results of its risk rating process. The review is based on a randomly selected sample of loans within established parameters (e.g., value, concentration), in order to assess and validate the risk ratings assigned to individual loans. Any changes to the assigned risk ratings, based on the quarterly review, are required to be approved by the Loan Committee.

When assigning a risk rating to a loan, management utilizes the Bank’s internal eleven-point risk rating system. An asset is considered “special mention” when it has a potential weakness based on objective evidence, but does not currently expose the Company to sufficient risk to warrant classification in one of the following categories:

● Substandard: An asset is classified “substandard” if it is not adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Substandard assets have well defined weaknesses based on objective evidence, and are characterized by the distinct possibility that the Company will sustain some loss, if noted deficiencies are not corrected.

● Doubtful: Assets classified as “doubtful” have all of the weaknesses inherent in those classified as “substandard”, with the added characteristic that the identified weaknesses make collection or liquidation-in-full improbable, on the basis of currently existing facts, conditions, and values.

Charge-offs of loans to reduce the loan to its recoverable value that are solely collateral dependent, generally occur immediately upon confirmation of the partial loss amount. Loans that are cash flow dependent are modeled to reflect the expected cash flows through expected loan maturity, including any proceeds from refinancing or principal curtailment. A specific reserve is established for the amount by which the net investment in the loan exceeds the present value of discounted cash flows. Charge-offs on cash flow dependent loans also generally occur immediately upon confirmation of the partial loss amount.

18

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

If either type of loan is classified as “Loss”, meaning full loss on the loan is expected, the full balance of the loan receivable is charged off, regardless of the potential recovery from a sale of the underlying collateral. Any amount that may be recovered on the sale of collateral underlying a loan is recognized as a “recovery” in the period in which the collateral is sold. In accordance with Federal Financial Institutions Examination Council published policies establishing uniform criteria for the classification of retail credit based on delinquency status, “Open-end” and “Closed-end” credits are charged off when 180 days and 120 days delinquent, respectively.

Due to the economic disruption and uncertainty caused by the pandemic, the allowance for loan losses may increase in future periods as borrowers are affected by the expected severe contraction of economic activity and the dramatic increase in unemployment. This may result in increases in loan delinquencies, down-grades of loan credit ratings and charge-offs in future periods. The allowance for loan losses may increase to reflect the decline in the performance of the loan portfolio and the higher level of incurred losses.

Allowance for loan losses methodology

In 2021, the Company refined its methodology in determining the qualitative factors within the allowance for loan losses. Qualitative adjustments are aggregated into nine categories described in the Interagency Policy Statement (“Interagency Statement”) issued by the bank regulators. Within the statement, the following qualitative factors are considered:

● Changes in lending policies and procedures, including underwriting standards, collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;

● Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan portfolio, including the condition of various market segments;

● Changes in the nature and volume of the loan portfolio and terms of loans;

● Changes in the experience, ability and depth of lending management and staff;

● Changes in the volume and loss severity of past due loans, the volume of non-accrual loans, and the volume and loss severity of adversely classified or graded loans;

● Changes in the quality of the loan review system;

● Changes in the value of the underlying collateral for collateral-dependent loans;

● The existence and effect of any concentrations of credit and changes in the level of such concentrations;

● The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in our current loan portfolio;

The additional risk factor for special mention loans and substandard loans and the risk factor related to COVID-19 pandemic, were eliminated. The separate adjustment for Special Mention and Substandard loans within each pool is now incorporated into the factor for “Changes in the volume and loss severity of past due loans, the volume of non-accrual, and the volume and loss severity of adversely classified or graded loans”, which now includes adjustments for the percentage of Special Mention and Substandard loans in each portfolio segment. The COVID-19 factor was eliminated since, after more than a year into the pandemic, we consider that the impact on both the economy and our portfolio is now manifest in economic data (GDP, unemployment, retail sales, manufacturing output, etc.) and in our portfolio, as reflected by the volume of Special Mention and Substandard loans that have resulted from deterioration in borrower performance as a direct result of the pandemic.

The refining in methodology resulted in better alignment of the credit characteristics of the various risk grades and loan types with the calculated allowance, and did not have any impact on the provision in the first quarter of 2021.

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PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Loan Portfolio Aging Analysis

The following tables summarize performing and non-performing (i.e., non-accruing) loans receivable by portfolio segment, by aging category, by delinquency status as of March 31, 2021.

(In thousands)	Performing (Accruing) Loans
As of March 31, 2021:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non-accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	517	$	750	$	-	$	1,267	$	210,720	$	211,987	$	-	$	211,987
Special mention		-		-		-		-		25,072		25,072		-		25,072
Substandard		351		-		-		351		7,017		7,368		17,034		24,402
		868		750		-		1,618		242,809		244,427		17,034		261,461
Residential Real Estate:
Pass	$	592	$	-	$	-		592	$	139,059		139,651		-		139,651
Special mention		-		-		-		-		3,832		3,832		-		3,832
Substandard		-		-		-		-		-		-		4,464		4,464
		592		-		-		592		142,891		143,483		4,464		147,947
Commercial and Industrial:
Pass	$	16	$	3,000	$	-		3,016	$	94,467		97,483		-		97,483
Special mention		123		-		-		123		8,226		8,349		-		8,349
Substandard		2,077		-		-		2,077		28,525		30,602		2,532		33,134
		2,216		3,000		-		5,216		131,218		136,434		2,532		138,966
Consumer and Other:
Pass	$	2	$	5	$	-		7	$	55,801		55,808		-		55,808
Substandard		-		-		-		-		120		120		557		677
		2		5		-		7		55,921		55,928		557		56,485
Construction:
Pass	$	866	$	-	$	-		866	$	54,657		55,523		-		55,523
		866		-		-		866		54,657		55,523		-		55,523
Construction to Permanent - CRE:
Pass	$	-	$	724	$	-		724	$	15,570		16,294		-		16,294
		-		724		-		724		15,570		16,294		-		16,294
Total	$	4,544	$	4,479	$	-	$	9,023	$	643,066	$	652,089	$	24,587	$	676,676
Loans receivable, gross:
Pass	$	1,993	$	4,479	$	-	$	6,472	$	570,274	$	576,746	$	-	$	576,746
Special mention		123		-		-		123		37,130		37,253		-		37,253
Substandard		2,428		-		-		2,428		35,662		38,090		24,587		62,677
Loans receivable, gross	$	4,544	$	4,479	$	-	$	9,023	$	643,066	$	652,089	$	24,587	$	676,676

20

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

The following tables summarize performing and non-performing loans (i.e., non-accruing) receivable by portfolio segment, by aging category, by delinquency status as of December 31, 2020.

(In thousands)	Performing (Accruing) Loans
As of December 31, 2020:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non-accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	-	$	-	$	-	$	-	$	230,824	$	230,824	$	-	$	230,824
Special mention		-		-		-		-		25,658		25,658		-		25,658
Substandard		354		-		9		363		10,999		11,362		14,534		25,896
		354		-		9		363		267,481		267,844		14,534		282,378
Residential Real Estate:
Pass		478		361		-		839		145,298		146,137		-		146,137
Special mention		-		-		-		-		3,860		3,860		-		3,860
Substandard		-		-		-		-		-		-		3,854		3,854
		478		361		-		839		149,158		149,997		3,854		153,851
Commercial and Industrial:
Pass		-		209		-		209		102,131		102,340		-		102,340
Special mention		-		4,000		-		4,000		8,881		12,881		-		12,881
Substandard		603		113		-		716		27,660		28,376		700		29,076
		603		4,322		-		4,925		138,672		143,597		700		144,297
Consumer and Other:
Pass		1		-		7		8		66,589		66,597		-		66,597
Substandard		-		-		-		-		121		121		917		1,038
		1		-		7		8		66,710		66,718		917		67,635
Construction:
Pass		-		2,351		-		2,351		64,633		66,984		-		66,984
		-		2,351		-		2,351		64,633		66,984		-		66,984
Construction to Permanent - CRE:
Pass		-		-		-		-		15,035		15,035		-		15,035
		-		-		-		-		15,035		15,035		-		15,035
Total	$	1,436	$	7,034	$	16	$	8,486	$	701,689	$	710,175	$	20,005	$	730,180
Loans receivable, gross:
Pass	$	479	$	2,921	$	7	$	3,407	$	624,510	$	627,917	$	-	$	627,917
Special mention		-		4,000		-		4,000		38,399		42,399		-		42,399
Substandard		957		113		9		1,079		38,780		39,859		20,005		59,864
Loans receivable, gross	$	1,436	$	7,034	$	16	$	8,486	$	701,689	$	710,175	$	20,005	$	730,180

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PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

The following tables summarize non-performing (i.e., non-accruing) loans by aging category and status, within the applicable loan portfolio segment as of March 31, 2021 and December 31, 2020:

(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of March 31, 2021:
Loan portfolio segment:
Commercial Real Estate:
Substandard	$	-	$	-	$	4,658	$	4,658	$	12,376	$	17,034
Residential Real Estate:
Substandard		-		23		2,122		2,145		2,319		4,464
Commercial and Industrial:
Substandard		1,786		63		683		2,532		-		2,532
Consumer and Other:
Substandard		-		-		30		30		527		557
Total non-accruing loans	$	1,786	$	86	$	7,493	$	9,365	$	15,222	$	24,587
As of December 31, 2020:
Loan portfolio segment:
Commercial Real Estate:
Substandard	$	-	$	-	$	5,723	$	5,723	$	8,811	$	14,534
Residential Real Estate:
Substandard		-		-		2,884		2,884		970		3,854
Commercial and Industrial:
Substandard		-		-		700		700		-		700
Consumer and Other:
Substandard		22		-		91		113		804		917
Total non-accruing loans	$	22	$	-	$	9,398	$	9,420	$	10,585	$	20,005

If non-accrual loans had been performing in accordance with the original contractual terms, additional interest income (net of cash collected) of approximately $255,000 and $191,000 would have been recognized during the three months ended March 31, 2021 and 2020, respectively.

Interest income collected and recognized on non-accruing loans for the three months ended March 31, 2021 and 2020 was $48,000 and $28,000, respectively.

The accrual of interest on loans is discontinued at the time the loan is 90 days past due for payment unless the loan is well-secured and in process of collection. Consumer installment loans are typically charged off no later than 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual status or charged-off, at an earlier date, if collection of principal or interest is considered doubtful.

All interest accrued, but not collected for loans that are placed on non-accrual status or charged off, is reversed against interest income. The interest on these loans is accounted for on the cash-basis method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, future payments are reasonably assured, after at least six months of timely payment history. Management considers all non-accrual loans and Trouble Debt Restructurings (“TDR”) for impaired loans. In most cases, loan payments that are past due less than 90 days, well-secured, and in the process of collection are not considered impaired. The Bank considers loans under $100,000 and consumer installment loans to be pools of smaller homogeneous loan balances, and therefore are collectively evaluated for impairment, and not individually measured for impairment.

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PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Troubled Debt Restructurings (“TDR”)

On a case-by-case basis, Patriot may agree to modify the contractual terms of a borrower’s loan to assist customers who may be experiencing financial difficulty. If the borrower is experiencing financial difficulties and a concession has been made, the loan is classified as a TDR.

Substantially all TDR loan modifications involve lowering the monthly payments on such loans through either a reduction in interest rate below market rate, an extension of the term of the loan, or a combination of adjusting these two contractual attributes. TDR loan modifications may also result in the forgiveness of principal or accrued interest. In addition, when modifying commercial loans, Patriot frequently obtains additional collateral or guarantor support. If the borrower has performed under the existing contractual terms of the loan and Patriot’s underwriters determine that the borrower has the capacity to continue to perform under the terms of the TDR, the loan continues accruing interest. Non-accruing TDRs may be returned to accrual status when there has been a sustained period of performance (generally six consecutive months of payments) and both principal and interest are reasonably assured of collection.

The following table summarizes the recorded investment in TDRs as of March 31, 2021 and December 31, 2020:

(In thousands)	March 31, 2021					December 31, 2020
	Number of Loans		Recorded Investment			Number of Loans		Recorded Investment
Loan portfolio segment:
Commercial Real Estate		1	$	8,811			2	$	9,884
Residential Real Estate		3		912			3		928
Commercial and Industrial		1		4,000			1		4,000
Consumer and Other		4		774			5		1,074
Total TDR Loans		9		14,497			11		15,886
Less:
TDRs included in non-accrual loans		4		(10,120	)		6		(11,508	)
Total accrual TDR Loans		5	$	4,377			5	$	4,378

During the three months ended March 31, 2021 and 2020, no loans were modified as TDR.

The loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, extending the interest-only payment period, or substituting or adding a co-borrower or guarantor. There were no defaults of TDRs during the three months ended March 31, 2021 and 2020. At March 31, 2021 and December 31, 2020, there were no commitments to advance additional funds under TDRs.

The balances reflected here as TDR’s are also included in the non-accruing loan balance included in the prior table - Loan Portfolio Aging Analysis.

Pursuant to the CARES Act, loan modifications made between March 1, 2020 and the earlier of i) December 30, 2021 or ii) 60 days after the President declares a termination of the COVID-19 national emergency are not classified as TDRs if the related loans were not more than 30 days past due as of December 31, 2021. In addition, on April 7, 2020, a group of banking regulatory agencies issued a revised interagency statement that offers practical expedients for evaluating whether COVID-19 loan modifications are TDRs. The Bank had modified $232.7 million of loans to borrowers to defer the payment of interest and/or principal for up to 180 days, and approximately $37.7 million of loans remained on deferment as of March 31, 2021. According to regulatory guidance and CARES Act, these modified loans were not TDRs as of March 31, 2021.

23

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Impaired Loans

The following table reflects information about the impaired loans by class as of March 31, 2021 and December 31, 2020:

(In thousands)	March 31, 2021						December 31, 2020
	Recorded Investment		Principal Outstanding		Related Allowance		Recorded Investment		Principal Outstanding		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	8,214	$	9,135	$	-	$	5,723	$	6,644	$	-
Residential Real Estate		4,138		4,212		-		3,853		3,900		-
Commercial and Industrial		4,684		4,803		-		4,700		4,816		-
Consumer and Other		653		678		-		1,177		1,332		-
		17,689		18,828		-		15,453		16,692		-
With a related allowance recorded:
Commercial Real Estate	$	8,820	$	8,820	$	1,415		8,811		8,811		1,398
Residential Real Estate		435		452		8		109		109		4
Commercial and Industrial		1,848		2,063		501		-		-		-
Consumer and Other		172		204		2		10		10		10
		11,275		11,539		1,926		8,930		8,930		1,412
Impaired Loans, Total:
Commercial Real Estate		17,034		17,955		1,415		14,534		15,455		1,398
Residential Real Estate		4,573		4,664		8		3,962		4,009		4
Commercial and Industrial		6,532		6,866		501		4,700		4,816		-
Consumer and Other		825		882		2		1,187		1,342		10
Impaired Loans, Total	$	28,964	$	30,367	$	1,926	$	24,383	$	25,622	$	1,412

The following tables summarize additional information regarding impaired loans by class for the three months ended March 31, 2021 and 2020.

	Three Months Ended March 31,
(In thousands)	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	6,078	$	-	$	3,467	$	-
Residential Real Estate		4,248		13		3,578		20
Commercial and Industrial		2,745		46		2,082		1
Consumer and Other		945		6		851		8
		14,016		65		9,978		29
With a related allowance recorded:
Commercial Real Estate		8,813		-		8,808		1
Residential Real Estate		190		3		28		2
Commercial and Industrial		462		26		-		-
Consumer and Other		47		2		51		1
		9,512		31		8,887		4
Impaired Loans, Total:
Commercial Real Estate		14,891		-		12,275		1
Residential Real Estate		4,438		16		3,606		22
Commercial and Industrial		3,207		72		2,082		1
Consumer and Other		992		8		902		9
Construction		-		-		-		-
Impaired Loans, Total	$	23,528	$	96	$	18,865	$	33

24

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Impaired loans may consist of non-accrual loans and/or performing and non-performing TDRs. Based on the ongoing monitoring and analysis of the loan portfolio, thirty-three loans were identified as impaired, with a total recorded balance of $29.0 million as of March 31, 2021, for which $1.9 million specific reserves were established. Twenty-three out of thirty-three impaired loans were individually evaluated for impairment, and the remaining ten impaired loans with balances under $100,000, were collectively evaluated, and not individually evaluated for impairment.

At December 31, 2020, exposure to the impaired loans was related to twenty-six borrowers. Total recorded balance was $24.4 million, for which $1.4 million special reserves were established. All impaired loans were evaluated individually.

For collateral dependent loans, appraisal reports of the underlying collateral, have been obtained from independent licensed appraisal firms. For non-performing loans, the independently determined appraised values were first reduced by a 5.8% discount to reflect the Bank’s experience selling Other Real Estate Owned (OREO) properties, and were further reduced by 8% in selling costs, in order to estimate the potential loss, if any, that may eventually be realized. Performing loans are monitored to determine when, if at all, additional loan loss reserves may be required for a loss of underlying collateral value. For cash flow dependent loans, the Bank determined the reserve based on the present value of expected future cash flows discounted at the loan's effective interest rate.

Loans not requiring specific reserves had fair values exceeding the total recorded investment, supporting the net investment in the loan which includes principal balance, unamortized fees and costs and accrued interest, if any. Once a borrower is in default, Patriot is under no obligation to advance additional funds on unused commitments.

Note 5. Loans Held for Sale

SBA loans held for sale represent the guaranteed portion of SBA loans originated and are reflected at the lower of aggregate cost or market value. As of March 31, 2021, SBA loans held for sale, consisted of $1.9 million SBA commercial real estate loans and $938,000 SBA commercial and industrial loans, respectively. As of December 31, 2020, SBA loans held for sale only consisted of $1.2 million of SBA commercial and industrial loans. During the three months ended March 31, 2021, $281,000 SBA loans previously classified as held for sale were transferred to held for investment.

The Company generally sells the guaranteed portion of its SBA loans to a third party and retains the servicing, holding the unguaranteed portion in its portfolio. When sales of SBA loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets, less the discount of the retained portion of the loan are recognized in income.

Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment will be evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment, if temporary, would be reported as a valuation allowance.

Serviced loans sold to others are not included in the accompanying consolidated balance sheets. The total amount of such loans serviced, but owned by third party, amounted to approximately $20.0 million and $19.4 million at March 31, 2021 and December 31, 2020, respectively. The servicing asset has a carrying value of $327,000 and fair value of $391,000 at March 31, 2021. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets. The servicing asset is included in other assets on the consolidated balance sheets.

25

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

The following table presents an analysis of the activity in the SBA servicing assets for the three months ended March 31, 2021 and 2020:

(In thousands)	Three Months Ended March 31,
	2021			2020
Beginning balance	$	316		$	201
Servicing rights capitalized		17			2
Servicing rights amortized		(6	)		(5	)
Ending balance	$	327		$	198

Note 6. 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 intangible and adjustment of cash and contingent consideration. 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. As of December 31, 2020, a purchase price adjustment of $556,000 was recognized to project expenses on the consolidated statements of operations. The charge represented an adjustment to the earlier estimate of the final purchase price upon final settlement of the litigation related to a dispute over the final purchase price in 2020. The goodwill is all deductible for income taxes over 15 years.

Goodwill is evaluated for impairment annually, in the fourth quarter of the year, 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, supply costs, unanticipated competitive activities, and acts by governments and courts.

The Company did not perform an interim goodwill test in the first quarter of 2021 as no events occurred which would trigger an impairment assessment.

26

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 7. Deposits

The following table presents the balance of deposits held, by category as of March 31, 2021 and December 31, 2020.

(In thousands)	March 31,		December 31,
	2021		2020
Non-interest bearing	$	173,520	$	158,676
Interest bearing:
NOW		34,433		30,529
Savings		103,025		98,635
Money market		131,844		146,389
Certificates of deposit, less than $250,000		165,130		160,968
Certificates of deposit, $250,000 or greater		66,470		49,172
Brokered deposits		18,456		41,287
Interest bearing, Total		519,358		526,980
Total Deposits	$	692,878	$	685,656

On July 22, 2020, the Company completed the purchase of prepaid debit card deposits of $50.0 million from a prominent national provider and processor of prepaid debit cards for corporate, consumer and government clients. The prepaid debit card deposits are included in the non-interest-bearing deposits, which totaled approximately $68.8 million and $59.3 million as of March 31, 2021 and December 31, 2020, respectively.

As of March 31, 2021, contractual maturities of Certificates of Deposit (“CDs”), and brokered deposits is summarized as follows:

(In thousands)	CDs less than $250,000		CDs $250,000 or greater		Brokered Deposits		Total
1 year or less	$	146,767	$	45,491	$	16,957	$	209,215
More than 1 year through 2 years		14,345		19,978		1,000		35,323
More than 2 years through 3 years		2,667		751		-		3,418
More than 3 years through 4 years		1,074		250		499		1,823
More than 4 years through 5 years		277		-		-		277
	$	165,130	$	66,470	$	18,456	$	250,056

27

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 8. Derivatives

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 two initial interest rate swaps under the program in November 2018, and another two swaps were entered into in May 2019. As of March 31, 2021 and December 31, 2020, Patriot had cash pledged for collateral on its interest rate swaps of $1.4 million and $1.4 million, respectively. This collateral is included in other assets on the consolidated balance sheets.

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
March 31, 2021
Classified in Other Assets:
Customer interest rate swap	$	4,911		8.1		5.25	%	1 Mo. LIBOR + 1.96%	$	687
Customer interest rate swap		1,422		8.3		4.38	%	1 Mo. LIBOR + 2.00%		104
Classified in Other Liabilities:
3rd party interest rate swap	$	4,911		8.1		5.25	%	1 Mo. LIBOR + 1.96%	$	(687	)
3rd party interest rate swap		1,422		8.3		4.38	%	1 Mo. LIBOR + 2.00%		(104	)
December 31, 2020
Classified in Other Assets:
Customer interest rate swap	$	4,911		8.3		5.25	%	1 Mo. LIBOR + 1.96%	$	997
Customer interest rate swap		1,431		8.5		4.38	%	1 Mo. LIBOR + 2.00%		190
Classified in Other Liabilities:
3rd party interest rate swap	$	4,911		8.3		5.25	%	1 Mo. LIBOR + 1.96%	$	(997	)
3rd party interest rate swap		1,431		8.5		4.38	%	1 Mo. LIBOR + 2.00%		(190	)

Note 9. Share-Based Compensation and Employee Benefit Plan

In 2011, the Company adopted the Patriot National Bancorp, Inc. 2012 Stock Plan (the “2012 Plan”). The 2012 Plan was amended in 2020 and renamed as the Patriot National Bancorp, Inc. 2020 Stock Plan (the “2020 Plan”). A copy of the 2020 Plan was filed as Exhibit 10.1 to the Company’s Amendment No. 1 on Form 10-K/A filed on April 30, 2021. The 2020 Plan provides an incentive to directors and employees of the Company by the grant of restricted stock awards (“RSA”).

The 2020 Plan authorizes 3,000,000 shares of the Company’s Common Stock for issuance. As of March 31, 2021, 2,850,507 shares of stock are available for issuance under the Plan. In accordance with the terms of the Plan, the vesting of RSAs and options may be accelerated at the discretion of the Compensation Committee of the Board of Directors. The Compensation Committee sets the terms and conditions applicable to the vesting of RSAs and stock option grants. RSAs granted to directors and employees generally vest in quarterly or annual installments over a three, four or five year period from the date of grant.

28

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

The following is a summary of the status of the Company’s restricted shares and changes for the three months ended March 31, 2021 and 2020:

Three months ended March 31, 2021:	Number of Shares Awarded			Weighted Average Grant Date Fair Value
Unvested at December 31, 2020		18,498		$	7.29
Vested		(700	)	$	17.85
Unvested at March 31, 2021		17,798		$	6.88
Three months ended March 31, 2020:
Unvested at December 31, 2019		21,470		$	12.91
Vested		(2,172	)	$	14.56
Unvested at March 31, 2020		19,298		$	12.73

The Company recognizes compensation expense for all director and employee share-based compensation awards on a straight-line basis over the requisite service period, which is equal to the vesting schedule of each award, for each vesting portion of an award equal to its grant date fair value.

For the three months ended March 31, 2021 and 2020, the Company recognized total share-based compensation expense of $34,000 and $43,000, respectively. The share-based compensation attributable to employees of Patriot amounted to $15,000 and $25,000, respectively. Included in share-based compensation expense were $19,000 and $18,000 attributable to Patriot’s external directors, who received total compensation of $94,000 and $117,000 for each of those periods, respectively, which amounts are included in other operating expenses in the consolidated statements of operations.

Unrecognized compensation expense attributable to the unvested restricted shares outstanding as of March 31, 2021 amounted to $149,000, which amount is expected to be recognized over the weighted average remaining life of the awards of 1.71 years.

Dividends

The Company has not paid any dividends since 2020 and has temporarily suspended dividend payments pending resolution of the economic uncertainties associated with the Coronavirus pandemic.

Retirement Plan

The Company offers a 401K retirement plan (the “401K”), which provides for tax-deferred salary deductions for eligible employees. Employees may choose to make voluntary contributions to the 401K, limited to an annual maximum amount as set forth periodically by the Internal Revenue Service. The Company matches 50% of such contributions, up to a maximum of six percent of an employee's annual compensation. During the three months ended March 31, 2021 and 2020, compensation expense under the 401K aggregated $48,000 and $89,000, respectively.

29

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 10. Earnings (loss) per share

The Company is required to present basic earnings (loss) per share and diluted earnings (loss) per share in its Consolidated Statements of Operations. Basic earnings (loss) per share amounts are computed by dividing net (loss) income by the weighted average number of common shares outstanding. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if potentially dilutive common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate to outstanding unvested RSAs granted to directors and employees. The dilutive effect resulting from these potential shares is determined using the treasury stock method. The Company is also required to provide a reconciliation of the numerator and denominator used in the computation of both basic and diluted earnings (loss) per share.

The following table summarizes the computation of basic and diluted earnings (loss) per share for the three months ended March 31, 2021 and 2020:

(Net income (loss) in thousands)	Three Months Ended March 31,
	2021		2020
Basis earnings (loss) per share:
Net income (loss) attributable to Common shareholders	$	854	$	(1,072	)
Divided by:
Weighted average shares outstanding		3,943,580		3,931,388
Basic earnings (loss) per common share	$	0.22	$	(0.27	)
Diluted earnings (loss) per share:
Net income (loss) attributable to Common shareholders	$	854	$	(1,072	)
Weighted average shares outstanding		3,943,580		3,931,388
Effect of potentially dilutive restricted common shares		1,540		-	(1)
Divided by:
Weighted average diluted shares outstanding		3,945,120		3,931,388
Diluted earnings (loss) per common share	$	0.22	$	(0.27	)

(1) The weighted average diluted shares outstanding does not include 10,112 anti-dilutive restricted common shares for the three months ended March 31, 2020.

30

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 11. Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, Patriot is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet. The contractual amounts of these instruments reflect the extent of involvement Patriot has in particular classes of financial instruments.

The contractual amount of commitments to extend credit and standby letters of credit represents the maximum amount of potential accounting loss should: the contract be fully drawn upon; the customer default; and the value of any existing collateral become worthless. Patriot applies its credit policies to entering commitments and conditional obligations and, as with its lending activates, evaluates each customer’s creditworthiness on a case-by-case basis. Management believes that it effectively mitigates the credit risk of these financial instruments through its credit approval processes, establishing credit limits, monitoring the on-going creditworthiness of recipients and grantees, and the receipt of collateral as deemed necessary.

Financial instruments with credit risk at March 31, 2021 and December 31, 2020 are as follows:

	March 31,		December 31,
(In thousands)	2021		2020
Commitments to extend credit:
Unused lines of credit	$	62,473	$	61,622
Undisbursed construction loans		19,302		25,232
Home equity lines of credit		18,779		19,240
Future loan commitments		27,645		15,696
Financial standby letters of credit		564		604
	$	128,763	$	122,394

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments to extend credit generally have fixed expiration dates or other termination clauses, and may require payment of a fee by the borrower. Since these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary upon extending credit, is based on management’s credit evaluation of the customer. Collateral held varies, but may include commercial property, residential property, deposits and securities. Patriot has established a reserve for credit loss of $8,000 and $8,000 as of March 31, 2021 and December 31, 2020, respectively, which is included in accrued expenses and other liabilities.

Standby letters of credit are written commitments issued by Patriot to guarantee the performance of a customer to a third party. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loan facilities to customers. Guarantees that are not derivative contracts are recorded at fair value and included in the consolidated balance sheet.

31

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 12. Regulatory and Operational Matters

In November 2018, the Bank entered into a formal written agreement (the “Agreement”) with the OCC.  Pursuant to the terms of the Agreement, the Bank has appointed a Compliance Committee of three independent outside directors and one member of management responsible for monitoring adherence to the Agreement and has appointed a Lead Independent Director.

The Agreement states that the Board of the Bank would develop, implement and revise written documents and policies related to executive compensation, conflict of interest, internal audit, liquidity and asset/liability management, commercial loan administration, leveraged lending, practices relating to the allowance for loan and lease losses, and assumptions used in the Bank’s interest rate risk model. Under the Agreement, the Bank agreed to provide a revised written 3-year strategic and capital plan for the Bank. The Bank provided the documents and policies requested in the Agreement. To date, the Bank has addressed each of the items identified in the Agreement and is currently working collaboratively with the OCC to bring all matters to full resolution. Further details pertaining to the Agreement were provided in Part II Item 9B: Other information included on the Annual Report on Form 10-K for the year ended December 31, 2018.

Federal and state regulatory authorities have adopted standards requiring financial institutions to maintain increased levels of capital. Effective January 1, 2015, federal banking agencies imposed four minimum capital requirements on a community bank’s risk-based capital ratios consisting of Total Capital, Tier 1 Capital, Common Equity Tier 1 (“CET1”) Capital, and a Tier 1 Leverage Capital ratio. The risk-based capital ratios measure the adequacy of a bank's capital against the riskiness of its on- and off-balance sheet assets and activities. Failure to maintain adequate capital is a basis for "prompt corrective action" or other regulatory enforcement action. In assessing a bank's capital adequacy, regulators also consider other factors such as interest rate risk exposure, liquidity, funding and market risks, quality and level of earnings, concentrations of credit, quality of loans and investments, nontraditional activity risk, policy effectiveness, and management's overall ability to monitor and control risk.

In September 2019, the community bank leverage ratio (CBLR) framework was jointly issued by the FDIC, OCC and FRB. The final rule gives qualifying community banks the option to use a simplified measure of capital adequacy instead of risk based capital, beginning with their March 31, 2020 Call Report. Under the final rule a community bank may qualify for the CBLR framework if it has a Tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance sheet exposures and trading assets and liabilities. The Bank did not adopt the CBLR framework at March 31, 2021 but retains the option to adopt the framework in a future period.

Capital adequacy is one of the most important factors used to determine the safety and soundness of individual banks and the banking system. Under the instituted regulatory framework, to be considered “well capitalized”, a financial institution must generally have a Total Capital ratio of at least 10%, a Tier 1 Capital ratio of at least 8.0%, a CET1 Capital ratio at least 6.5%, and a Tier 1 Leverage Capital ratio of at least 9.0%. However, regardless of a financial institution’s ratios, the OCC may require increased capital ratios or impose dividend restrictions based on the other factors it considers in assessing a bank’s capital adequacy.

Management continuously assesses the adequacy of the Bank’s capital in order to maintain its “well capitalized” status.

32

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

The Company’s and the Bank’s regulatory capital amounts and ratios at March 31, 2021 and December 31, 2020 are summarized as follows:

(In thousands)	Patriot National Bancorp, Inc.								Patriot Bank, N.A.
	March 31, 2021				December 31, 2020				March 31, 2021				December 31, 2020
	Amount ($)		Ratio (%)		Amount ($)		Ratio (%)		Amount ($)		Ratio (%)		Amount ($)		Ratio (%)
Total Capital (to risk weighted assets):
Actual	$	88,039		11.804	$	87,428		11.132	$	98,538		13.317	$	97,608		12.510
To be Well Capitalized(1)		-		-		-		-		73,994		10.000		78,026		10.000
For capital adequacy with Capital Buffer(2)		-		-		-		-		77,693		10.500		81,927		10.500
For capital adequacy		59,665		8.000		62,827		8.000		59,195		8.000		62,421		8.000
Tier 1 Capital (to risk weighted assets):
Actual		68,703		9.212		67,602		8.608		89,274		12.065		87,844		11.258
To be Well Capitalized(1)		-		-		-		-		59,195		8.000		62,421		8.000
For capital adequacy with Capital Buffer(2)		-		-		-		-		62,895		8.500		66,322		8.500
For capital adequacy		44,749		6.000		47,120		6.000		44,396		6.000		46,815		6.000
Common Equity Tier 1 Capital (to risk weighted assets):
Actual		60,703		8.139		59,602		7.589		89,274		12.065		87,844		11.258
To be Well Capitalized(1)		-		-		-		-		48,096		6.500		50,717		6.500
For capital adequacy with Capital Buffer(2)		-		-		-		-		51,796		7.000		54,618		7.000
For capital adequacy		33,562		4.500		35,340		4.500		33,297		4.500		35,112		4.500
Tier 1 Leverage Capital (to average assets):
Actual		68,703		7.791		67,602		7.539		89,274		10.122		87,844		9.794
To be Well Capitalized(1)		-		-		-		-		79,378		9.000		80,721		9.000
For capital adequacy		35,272		4.000		35,868		4.000		35,279		4.000		35,876		4.000

(1)	Designation as "Well Capitalized" does not apply to bank holding companies - the Company. Such categorization of capital adequacy only applies to insured depository institutions - the Bank.
(2)	The Capital Conservation Buffer implemented by the FDIC began to be phased in beginning January 1, 2016. It was not applicable to periods prior to that date and does not apply to bank holding companies - the Company.

Under the final capital rules that became effective on January 1, 2015, there was a requirement for a CET1 capital conservation buffer of 2.5% of risk-weighted assets, which is in addition to the other minimum risk-based capital standards in the rule. Institutions that do not maintain this required capital buffer become subject to progressively more stringent limitations on the percentage of earnings that may be distributed to shareholders or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital conversation buffer of 2.5% has been included in the minimum capital adequacy ratios in the 2021 and 2020 column above.

The capital buffer requirement effectively raises the minimum required Total Capital ratio to 10.5%, the Tier 1 capital ratio to 8.5% and the CET1 capital ratio to 7.0% on a fully phased-in basis, which was effective on January 1, 2019. As of March 31, 2021, Patriot satisfies all regulatory capital adequacy requirements on a fully phased-in basis.

33

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

On January 22, 2019, based on its supervisory profile, the Bank was notified by the OCC that it established individual minimum capital ratios for the Bank. Specifically, the Bank is required to maintain a Tier 1 leverage ratio of 9.0% and a total risk-based capital to risk-weighted assets of 11.0%.

At March 31, 2021, the Bank exceeded all of its regulatory capital requirements with a Tier 1 leverage capital level of 10.1% of adjusted total assets of $89.3 million, which is above the well-capitalized required level of 9.0%; and total risk-based capital of $98.5 million, or 13.3% of risk-weighted assets, which is above the well-capitalized required level of 11.0% of risk weighted assets. At December 31, 2020, the Bank exceeded all of its regulatory capital requirements with a Tier 1 leverage capital level of $87.8 million, or 9.8% of adjusted total assets, which is above the well-capitalized required level of 9.0%; total risk-based capital of $97.6 million, or 12.5% of risk-weighted assets, which is above the well-capitalized required level of 11.0% of risk-weighted assets. Accordingly, the Bank was categorized as well capitalized as of March 31, 2021 and December 31, 2020. Management is not aware of any conditions or events since the most recent notification that would change the Bank’s category.

Note 13. Fair Value and Interest Rate Risk

Patriot measures the carrying value of certain financial assets and liabilities at fair value, as required by its policies as a financial institution and by US GAAP. The carrying values of certain assets and liabilities are measured at fair value on a recurring basis, such as available-for-sale securities; while other assets and liabilities are measured at fair value on a non-recurring basis due to external factors requiring management’s judgment to estimate potential losses of value resulting in asset impairments or the establishment of valuation reserves. Measuring assets and liabilities at fair value may result in fluctuations to carrying value that have a significant impact on the results of operations or other comprehensive income for the period and period over period.

Following is a detailed summary of the guidance provided by US GAAP regarding the application of fair value measurements and Patriot’s application thereof. Additionally, the following information includes detailed summaries of the effects fair value measurements have on the carrying amounts of asset and liabilities presented in the consolidated financial statements.

The objective of fair value measurement is to value an asset that may be sold or a liability that may be transferred at the estimated value which might be obtained in a transaction between unrelated parties under current market conditions. US GAAP establishes a framework for measuring assets and liabilities at fair value, as well as certain financial instruments classified in equity. The framework provides a fair value hierarchy, which prioritizes quoted prices in active markets for identical assets and liabilities and minimizes unobservable inputs, which are inputs for which market data are not available and that are developed by management using the best information available to develop assumptions about the value market participants might place on the asset to be sold or liability to be transferred.

The three levels of the fair value hierarchy consist of:

Level 1 Unadjusted quoted market prices for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date (such as active exchange-traded equity securities and certain U.S. and government agency debt securities).

Level 2 Observable inputs other than quoted prices included in Level 1, such as:

- Quoted prices for similar assets or liabilities in active markets (such as U.S. agency and government sponsored mortgage-backed securities)

- Quoted prices for identical or similar assets or liabilities in less active markets (such as certain U.S. and government agency debt securities, and corporate and municipal debt securities that trade infrequently)

- Other inputs that are observable for substantially the full term of the asset or liability (i.e. interest rates, yield curves, prepayment speeds, default rates, etc.).

Level 3 Valuation techniques that require unobservable inputs that are supported by little or no market activity and are significant to the fair value measurement of the asset or liability (such as pricing and discounted cash flow models that typically reflect management’s estimates of the assumptions a market participant would use in pricing the asset or liability).

34

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

A description of the valuation methodologies used for assets and liabilities recorded at fair value, and for estimating fair value for financial and non-financial instruments not recorded at fair value, is set forth below.

Cash and due from banks and accrued interest receivable and payable

The carrying amount is a reasonable estimate of fair value and accordingly these are classified as Level 1. These financial instruments are not recorded at fair value on a recurring basis.

Available-for-sale securities

The fair value of securities available for sale (carried at fair value) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities' relationship to other benchmark quoted prices, or using unobservable inputs employing various techniques and assumptions (Level 3).

Other Investments

The Bank’s investment portfolio includes the Solomon Hess SBA Loan Fund totaling $4.45 million. This investment is utilized by the Bank to satisfy its Community Reinvestment Act (“CRA”) lending requirements. As this fund operates as a private fund, shares in the fund are not publicly traded but may be redeemed with 60 days’ notice at cost. For that reason, the carrying amount was considered comparable to fair value at both March 31, 2021 and December 31, 2020 due to its short-term nature.

Federal Reserve Bank Stock and Federal Home Loan Bank Stock

Shares in the Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) are purchased and redeemed based upon their $100 par value. The stocks are non-marketable equity securities, and as such, are considered restricted securities that are carried at cost.

Loans

The fair value of loans are estimated by discounting the future cash flows using the rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We estimate the fair value of our loan portfolio using an exit price notion resulting in prior periods no longer being comparable. The exit price notion requires determination of the price at which willing market participants would transact at the measurement date under current market conditions depending on facts and circumstances, such as origination rates, credit risk, transaction costs, liquidity, national and regional market trends and other adjustments, utilizing publicly available rates and indices. The application of an exit price notion requires the use of significant judgment.

Loans Held for Sale

The fair value of loans held for sale is estimated by using a market approach that includes prices for loans sold awaiting settlement and other observable inputs. The Company has determined that the inputs used to value the loans held for sale fall within Level 2 of the fair value hierarchy.

SBA Servicing Asset

Servicing assets do not trade in an active, open market with readily observable prices. The Company estimates the fair value of servicing assets using discounted cash flow models incorporating numerous assumptions from the perspective of a market participant including market discount rates and prepayment speeds. Due to the significant unobservable input related to the servicing rights, the SBA servicing asset is classified within Level 3 of the valuation hierarchy.

35

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Other Real Estate Owned

The fair value of OREO the Bank may obtain is based on current appraised property value less estimated costs to sell. When fair value is based on unadjusted current appraised value, OREO is classified within Level 2 of the fair value hierarchy. Patriot classifies OREO within Level 3 of the fair value hierarchy when unobservable inputs are used to determine adjustments to appraised values. Patriot does not record OREO at fair value on a recurring basis, but rather initially records OREO at fair value on a non-recurring basis and then monitors property and market conditions that may indicate a change in value is warranted.

Derivative asset (liability) - Interest Rate Swaps

The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Company has determined that the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy.

Deposits

The fair value of demand deposits, regular savings and certain money market deposits is the amount payable on demand at the reporting date.

The fair value of certificates of deposit and other time deposits is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities, estimated using local market data, to a schedule of aggregated expected maturities on such deposits. Patriot does not record deposits at fair value on a recurring basis.

Senior Notes, Subordinated Notes, and Junior Subordinated Debt and Note Payable

Patriot does not record senior notes at fair value on a recurring basis. The fair value of the senior notes was estimated by discounting future cash flows at rates at which similar notes would be made. The carrying value is considered comparable to fair value.

Patriot does not record subordinated notes issued in June 2018 at fair value on a recurring basis. The fair value of the subordinated notes was estimated by discounting future cash flows at rates at which similar notes would be made. The carrying value is considered comparable to fair value.

Patriot does not record junior subordinated debt at fair value on a recurring basis. Junior subordinated debt reprices quarterly, as a result, the carrying amount is considered a reasonable estimate of fair value.

The Company considers its own credit worthiness in determining the fair value of its Senior Notes, Subordinated Notes, Notes Payable and Junior Subordinated Debt.

Federal Home Loan Bank Borrowings

The fair value of FHLB advances is estimated using a discounted cash flow calculation that applies current FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances. Patriot does not record FHLB advances at fair value on a recurring basis.

Off-balance sheet financial instruments

Off-balance sheet financial instruments are based on interest rate changes and fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The off-balance-sheet financial instruments (i.e., commitments to extend credit) are insignificant and are not recorded on a recurring basis.

36

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

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, 2021 and December 31, 2020:

(In thousands)		March 31, 2021				December 31, 2020
	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	$	2,593	$	2,593	$	3,006	$	3,006
Interest-bearing deposits due from banks	Level 1		81,681		81,681		31,630		31,630
Available-for-sale securities	Level 2		57,893		57,893		49,262		49,262
Other investments	Level 2		4,450		4,450		4,450		4,450
Federal Reserve Bank stock	Level 2		2,744		2,744		2,783		2,783
Federal Home Loan Bank stock	Level 2		4,503		4,503		4,503		4,503
Loans receivable, net	Level 3		666,250		663,233		719,596		716,822
Loans held for sale	Level 2		2,829		3,008		1,217		1,343
SBA servicing assets	Level 3		327		391		316		375
Other real estate owned	Level 2		1,216		1,216		1,906		1,906
Accrued interest receivable	Level 2		6,270		6,270		6,620		6,620
Interest rate swap receivable	Level 2		791		791		1,187		1,187
Financial assets, total		$	831,547	$	828,773	$	826,476	$	823,887
Financial Liabilities:
Demand deposits	Level 2	$	173,520	$	173,520	$	158,676	$	158,676
Savings deposits	Level 2		103,025		103,025		98,635		98,635
Money market deposits	Level 2		131,844		131,844		146,389		146,389
NOW accounts	Level 2		34,433		34,433		30,529		30,529
Time deposits	Level 2		231,600		232,326		210,140		210,882
Brokered deposits	Level 1		18,456		18,675		41,287		41,643
FHLB borrowings	Level 2		90,000		96,322		90,000		97,293
Senior notes	Level 2		11,946		12,022		11,927		12,028
Subordinated debt	Level 2		9,789		10,072		9,782		10,125
Junior subordinated debt owed to unconsolidated trust	Level 2		8,112		8,112		8,110		8,110
Note payable	Level 3		943		916		994		997
Accrued interest payable	Level 2		693		693		572		572
Interest rate swap liability	Level 2		791		791		1,187		1,187
Financial liabilities, total		$	815,152	$	822,751	$	808,228	$	817,066

The carrying amount of cash and noninterest bearing balances due from banks, interest-bearing deposits due from banks, and demand deposits approximates fair value, due to the short-term nature and high turnover of these balances. These amounts are included in the table above for informational purposes.

37

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

In the normal course of its operations, Patriot assumes interest rate risk (i.e., the risk that general interest rate levels will fluctuate). As a result, the fair value of the Patriot’s financial assets and liabilities are affected when interest market rates change, which change may be either favorable or unfavorable. Management attempts to mitigate interest rate risk by matching the maturities of its financial assets and liabilities. However, borrowers with fixed rate obligations are less likely to prepay their obligations in a rising interest rate environment and more likely to prepay their obligations in a falling interest rate environment. Conversely, depositors receiving fixed rates are more likely to withdraw funds before maturity in a rising interest rate environment and less likely to do so in a falling interest rate environment. Management monitors market rates of interest and the maturities of its financial assets and financial liabilities, adjusting the terms of new loans and deposits in an attempt to minimize interest rate risk. Additionally, management mitigates its overall interest rate risk through its available funds investment strategy.

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, 2021 and December 31, 2020:

(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, 2021:
U. S. Government agency mortgage-backed securities	$	-	$	22,687	$	-	$	22,687
Corporate bonds		-		17,333		-		17,333
Subordinated notes		-		9,149		-		9,149
SBA loan pools		-		8,165		-		8,165
Municipal bonds		-		559		-		559
Available-for-sale securities	$	-	$	57,893	$	-	$	57,893
Interest rate swap receivable	$	-	$	791	$	-	$	791
Interest rate swap liability	$	-	$	791	$	-	$	791
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	-	$	16,833	$	-	$	16,833
Corporate bonds		-		17,290		-		17,290
Subordinated notes		-		9,005		-		9,005
SBA loan pools		-		5,567		-		5,567
Municipal bonds		-		567		-		567
Available-for-sale securities	$	-	$	49,262	$	-	$	49,262
Interest rate swap receivable	$	-	$	1,187	$	-	$	1,187
Interest rate swap liability	$	-	$	1,187	$	-	$	1,187

Patriot measures certain financial assets and financial liabilities at fair value on a non-recurring basis. When circumstances dictate (e.g., impairment of long-lived assets, other than temporary impairment of collateral value), the carrying values of such financial assets and financial liabilities are adjusted to fair value or fair value less costs to sell, as may be appropriate.

During the three months ended March 31, 2021 and 2020, the Company had no transfers into or out of Levels 1, 2 or 3.

38

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

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, 2021 and December 31, 2020:

(In thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
March 31, 2021:
Impaired loans, net	$	26,538	Real Estate Appraisals	Discount for appraisal type	5.8%	-	20%
Other Real Estate Owned		1,216	Real Estate Appraisals	Discount for appraisal type		5.84%
SBA servicing assets		391	Discounted Cash Flows	Market discount rates	14.73%	-	14.90%
December 31, 2020:
Impaired loans, net	$	22,971	Real Estate Appraisals	Discount for appraisal type	5.8%	-	20%
Other Real Estate Owned		1,906	Real Estate Appraisals	Discount for appraisal type		5.84%
SBA servicing assets		375	Discounted Cash Flows	Market discount rates	14.73%	-	14.90%

Patriot discloses fair value information about financial instruments, whether or not recognized in the consolidated balance sheet, for which it is practicable to estimate that value. Certain financial instruments are excluded from disclosure requirements and, accordingly, the aggregate fair value amounts presented do not necessarily represent the complete underlying value of financial instruments included in the consolidated financial statements.

The estimated fair value amounts have been measured as of March 31, 2021 and December 31, 2020, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of the financial instruments measured may be different than if they had been subsequently valued.

The information presented should not be interpreted as an estimate of the total fair value of Patriot’s assets and liabilities, since only a portion of Patriot’s assets and liabilities are required to be measured at fair value for financial reporting purposes. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between Patriot’s fair value disclosures and those of other bank holding companies may not be meaningful.

39

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

"SAFE HARBOR" STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements contained in the Company’s public statements, including this one, and in particular in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may be forward looking and subject to a variety of risks and uncertainties. These factors include, but are not limited to:

(1) changes in prevailing interest rates which would affect the interest earned on the Company’s interest earning assets and the interest paid on its interest bearing liabilities;

(2) the timing of re-pricing of the Company’s interest earning assets and interest bearing liabilities;

(3) the effect of changes in governmental monetary policy;

(4) the effect of changes in regulations applicable to the Company and the Bank and the conduct of its business;

(5) changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks;

(6) the ability of competitors that are larger than the Company to provide products and services which it is impracticable for the Company to provide;

(7) the state of the economy and real estate values in the Company’s market areas, and the consequent effect on the quality of the Company’s loans;

(8) demand for loans and deposits in our market area;

(9) recent governmental initiatives that are expected to have a profound effect on the financial services industry and could dramatically change the competitive environment of the Company;

(10) other legislative or regulatory changes, including those related to residential mortgages, changes in accounting standards, and Federal Deposit Insurance Corporation (“FDIC”) premiums that may adversely affect the Company;

(11) the application of generally accepted accounting principles in the United States of America (“U.S. GAAP”), consistently applied;

(12) the fact that one period of reported results may not be indicative of future periods;

(13) the state of the economy in the greater New York metropolitan area and its particular effect on the Company's customers, vendors and communities and other such factors, including risk factors, as may be described in the Company’s other filings with the Securities and Exchange Commission (the “SEC”);

(14) political, social, legal and economic instability, civil unrest, war, catastrophic events, acts of terrorism;

(15) widespread outbreaks of infectious diseases, including the ongoing novel coronavirus (COVID-19) outbreak;

(16) changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

(17) our ability to access cost-effective funding;

(18) our ability to implement and change our business strategies;

(19) changes in the quality or composition of our loan or investment portfolios;

(20) technological changes that may be more difficult or expensive than expected;

(21) our ability to manage market risk, credit risk and operational risk in the current economic environment;

(22) our ability to enter new markets successfully and capitalize on growth opportunities;

(23) changes in consumer spending, borrowing and savings habits;

(24) our ability to retain key employees; and

(25) our compensation expense associated with equity allocated or awarded to our employees.

The following discussion should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 30, 2021 (the “2020 Form 10-K”) and the consolidated financial statements and notes thereto included in Part I, Item 1 of this Form 10-Q.

Although the Company believes that it offers the loan and deposit products and has the resources needed for continued success, future revenues and interest spreads and yields cannot be reliably predicted. These trends may cause the Company to adjust its operations in the future. Because of the foregoing and other factors, recent trends should not be considered reliable indicators of future financial results or stock prices.

40

The ongoing COVID-19 pandemic and measures intended to prevent its spread could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.

Global health concerns relating to the COVID-19 outbreak and related government actions taken to reduce the spread of the virus have been weighing on the macroeconomic environment, and the outbreak has significantly increased economic uncertainty and reduced economic activity. The outbreak has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place or total lock-down orders and business limitations and shutdowns. Such measures have significantly contributed to rising unemployment and negatively impacted consumer and business spending. The United States government has taken steps to attempt to mitigate some of the more severe anticipated economic effects of the virus, including the passage of the CARES Act, but there can be no assurance that such steps will be effective or achieve their desired results in a timely fashion.

The outbreak has adversely impacted and is likely to further adversely impact our operations and the operations of our borrowers, customers and business partners. In particular, we may experience financial losses due to a number of operational factors impacting us or our borrowers, customers or business partners, including but not limited to:

● credit losses resulting from financial stress being experienced by our borrowers as a result of the outbreak and related governmental actions, particularly in the hospitality, energy, retail and restaurant industries, but across other industries as well;

● declines in collateral values;

● third party disruptions, including outages at network providers and other suppliers;

● increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity; and

● operational failures due to changes in our normal business practices necessitated by the outbreak and related governmental actions.

These factors may remain prevalent for a significant period of time and may continue to adversely affect our business, results of operations and financial condition even after the COVID-19 outbreak has subsided.

The extent to which the coronavirus outbreak impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates. Management has identified the accounting for the allowance for loan and lease losses, the analysis and valuation of its investment securities, the valuation of deferred tax assets, the impairment of goodwill, the valuation of derivatives, and the valuation of servicing assets as certain of the Company’s most critical accounting policies and estimates in that they are important to the portrayal of the Company’s financial condition and results of operations. They require management’s most subjective and complex judgment as a result of the need to make estimates about the effect of matters that are inherently uncertain. Refer to the 2020 Form 10-K for additional information.

41

Summary

The Company reported net income for the first quarter of 2021 of $854,000 ($0.22 basic and diluted earnings per share), compared to a net loss of $1.1 million ($0.27 basic and diluted loss per share) for the first quarter of 2020. The income before income taxes was $1.2 million for first quarter of 2021, as compared to $1.4 million loss before taxes for the first quarter of 2020.

The pretax income before recognizing a payroll tax credit of $843,000 under the Employee Retention Credit program of the CARES Act, was $330,000 in the first quarter of 2021. The return to profitability in the first quarter was attributable to improving net interest margins, core deposit growth lower operating expenses, and a lower loan loss provision. These factors were partially offset by a lower loan balance as loan payoffs outpaced new loan originations. Further improvements in profitability are projected as loan balances begin to grow and SBA loan and sale activity accelerates.

In addition, the Company continues to work collaboratively with the OCC and intends to fully resolve all matters associated with the OCC Formal Agreement.

Financial Condition

As of March 31, 2021, total assets increased to $886.2 million, as compared to $880.7 million at December 31, 2020. Net Loan portfolio decreased $53.3 million or 7.4% from $719.6 million at December 31, 2020 to $666.3 million at March 31, 2021. Deposits increased $7.2 million or 1.1% from $685.7 million at December 31, 2020 to $692.9 million at March 31, 2021.

Cash and Cash Equivalents

Cash and cash equivalents increased $49.7 million, from $34.6 million at December 31, 2020 to $84.3 million at March 31, 2021. The increase in 2021 was primarily attributable to increasing retail deposits and net decrease in loan portfolio through paydown of the loans - both of which are currently invested in short term cash positions. The Company’s liquidity position is strong with liquid assets rising to 15.8% of total assets at March 31, 2021.

Investments

The following table is a summary of the Company’s available-for-sale securities portfolio, at fair value, at the dates shown:

(In thousands)	March 31,		December 31,		Increase / (Decrease)
	2021		2020		($)			(%)
U. S. Government agency mortgage-backed securities	$	22,687	$	16,833	$	5,854			34.78	%
Corporate bonds		17,333		17,290		43			0.25	%
Subordinated notes		9,149		9,005		144			1.60	%
SBA loan pools		8,165		5,567		2,598			46.67	%
Municipal bonds		559		567		(8	)		-1.41	%
Total Available-for-Sale Securities, at fair value		57,893		49,262		8,631			17.52	%
Other Investments, at cost		4,450		4,450		-			0.00	%
	$	62,343	$	53,712	$	8,631			16.07	%

Total investments increased by $8.6 million or 16.07%, from $53.7 million at December 31, 2020 to $62.3 million at March 31, 2021. This increase was primarily attributable to purchases of $10.9 million U.S. Government agency mortgage-backed securities and $3.0 million SBA loan pools, which was offset by repayments of $3.1 million principal and maturity of $1.9 million of available-for-sale securities. There were no sales of available-for-sale securities in the three months ended March 31, 2021 and 2020.

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Loans held for investment

The following table provides the composition of the Company’s loan held for investment portfolio as of March 31, 2021 and December 31, 2020:

(In thousands)	March 31, 2021						December 31, 2020
	Amount			%			Amount			%
Loan portfolio segment:
Commercial Real Estate	$	261,461			38.63	%	$	282,378			38.68	%
Residential Real Estate		147,947			21.86	%		153,851			21.07	%
Commercial and Industrial		138,966			20.54	%		144,297			19.76	%
Consumer and Other		56,485			8.35	%		67,635			9.26	%
Construction		55,523			8.21	%		66,984			9.17	%
Construction to permanent - CRE		16,294			2.41	%		15,035			2.06	%
Loans receivable, gross		676,676			100.00	%		730,180			100.00	%
Allowance for loan losses		(10,426	)					(10,584	)
Loans receivable, net	$	666,250					$	719,596

The Company’s gross loan portfolio decreased $53.5 million, from $730.2 million at December 31, 2020 to $676.7 million at March 31, 2021. The decrease in loans was primarily attributable to $69.4 million net paydown of the loans, which was partially offset by $16.0 million in purchases of loans receivable.

SBA loans held for investment were included in the commercial real estate loans and commercial and industrial loan classifications above. As of March 31, 2021 and December 31, 2020, SBA loans included in the commercial and industrial loan were $15.8 million and $15.9 million, respectively. SBA loans included in the commercial real estate loans were $6.3 million and $5.7 million, respectively.

At March 31, 2021, the net loan to deposit ratio was 96% and the net loan to total assets ratio was 75%. At December 31, 2020, these ratios were 105% and 82%, respectively.

Allowance for Loan and Lease Losses

The allowance for loan and lease losses decreased $158,000 or 1.5% from $10.6 million at December 31, 2020 to $10.4 million at March 31, 2021. The decrease was primarily attributable to the net charge-off of $158,000 in the first quarter of 2021.

Based upon the overall assessment and evaluation of the loan portfolio at March 31, 2021, management believes $10.4 million in the allowance for loan and lease losses, which represented 1.5% of gross loans outstanding, is adequate under prevailing economic conditions to absorb existing losses in the loan portfolio.

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The following table provides detail of activity in the allowance for loan and lease losses:

	Three Month Ended March 31,
(In thousands)	2021			2020
Balance at beginning of the period	$	10,584		$	10,115
Charge-offs:
Commercial Real Estate		(42	)		-
Residential Real Estate		(3	)		(1	)
Commercial and Industrial		(209	)		(4	)
Consumer and Other		(18	)		(39	)
Total charge-offs		(272	)		(44	)
Recoveries:
Commercial and Industrial		12			40
Consumer and Other		102			1
Total recoveries		114			41
Net charge-offs		(158	)		(3	)
Provision charged to earnings		-			804
Balance at end of the period	$	10,426		$	10,916
Ratios:
Net charge-offs to average loans		(0.022	)%		(0.000	)%
Allowance for loan losses to total loans		1.54	%		1.33	%

The following table provides an allocation of allowance for loan and lease losses by portfolio segment:

(In thousands)	March 31, 2021					December 31, 2020
Allowance for loan and lease losses	Amount		%			Amount		%
Commercial Real Estate	$	4,154		39.84	%	$	4,485		42.37	%
Residential Real Estate		1,909		18.31	%		1,379		13.03	%
Commercial and Industrial		3,624		34.76	%		3,284		31.03	%
Consumer and Other		382		3.66	%		295		2.79	%
Construction		280		2.69	%		739		6.98	%
Construction to permanent - CRE		77		0.74	%		162		1.53	%
Unallocated		-		0.00	%		240		2.27	%
Total	$	10,426		100.00	%	$	10,584		100.00	%

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Non-performing Assets

The following table presents non-performing assets as of March 31, 2021 and December 31, 2020:

(In thousands)
	March 31, 2021			December 31, 2020
Non-accruing loans:
Commercial Real Estate	$	17,034		$	14,534
Residential Real Estate		4,464			3,854
Commercial and Industrial		2,532			700
Consumer and Other		557			917
Total non-accruing loans		24,587			20,005
Loans past due over 90 days and still accruing		-			16
Other real estate owned		1,216			1,906
Total nonperforming assets	$	25,803		$	21,927
Nonperforming assets to total assets		2.91	%		2.49	%
Nonperforming loans to total loans, net		3.69	%		2.78	%

The $24.6 million of non-accrual loans at March 31, 2021 was comprised of 28 borrowers, for which a specific reserve of $1.9 million was established. Four TDR loans of total $10.1 million were included in the non-accrual loans. For collateral dependent loans, the Bank has obtained appraisal reports from independent licensed appraisal firms and discounted those values based on the Bank’s experience selling OREO properties and for estimated selling costs to determine estimated impairment. For cash flow dependent loans, the Bank determined the reserve based on the present value of expected future cash flows discounted at the loan's effective interest rate. Non-accrual loans are included in the impaired loans. The Bank evaluated the impaired loans and determined that a specific reserve of $1.9 million was established as of March 31, 2021.

As of December 31, 2020, the $20.0 million of non-accrual loans was comprised of 21 borrowers, for which a specific reserve of $1.4 million was established. Six TDR loans of total $11.5 million were included in the non-accrual loans as of December 31, 2020.

Loans held for sale

SBA loans held for sale totaled $2.8 million and $1.2 million as of March 31, 2021 and December 31, 2020, respectively. SBA loans held for sale represent the guaranteed portion of SBA loans and are reflected at the lower of aggregate cost or market value. SBA loans held for sale at March 31, 2021, consisted of $1.9 million commercial real estate and $938,000 commercial and industrial loans, respectively. SBA loans held for sale at December 31, 2020, consisted entirely of $1.2 million commercial and industrial loans.

Goodwill

The Company completed its acquisition of Prime Bank in May 2018, and recorded $1.1 million of goodwill after adjustments as of May 10, 2019. No further adjustment to the goodwill was made as of March 31, 2021.

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Deferred Taxes

Deferred tax assets were $11.3 million and $11.5 million at March 31, 2021 and December 31, 2020, respectively. Deferred tax assets consists predominately of net operating losses, capitalized costs and allowances for loan losses.

The effective tax rate for the three months ended March 31, 2021 was 27.2%, compared to the effective tax (benefit) rate of (25.1%) for the three months ended March 31, 2020. The Company’s effective rates for both periods were affected primarily by states taxes and non-deductible expenses.

Patriot anticipates utilizing the net operating loss carry forwards to reduce income taxes otherwise payable on current and future years taxable income.

Patriot evaluates its ability to realize its net deferred tax assets on a quarterly basis. In doing so, management considers all available evidence, both positive and negative, to determine whether it is more likely than not that the deferred tax assets will be realized. In addition, management assesses tax attributes including available tax planning strategies and net operating loss carry-forwards that do not begin to expire until the year 2030. Based upon this evidence, management recorded a valuation allowance of $1.9 million as of December 31, 2020. Patriot continues to maintain the valuation allowance of $1.9 million as of March 31, 2021.

The Company will continue to evaluate its ability to realize its net deferred tax assets. If future evidence suggests that it is more likely than not that additional deferred tax assets will not be realized, the valuation allowance will be adjusted.

Deposits

The following table is a summary of the Company’s deposits at the dates shown:

(In thousands)					Increase/(Decrease)
	March 31, 2021		December 31, 2020		$			%
Non-interest bearing	$	173,520	$	158,676	$	14,844			9.35	%
Interest bearing:
NOW		34,433		30,529		3,904			12.79	%
Savings		103,025		98,635		4,390			4.45	%
Money market		131,844		146,389		(14,545	)		(9.94	)%
Certificates of deposit, less than $250,000		165,130		160,968		4,162			2.59	%
Certificates of deposit, $250,000 or greater		66,470		49,172		17,298			35.18	%
Brokered deposits		18,456		41,287		(22,831	)		(55.30	)%
Total Interest bearing		519,358		526,980		(7,622	)		(1.45	)%
Total Deposits	$	692,878	$	685,656	$	7,222			1.05	%

Deposits increased $7.2 million or 1.1%, from $685.7 million at December 31, 2020 to $692.9 million at March 31, 2021. Excluding the decline in brokered deposits, total deposits increased $30.0 million during the quarter due to stronger retail banking activity in the first quarter along with a $9.4 million growth in the prepaid debit card business during the first quarter of 2021.

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Borrowings

Total borrowings were $120.8 million at both March 31, 2021 and December 31, 2020. Borrowings consist primarily of FHLB advances, senior notes, subordinated notes, junior subordinated debentures and a note payable. The senior notes, subordinated notes and junior subordinated debentures contain affirmative covenants that require the Company to maintain its and its subsidiaries’ legal entity and tax status, pay its income tax obligations on a timely basis, and comply with SEC and FDIC reporting requirements.

Federal Home Loan Bank borrowings

The Company is a member of the Federal Home Loan Bank of Boston ("FHLB-B"). Borrowings from the FHLB-B are limited to a percentage of the value of qualified collateral, as defined on the FHLB-B Statement of Products Policy. Qualified collateral, as defined, primarily consists of mortgage-backed securities and loans receivable that are required to be free and clear of liens and encumbrances, and may not be pledged for any other purposes. As of March 31, 2021, the Bank had $65.4 million of available borrowing capacity from the FHLB-B.

FHLB-B advances are structured to facilitate the Bank’s management of its balance sheet and liquidity requirements. At March 31, 2021 and December 31, 2020, outstanding advances from the FHLB-B aggregated $90.0 million for both periods.

At March 31, 2021, advances of $90.0 million outstanding bore fixed rates of interest ranging from 2.40% to 3.61% with maturities ranging from 2.3 years to 3.5 years. The FHLB-B advances with fixed interest rates have a weighted average interest rate of 3.26%.

At March 31, 2021, collateral for FHLB-B borrowings consisted of a mixture of real estate loans and securities with book value of $244.7 million. Borrowing capacity under this line totaled $67.4 million at March 31, 2021.

In addition, Patriot has a $2.0 million revolving line of credit with the FHLB-B. For the three months ended March 31, 2021 and 2020, no funds had been borrowed under the line of credit.

Interest expense incurred for the three months ended March 31, 2021 and 2020 were $733,000 and $697,000, respectively.

Correspondent Bank - Line of Credit

Patriot has entered into unsecured federal funds sweep and federal funds line of credit facility agreements with certain correspondent banks. Borrowings available under the agreements totaled $5 million at March 31, 2021 and $5 million at December 31, 2020. The purpose of the agreements is to provide a credit facility intended to satisfy overnight federal account balance requirements and to provide for daily settlement of FRB, Automated Clearing House (ACH), and other clearinghouse transactions.

There was no outstanding balance under the agreements at March 31, 2021 and December 31, 2020. No interest expense incurred for the three months ended March 31, 2021 and 2020.

Other Borrowing

In August 2020, Patriot was approved to pledge commercial and industrial loans and leases, commercial real estate, construction loans and one-to-four family first lien loans under the Federal Reserve Bank of New York’s (“FRBNY”) Borrower-in-Custody program. As of March 31, 2021, Patriot had pledged eligible loans with a book value of $41.6 million and a collateral value of $28.0 million as collateral to support borrowing capacity at the FRBNY. There was no outstanding balance under the agreements at March 31, 2021.

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Senior notes

On December 22, 2016, the Company issued $12 million of senior notes bearing interest at 7% per annum and maturing on December 22, 2021 (the “Senior Notes”). Interest on the Senior Notes is payable semi-annually on June 22 and December 22 of each year beginning on June 22, 2017.

In connection with the issuance of the Senior Notes, the Company incurred $374,000 of costs, which are being amortized over the term of the Senior Notes to recognize a constant rate of interest expense. At March 31, 2021 and December 31, 2020, $54,000 and $73,000 of unamortized debt issuance costs were deducted from the face amount of the Senior Notes included in the consolidated balance sheet, respectively.

The Senior Notes are unsecured, rank equally with all other senior obligations of the Company, are not redeemable nor may they be put to the Company by the holders of the notes, and require no payment of principal until maturity.

For the three months ended March 31, 2021 and 2020, the Company recognized interest expense of $229,000 and $229,000, respectively.

Subordinated notes

On June 29, 2018, the Company entered into certain subordinated note purchase agreements with two institutional accredited investors and completed a private placement of $10 million of fixed-to-floating rate subordinated notes with the maturity date of March 31, 2028 (the “Subordinated Notes”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.

The Subordinated Notes will initially bear interest at 6.25% per annum, from and including June 29, 2018, to but excluding, September 30, 2023, payable semi-annually in arrears. From and including September 30, 2023, until but excluding September 30, 2028 or an early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month LIBOR (but not less than zero) plus 332.5 basis points, payable quarterly in arrears. The Company may, at its option, beginning on September 30, 2023 and on any scheduled interest payment date thereafter, redeem the Subordinated Notes. Interest payable on the Subordinated Notes began on December 30, 2018.

In connection with the issuance of the Subordinated Notes, the Company incurred $291,000 of debt issuance costs, which are being amortized over the term of the Subordinated Notes to recognize a constant rate of interest expense. At March 31, 2021 and December 31, 2020, $211,000 and $218,000 of unamortized debt issuance costs were deducted from the face amount of the Subordinated Notes included in the consolidated balance sheet, respectively.

For the three months ended March 31, 2021 and 2020, the Company recognized interest expense of $163,000 and $164,000, respectively.

Junior subordinated debt owed to unconsolidated trust

In 2003, the Patriot National Statutory Trust I (“the Trust”), which has no independent assets and is wholly-owned by the Company, issued $8.0 million of trust preferred securities. The proceeds, net of a $240,000 placement fee, were invested in junior subordinated debentures issued by the Company, which invested the proceeds in the Bank. The Bank used the proceeds to fund its operations.

Trust preferred securities currently qualify for up to 25% of the Company’s Tier I Capital, with the excess qualifying as Tier 2 Capital.

The junior subordinated debentures are unsecured obligations of the Company. The debentures are subordinate and junior in right of payment to all present and future senior indebtedness of the Company. In addition to its obligations under the junior subordinated debentures and in conjunction with the Trust, the Company issued an unconditional guarantee of the trust preferred securities.

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The junior subordinated debentures bear interest at three-month LIBOR plus 3.15% (3.35% at March 31, 2021) and mature on March 26, 2033, at which time the principal amount borrowed will be due. The placement fee of $240,000 is amortized and included as a component of the periodic interest expense on the junior subordinated debentures, in order to produce a constant rate of interest expense. As of March 31, 2021 and December 31, 2020, the unamortized placement fee deducted from the face amount of the junior subordinated debt owed to the unconsolidated trust amounted to $136,000 and $138,000, respectively, and accrued interest on the junior subordinated debentures was $4,000 and $5,000, respectively.

For the three months ended March 31, 2021 and 2020, the Company recognized interest expense of $70,000 and $104,000, respectively.

At its option, exercisable on a quarterly basis, the Company may redeem the junior subordinated debentures from the Trust, which would then redeem the trust preferred securities.

Note Payable

In September 2015, the Bank purchased the property in which its Fairfield, Connecticut branch is located for approximately $2.0 million, a property it had been leasing until that date. The purchase price was primarily satisfied by issuing the seller a $2.0 million, nine-year, promissory note bearing interest at a fixed rate of 1.75% per annum. As of March 31, 2021 and December 31, 2020, the note had a balance outstanding of $943,000 and $994,000, respectively. The note matures in August 2024 and requires a balloon payment of approximately $234,000 at that time. The note is secured by a first Mortgage Deed and Security Agreement on the purchased property.

For the three months ended March 31, 2021 and 2020, the Company recognized interest expense of $4,000 and $5,000, respectively.

Equity

Equity increased $718,000, from $63.2 million at December 31, 2020 to $63.9 million at March 31, 2021, primarily due to $854,000 of net income and $34,000 of equity compensation, which was offset by $170,000 of net investment portfolio unrealized loss for the three months ended March 31, 2021.

Off-Balance Sheet Commitments

The Company’s off-balance sheet commitments, which primarily consist of commitments to lend, increased $6.4 million from $122.4 million at December 31, 2020 to $128.8 million at March 31, 2021.

Derivatives

As of March 31, 2021, Patriot had entered into four interest rate swaps (“swaps”). Two swaps are with a loan customer to provide a facility to mitigate the fluctuations in the variable rate on the respective loan. The other two swaps are with an outside third party. The customer interest rate swaps are matched in offsetting terms to the third party interest rate swaps. The swaps are reported at fair value in other assets or other liabilities on the consolidated balance sheets. Patriot’s swaps are derivatives, but are not designated as hedging instruments, thus any net gain or loss resulting from changes in the fair value is recognized in other noninterest income. The Company recognized no gain on the swaps for the three months ended March 31, 2021 and 2020, respectively.

Further discussion of the fair value of derivatives is set forth in Note 8 to the consolidated financial statements.

49

RESULTS OF OPERATIONS

Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential

The following tables present daily average balance sheets, interest income, interest expense and the corresponding yields earned and rates paid for the three months ended March 31, 2021 and 2020:

(In thousands)	Three Month Ended March 31,
	2021							2020
	Daily Average Balance ($)			Interest ($)		Yield (%)		Daily Average Balance ($)			Interest ($)		Yield (%)
ASSETS
Interest Earning Assets:
Loans	$	702,539		$	7,743		4.47	$	833,001		$	10,033		4.83
Investments		61,811			344		2.23		59,705			554		3.71
Cash equivalents and other		66,080			24		0.15		41,340			135		1.31
Total interest earning assets		830,430			8,111		3.96		934,046			10,722		4.60
Cash and due from banks		2,874							2,415
Allowance for loan losses		(10,652	)						(10,155	)
OREO		1,569							2,400
Other assets		60,971							59,702
Total Assets	$	885,192						$	988,408
Liabilities
Interest bearing liabilities:
Deposits	$	529,567		$	785		0.60	$	702,730		$	3,200		1.83
Borrowings		90,778			733		3.27		99,139			697		2.82
Senior notes		11,935			229		7.67		11,860			229		7.72
Subordinated debt		17,895			234		5.30		17,857			268		6.02
Note Payable and other		958			4		1.69		1,160			5		1.73
Total interest bearing liabilities		651,133			1,985		1.24		832,746			4,399		2.12
Demand deposits		161,588							79,619
Other liabilities		8,587							8,511
Total Liabilities		821,308							920,876
Shareholders' equity		63,884							67,532
Total Liabilities and Shareholders' Equity	$	885,192						$	988,408
Net interest income				$	6,126						$	6,323
Interest margin							2.99							2.72
Interest spread							2.72							2.48

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The following table presents the dollar amount of changes in interest income and interest expense for the major categories of our interest-bearing assets and interest-bearing liabilities for the three months ended March 31, 2021 and 2020:

	Three Month Ended March 31,
	2021 compared to 2020
(In thousands)	Increase/(Decrease)
	Daily Average Balance			Volume			Rate			Total
Interest Earning Assets:
Loans	$	(130,462	)	$	(1,506	)	$	(784	)	$	(2,290	)
Investments		2,106			14			(224	)		(210	)
Cash equivalents and other		24,740			79			(190	)		(111	)
Total interest earning assets		(103,616	)		(1,413	)		(1,198	)		(2,611	)
Interest bearing liabilities:
Deposit		(173,163	)		(1,083	)		(1,332	)		(2,415	)
Borrowings		(8,361	)		(61	)		97			36
Senior notes		75			-			-			-
Subordinated debt		38			-			(34	)		(34	)
Note payable and other		(202	)		(1	)		-			(1	)
Total interest bearing liabilities		(181,613	)		(1,145	)		(1,269	)		(2,414	)
Net interest income	$	77,997		$	(268	)	$	71		$	(197	)

For the quarter ended March 31, 2021, interest income and dividend income decreased $2.6 million or 24.4% as compared to the quarter ended March 31, 2020. Total interest expense decreased $2.4 million or 54.9% as compared to the quarter ended March 31, 2020.

Net interest income was $6.1 million for the quarter ended March 31, 2021, which decreased 3.1% from $6.3 million for the quarter ended March 31, 2020.

Net interest margin for the three months ended March 31, 2021 and 2020 were 2.99% and 2.72%, respectively.

Compared to the prior year, net interest income was impacted by lower average loan volume associated with the decline in business activity due to the COVID 19 pandemic. While rates earned on earning assets declined 64 basis points since the first quarter of 2020 due to declining market interest rates, rates paid declined more dramatically by 98 basis points as higher cost retail CD and brokered deposits were replaced by low-cost demand deposits added through the Company’s prepaid deposit program. Higher net interest margins are expected to sustain and grow in the coming quarters.

Provision for Loan Losses

The provision for loan losses for three months ended March 31, 2021 was zero, as compared to $804,000 for the three months ended March 31, 2020. No provision was required for the first quarter of 2021 as there was no shortfall in allowance for loan lease losses at March 31, 2021 due to the declining loan balance and lower pooled reserves. In the first quarter of 2020, the provision for loan losses was primarily due to an additional reserve attributable to COVID-19 pandemic.

51

Non-interest income

Non-interest income for the three months ended March 31, 2021 and 2020 was $442,000, as compared to $421,000 for the three months ended March 31, 2020. This was primarily attributable to an increase in gain on sale of SBA loans in the three months ended March 31, 2021.

Non-interest expense

Non-interest expense for the three months ended March 31, 2021 decreased to $5.4 million, as compared to $7.4 million for the three months ended March 31, 2020. The decrease in non-interest expense in 2021 was primarily driven by an Employee Retention Credit of $843,000, a reduction of $800,000 in compensation and benefits due to staffing adjustments made during 2020, and a reduction of $212,000 in regulatory assessments expense.

Provision (benefit) for income taxes

The Company reported provision for income taxes of $319,000 for three months ended March 31, 2021, as compared to a benefit for income taxes of $359,000 for the three months ended March 31, 2020. The increase mainly reflected the impact of the net income in 2021.

Liquidity

The Company’s balance sheet liquidity to total assets ratio was 15.8% at March 31, 2021, compared to 9.0% at December 31, 2020. Liquidity including readily available off-balance sheet funding sources was 27.1% at March 31, 2021, compared to 21.7% at December 31, 2020.

The following categories of assets are considered balance sheet liquidity: cash and due from banks, federal funds sold (if any), short-term investments (if any) and unpledged available-for-sale securities. In addition, off balance sheet funding sources include collateral based borrowing available from the FHLB, correspondent bank borrowing lines, and brokered deposits subject to internal limitations.

Liquidity is a measure of the Company’s ability to generate adequate cash to meet its financial obligations. The principal cash requirements of a financial institution are to cover downward fluctuations in deposit accounts. Management believes the Company’s liquid assets provide sufficient coverage to satisfy loan demand, cover potential fluctuations in deposit accounts, and to meet other anticipated operational cash requirements.

Capital

The following table illustrates the Company’s and the Bank’s regulatory capital ratios as of March 31, 2021 and December 31, 2020:

	Patriot National Bancorp, Inc.								Patriot Bank, N.A.
(In thousands)	March 31, 2021				December 31, 2020				March 31, 2021				December 31, 2020
	Amount ($)		Ratio (%)		Amount ($)		Ratio (%)		Amount ($)		Ratio (%)		Amount ($)		Ratio (%)
Total Capital (to risk weighted assets)	$	88,039		11.804	$	87,428		11.132	$	98,538		13.317	$	97,608		12.510
Tier 1 Capital (to risk weighted assets)		68,703		9.212		67,602		8.608		89,274		12.065		87,844		11.258
Common Equity Tier 1 Capital (to risk weighted assets)		60,703		8.139		59,602		7.589		89,274		12.065		87,844		11.258
Tier 1 Leverage Capital (to average assets)		68,703		7.791		67,602		7.539		89,274		10.122		87,844		9.794

52

Capital adequacy is one of the most important factors used to determine the safety and soundness of individual banks and the banking system. Under the regulatory framework for prompt correction action, to be considered “well capitalized,” an institution must generally have a leverage capital ratio of at least 9.0%, CET1 capital ratio at least 6.5%, a Tier 1 risk-based capital ratio of at least 8.0% and a total risk-based capital ratio of at least 10%. However, the OCC has the discretion to require increased capital ratios.

Under the final capital rules that became effective on January 1, 2015, there is a requirement for a CET1 Capital conservation buffer of 2.5% of risk-weighted assets, which is in addition to the other minimum risk-based capital standards in the rule. Institutions that do not maintain this required capital buffer become subject to progressively more stringent limitations on the percentage of earnings that may be distributed to shareholders or used for stock repurchases and on the payment of discretionary bonuses to senior executive management.

The capital buffer requirement is being phased in over three years beginning in 2016. The capital conversation buffer increased to 2.5% for 2020 and 2021, which has been included in the minimum capital adequacy ratios in the table above.

The capital buffer requirement effectively raises the Bank’s minimum required Total Capital ratio to 10.5%, the Tier 1 Capital ratio to 8.5%, and the CET1 Capital ratio to 7.0% on a fully phased-in basis, which was effective on January 1, 2019. As of March 31, 2021, Patriot satisfies all capital adequacy requirements on a fully phased-in basis.

At March 31, 2021, the Bank exceeded all of its regulatory capital requirements with a Tier 1 leverage capital level of 10.1% of adjusted total assets of $89.3 million, which is above the well-capitalized required level of 9.0%; and total risk-based capital of $98.5 million, or 13.3% of risk-weighted assets, which is above the well-capitalized required level of 11.0% of risk weighted assets. At December 31, 2020, the Bank exceeded all of its regulatory capital requirements with a Tier 1 leverage capital level of $87.8 million, or 9.8% of adjusted total assets, which is above the well-capitalized required level of 9.0%; total risk-based capital of $97.6 million, or 12.5% of risk-weighted assets, which is above the well-capitalized required level of 11.0% of risk-weighted assets. Accordingly, the Bank was categorized as well capitalized as of March 31, 2021 and December 31, 2020. Management is not aware of any conditions or events since the most recent notification that would change the Bank’s category.

Management continuously assesses the adequacy of the Bank’s capital with the goal to maintain a “well capitalized” classification.

IMPACT OF INFLATION AND CHANGING PRICES

The Company’s consolidated financial statements have been prepared in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the effect of general levels of inflation. Interest rates do not necessarily move in the same direction or with the same magnitude as the prices of goods and services. Notwithstanding this, inflation can directly affect the value of loan collateral, in particular, real estate. Inflation, deflation or disinflation could significantly affect the Company’s earnings in future periods.

53

Item 3: Quantitative and Qualitative Disclosures about Market Risk

Market risk is defined as the sensitivity of income to fluctuations in interest rates, foreign exchange rates, equity prices, commodity prices and other market-driven rates or prices. The Company’s market risk is primarily limited to interest rate risk.

The Company’s goal is to maximize long term profitability while minimizing its exposure to interest rate fluctuations. The first priority is to structure and price the Company’s assets and liabilities to maintain an acceptable interest rate spread while reducing the net effect of changes in interest rates. In order to accomplish this, the focus is on maintaining a proper balance between the timing and volume of assets and liabilities re-pricing within the balance sheet. One method of achieving this balance is to originate variable rate loans for the portfolio and purchase short-term investments to offset the increasing short-term re-pricing of the liability side of the balance sheet. In fact, a number of the interest-bearing deposit products have no contractual maturity. Therefore, deposit balances may run off unexpectedly due to changing market conditions. Additionally, loans and investments with longer term rate adjustment frequencies can be matched against longer term deposits and borrowings to lock in a desirable spread.

The exposure to interest rate risk is monitored by the Management Asset and Liability Committee consisting of senior management personnel. The Committee reviews the interrelationships within the balance sheet to maximize net interest income within acceptable levels of risk. This Committee reports to the Board of Directors. In addition to the Management Asset and Liability Committee, there is a Board Asset and Liability Committee (“ALCO”), which meets quarterly. ALCO monitors the interest rate risk analyses, reviews investment transactions during the period and determines compliance with the Company’s Investment, ALCO and Liquidity policies.

Management analyzes the Company’s interest rate sensitivity position to manage the risk associated with interest rate movements through the use of interest income simulation and gap analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest sensitive.” An asset or liability is said to be interest sensitive within a specific time period if it will mature or reprice within that time period.

Management’s goal is to manage asset and liability positions to moderate the effects of interest rate fluctuations on net interest income. Interest income simulations are completed quarterly and presented to ALCO. The simulations provide an estimate of the impact of changes in interest rates on net interest income under a range of assumptions. Changes to these assumptions can significantly affect the results of the simulations. The simulation incorporates assumptions regarding the potential timing in the repricing of certain assets and liabilities when market rates change and the changes in spreads between different market rates.

Simulation analysis is only an estimate of the Company’s interest rate risk exposure at a particular point in time. Management regularly reviews the potential effect changes in interest rates could have on the repayment of rate-sensitive assets and funding requirements of rate-sensitive liabilities.

54

The tables below set forth examples of changes in estimated net interest income and the estimated net portfolio value based on projected scenarios of interest rate increases and decreases. The analyses indicate the rate risk embedded in the Company’s portfolio at the dates indicated should all interest rates instantaneously rise or fall. The results of these changes are added to or subtracted from the base case; however, there are certain limitations to these types of analyses. Rate changes are rarely instantaneous and these analyses may therefore overstate the impact of short-term repricings. As a result of the historically low interest rate environment, the calculated effects of the 100 and 200 basis point downward shocks cannot absolutely reflect the risk to earnings and equity, since the interest rates on certain balance sheet items have approached their minimums. Therefore, it is not possible for the analyses to fully measure the true impact of these downward shocks.

(In thousands)	Net Portfolio Value - Performance Summary
	As of March 31, 2021								As of December 31, 2020
Projected Interest Rate Scenario	Estimated Value		Change from Base ($)			Change from Base (%)			Estimated Value		Change from Base ($)		Change from Base (%)
+200	$	120,260	$	4,061			3.5		$	111,300	$	2,524		2.3
+100		119,641		3,442			3.0			110,657		1,881		1.7
BASE		116,199		-			-			108,776		-		-
-100		116,045		(154	)		(0.1	)		112,229		3,453		3.2
-200		121,952		5,753			5.0			129,821		21,045		19.3

(In thousands)	Net Interest Income - Performance Summary
	Year ended March 31, 2021								Year ended December 31, 2020
Projected Interest Rate Scenario	Estimated Value		Change from Base ($)			Change from Base (%)			Estimated Value		Change from Base ($)		Change from Base (%)
+200	$	28,400	$	2,768			10.8		$	28,959	$	1,926		7.1
+100		27,056		1,424			5.6			27,946		913		3.4
BASE		25,632		-			-			27,033		-		-
-100		25,408		(224	)		(0.9	)		27,162		129		0.5
-200		25,364		(268	)		(1.0	)		27,215		182		0.7

55

Item 4: Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be disclosed timely, is accumulated and communicated to management in a timely fashion. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management is necessarily required to use judgment in evaluating controls and procedures.

An evaluation of the effectiveness of the Company’s disclosure controls and procedures was performed by the Company’s management, with the participation of the Company’s Chief Executive Officer and its Chief Financial Officer, as of the end of the period covered by this report. As used herein, “disclosure controls and procedures” means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management has concluded that Patriot’s disclosure controls and procedures were effective for the period ended March 31, 2021.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the Company’s fiscal quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting despite the fact that some of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls over financial reporting to minimize any related impact on their effectiveness.

56

PART II - OTHER INFORMATION

Item 1: Legal Proceedings

From time to time we are a party to various litigation matters incidental to the conduct of our business and otherwise. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, future prospects, financial condition, liquidity, results of operation, cash flows or capital levels.

Item 5: Other Information

None.

57

ITEM 6:     Exhibits

The exhibits marked with the section symbol (#) are interactive data files.

No.	Description
3(i)	Certificate of Incorporation of Patriot National Bancorp, Inc. (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed on December 1, 1999).
3(i)(A)	Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp, Inc. dated July 16, 2004 (incorporated by reference to Exhibit 3(i)(A) to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2004 filed on March 25, 2005).
3(i)(B)	Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp, Inc. dated June 15, 2006 (incorporated by reference to Exhibit 3(i)(B) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 filed on November 14, 2006).
3(i) (C)	Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp Inc. dated October 6, 2010 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report Form 8-K filed on October 21, 2010)
3(ii)	Amended and Restated By-laws of Patriot National Bancorp, Inc. (incorporated by reference to Exhibit 3(ii) to the Company’s Current Report on Form 8-K filed on November 1, 2010)
31(1)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31(2)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32*	Section 1350 Certifications
101.INS#	XBRL Instance Document
101.SCH#	XBRL Schema Document
101.CAL#	XBRL Calculation Linkbase Document
101.LAB#	XBRL Labels Linkbase Document
101.PRE#	XBRL Presentation Linkbase Document
101.DEF#	XBRL Definition Linkbase Document

The exhibits marked with the section symbol (#) are interactive data files.

* The certification is being furnished and shall not be deemed filed.

58

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 14, 2021

Patriot National Bancorp, Inc. (Registrant)
By:	/s/ Joseph D. Perillo
	Joseph D. Perillo
	Executive Vice President and Chief Financial Officer

59

EX-31.1

EXHIBIT 31 (1)

Certification

By Chief Executive Officer

Pursuant to Rule 13a-14

I, Robert G. Russell, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Patriot National Bancorp, Inc;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America;

(c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Robert G. Russell

Robert G. Russell

Chief Executive Officer

(Principal Executive Officer)

May 14, 2021

EX-31.2

EXHIBIT 31 (2)

Certification

By Principal Financial Officer

Pursuant to Rule 13a-14

I, Joseph D. Perillo, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Patriot National Bancorp, Inc;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America;

(c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Joseph D. Perillo          

Joseph D. Perillo         

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

May 14, 2021

EX-32

Exhibit 32

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Patriot National Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Robert G. Russell and Joseph D. Perillo, the Chief Executive Officer and the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Robert G. Russell Robert G. Russell Chief Executive Officer /s/ Joseph D. Perillo Joseph D. Perillo Chief Financial Officer
May 14, 2021

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission and shall not be considered filed as part of the Report.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 14, 2021
Document Information [Line Items]
Entity Registrant Name	PATRIOT NATIONAL BANCORP INC
Entity Central Index Key	0001098146
Trading Symbol	pnbk
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		3,946,576
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Title of 12(b) Security	Common Stock

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Cash and due from banks:
Noninterest bearing deposits and cash	$ 2,593	$ 3,006
Interest bearing deposits	81,681	31,630
Total cash and cash equivalents	84,274	34,636
Investment securities:
Available-for-sale securities, at fair value	57,893	49,262
Other investments, at cost	4,450	4,450
Total investment securities	62,343	53,712
Federal Reserve Bank stock, at cost	2,744	2,783
Federal Home Loan Bank stock, at cost	4,503	4,503
Loans receivable (net of allowance for loan losses: 2021: $10,426 and 2020: $10,584)	666,250	719,596
Loans held for sale	2,829	1,217
Accrued interest and dividends receivable	6,270	6,620
Premises and equipment, net	33,128	33,423
Other real estate owned	1,216	1,906
Deferred tax asset, net	11,274	11,496
Goodwill	1,107	1,107
Core deposit intangible, net	331	343
Other assets	9,919	9,387
Total assets	886,188	880,729
Deposits:
Noninterest bearing deposits	173,520	158,676
Interest bearing deposits	519,358	526,980
Total deposits	692,878	685,656
Federal Home Loan Bank and correspondent bank borrowings	90,000	90,000
Senior notes, net	11,946	11,927
Subordinated debt, net	9,789	9,782
Junior subordinated debt owed to unconsolidated trust, net	8,112	8,110
Note payable	943	994
Advances from borrowers for taxes and insurance	2,158	3,786
Accrued expenses and other liabilities	6,425	7,255
Total liabilities	822,251	817,510
Commitments and Contingencies
Shareholders' equity
Preferred stock, no par value; 1,000,000 shares authorized, no shares issued and outstanding	0	0
Common stock, $.01 par value, 100,000,000 shares authorized; As of March 31, 2021: 4,018,013 shares issued; 3,944,272 shares outstanding; As of December 31, 2020: 4,017,313 shares issued; 3,943,572 shares outstanding;	106,363	106,329
Accumulated deficit	(41,738)	(42,592)
Accumulated other comprehensive loss	(688)	(518)
Total shareholders' equity	63,937	63,219
Total liabilities and shareholders' equity	$ 886,188	$ 880,729

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Net of allowance for loan and lease losses	$ 10,426	$ 10,584
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	4,018,013	4,017,313
Common stock, shares outstanding (in shares)	3,944,272	3,943,572

XML

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Interest and Dividend Income
Interest and fees on loans	$ 7,743	$ 10,033
Interest on investment securities	310	416
Dividends on investment securities	34	138
Other interest income	24	135
Total interest and dividend income	8,111	10,722
Interest Expense
Interest on deposits	785	3,200
Interest on Federal Home Loan Bank borrowings	733	697
Interest on senior debt	229	229
Interest on subordinated debt	234	268
Interest on note payable and other	4	5
Total interest expense	1,985	4,399
Net interest income	6,126	6,323
Provision for Loan Losses		804
Net interest income after provision for loan losses	6,126	5,519
Non-interest Income
Loan application, inspection and processing fees	63	53
Deposit fees and service charges	65	114
Gains on sales of loans	94	12
Rental income	130	131
Other income	90	111
Total non-interest income	442	421
Non-interest Expense
Salaries and benefits	2,216	3,861
Occupancy and equipment expense	920	949
Data processing expense	350	390
Professional and other outside services	852	784
Project expenses, net	10	94
Advertising and promotional expense	62	147
Loan administration and processing expense	24	24
Regulatory assessments	228	440
Insurance expense, net	60	70
Communications, stationary and supplies	145	120
Other operating expense	528	492
Total non-interest expense	5,395	7,371
Income (loss) before income taxes	1,173	(1,431)
Provision (benefit) for income taxes	319	(359)
Net income (loss)	$ 854	$ (1,072)
Basic earnings (loss) per share (in dollars per share)	$ 0.22	$ (0.27)
Diluted earnings (loss) per share (in dollars per share)	$ 0.22	$ (0.27)

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net income (loss)	$ 854	$ (1,072)
Other comprehensive loss
Unrealized holding loss on securities	(229)	(1,808)
Income tax effect	59	466
Total other comprehensive loss	(170)	(1,342)
Comprehensive income (loss)	$ 684	$ (2,414)

XML

Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock Outstanding [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2019	3,930,669
Balance at Dec. 31, 2019	$ 106,170	$ (38,773)	$ (403)	$ 66,994
Net income (loss)		(1,072)		(1,072)
Unrealized holding gain (loss) on available-for-sale securities, net of tax			(1,342)	(1,342)
Total comprehensive income		(1,072)	(1,342)	(2,414)
Share-based compensation expense	$ 43			43
Vesting of restricted stock (in shares)	2,172
Balance (in shares) at Mar. 31, 2020	3,932,841
Balance at Mar. 31, 2020	$ 106,213	(39,845)	(1,745)	64,623
Balance (in shares) at Dec. 31, 2020	3,943,572
Balance at Dec. 31, 2020	$ 106,329	(42,592)	(518)	63,219
Net income (loss)		854		854
Unrealized holding gain (loss) on available-for-sale securities, net of tax			(170)	(170)
Total comprehensive income		854	(170)	684
Share-based compensation expense	$ 34			34
Vesting of restricted stock (in shares)	700
Balance (in shares) at Mar. 31, 2021	3,944,272
Balance at Mar. 31, 2021	$ 106,363	$ (41,738)	$ (688)	$ 63,937

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash Flows from Operating Activities:
Net income (loss)	$ 854,000	$ (1,072,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization and accretion of investment premiums and discounts, net	89,000	44,000
Amortization and accretion of purchase loan premiums and discounts	285,000	190,000
Amortization of debt issuance costs	28,000	28,000
Amortization of core deposit intangible	12,000	18,000
Amortization of servicing assets of sold SBA loans	6,000	5,000
Provision for loan losses		804,000
Depreciation and amortization	384,000	392,000
Share-based compensation	34,000	43,000
Decrease (increase) in deferred income taxes	281,000	(390,000)
Originations of SBA loans held for sale	(2,805,000)	(2,566,000)
Proceeds from sale of SBA loans held for sale	1,006,000	144,000
Gains on sale of SBA loans held for sale, net	(94,000)	(12,000)
Net gain on sale of other real estate owned	(2,000)
Changes in assets and liabilities:
(Increase) decrease in accrued interest and dividends receivable	350,000	(198,000)
Increase in other assets	(1,025,000)	(564,000)
Decrease in accrued expenses and other liabilities	(237,000)	(1,179,000)
Net cash used in operating activities	(834,000)	(4,313,000)
Cash Flows from Investing Activities:
Proceeds from maturity or sales on available-for-sale securities	1,886,000
Principal repayments on available-for-sale securities	3,066,000	1,635,000
Purchases of available-for-sale securities	(13,901,000)
Redemption of Federal Reserve Bank stock	39,000
Decrease in originated loans receivable, net	69,366,000	11,873,000
Purchases of loans receivable	(16,041,000)	(19,025,000)
Purchases of premises and equipment	(178,000)	(3,000)
Proceeds from sale of other real estate owned	692,000
Net cash provided by (used in) investing activities	44,929,000	(5,520,000)
Cash Flows from Financing Activities:
Increase in deposits, net	7,222,000	33,679,000
Repayments of FHLB borrowings		(10,000,000)
Principal repayments of note payable	(51,000)	(50,000)
Decrease in advances from borrowers for taxes and insurance	(1,628,000)	(1,044,000)
Net cash provided by financing activities	5,543,000	22,585,000
Net increase in cash and cash equivalents	49,638,000	12,752,000
Cash and cash equivalents at beginning of period	34,636,000	39,404,000
Cash and cash equivalents at end of period	84,274,000	52,156,000
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	1,836,000	4,781,000
Cash paid for income taxes, net	47,000	3,000
Non-cash transactions:
(Decrease) increase in premises and equipment	(130,000)	133,000
Reclass of premises and equipment to implementation cost	52,000
Decrease (increase) in accrued expense and other liabilities	78,000	(133,000)
Operating lease right-of-use assets		(57,000)
Operating lease liabilities		57,000
Capitalized servicing assets	17,000	2,000
Interest Rate Swap [Member]
Non-cash transactions:
Increase in interest rate swaps assets	396,000	601,000
Increase in interest rate swaps liabilities	(396,000)	(601,000)
SBA Loans [Member]
Non-cash transactions:
Transfers of SBA loans held for sale to loans receivable	$ 281,000	$ 280,000

XML

Note 1 - Basis of Financial Statement Presentation

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Basis of Accounting [Text Block]

Note 1. Basis of Financial Statement Presentation

The accompanying unaudited interim condensed consolidated financial statements of Patriot National Bancorp, Inc. (the “Company”) and its wholly-owned subsidiaries Patriot Bank, N.A. (the “Bank”), Patriot National Statutory Trust I and PinPat Acquisition Corporation (collectively, “Patriot”), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included on the Annual Report on Form

10

-K for the year ended

December 31, 2020.

The consolidated balance sheet at

December 31, 2020

presented herein has been derived from the audited consolidated financial statements of the Company at that date, but does

not

include all of the information and footnotes required by US GAAP for complete financial statements.

The preparation of consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates. Management has identified accounting for the allowance for loan and lease losses, the analysis and valuation of its investment securities, the valuation of deferred tax assets, the impairment of goodwill, the valuation of derivatives, and the valuation of servicing assets as certain of the Company's more significant accounting policies and estimates, in that they are critical to the presentation of the Company's consolidated financial condition and results of operations. As they concern matters that are inherently uncertain, these estimates require management to make subjective and complex judgments in the preparation of the Company's consolidated financial statements.

Reclassifications:

Certain amounts appearing in the financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassifications had

no

effect on net income or stockholders' equity as previously reported.

The information furnished reflects, in the opinion of management, all normal recurring adjustments necessary for a fair presentation of the results for the interim periods presented. The results of operations for the

three

months ended

March 31, 2021

are

not

necessarily indicative of the results of operations that

may

be expected for the remainder of

2021.

COVID-

19

Impact

In

March 2020,

the World Health Organization declared novel coronavirus disease

2019

("COVID-

19"

) as a global pandemic. The COVID-

19

pandemic has negatively impacted the global and U.S. economies. Many businesses in the U.S., including those in the markets we serve, were required to close, causing a significant increase in unemployment and loss of revenue.

The consolidated financial statements reflect estimates and assumptions that affect the reported amounts of assets and liabilities, including the amount of the allowance for loan losses. The assumptions and estimates used in the financial statements were impacted by the COVID-

19

pandemic.

We are unable to estimate the full impact of COVID-

19

on our business and operations at this time. The extent of such impact will depend on future developments, which are highly uncertain, including when COVID-

19

can be controlled and abated and when and how the economy

may

be reopened. The pandemic could cause us to experience higher credit losses in our loan portfolio, impairment of our goodwill, additional valuation allowance associated with our net deferred tax assets, reduced demand for our products and services, or other negative impacts on our financial position, results of operations, and prospects.

On

March 27, 2020,

the President of the United States signed into law the Coronavirus Aid, Relief and Economic Security (“CARES”) Act in response to the coronavirus pandemic. This legislation aims at providing relief for individuals and businesses that have been negatively impacted by the coronavirus pandemic.

On

August 3, 2020,

the Federal Financial Institutions Council issued a joint statement, encouraging financial institutions to consider prudent accommodation options to mitigate losses for the borrower and financial institution beyond the initial accommodation period. The joint statement specifically encourages financial institutions to provide consumers with available options for repaying missed payments at the end of their accommodation to avoid delinquencies, as well as options for changes to terms to support sustainable and affordable payments for the long term. These considerations should also include prudent risk management practices at the financial institution based on the credit risk of the borrower. Patriot is actively working with its customers to address any further accommodation needs while carefully evaluating the associated credit risk of the borrowers.

The Federal Reserve System (the “Fed”) has taken, and continues to take, steps to support markets and the economy. Stimulus from Washington and the federal government, in spite of political hurdles and a change in presidential administrations, has also provided meaningful support. The new Biden administration has adopted another

$1.9

trillion stimulus package in

March 2021.

The market expects the Fed Funds rate to remain at the effective lower bound near

zero

for an extended period of time. Henceforth, the Fed appears to be willing to let inflation run above the

2%

target level, even when unemployment is very low, before removing accommodation.

XML

Note 2 - Accounting Policies

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

Note 2. Accounting Policies

Please refer to the summary of Significant Accounting Policies included in the Company's

2020

Annual Report on Form

10

-K for a list of all policies in effect as of

December 31, 2020.

The below summary is intended to provide updates or new policies required as a result of a new accounting standard or a change to the Company's operations or assets that require a new or amended policy.

Employee Retention Credit

The CARES Act also provided for an employee retention credit (“Employee Retention Credit”), which is a refundable tax credit against certain employment taxes of up to

$5,000

per employee for eligible employers. The tax credit is equal to

70%

of qualified wages paid to employees during a quarter, capped at

$10,000

of qualified wages per employee throughout the year. The Company adopted a policy to recognize the employee retention credit when earned and to recognize the credit as a reduction to compensation and benefits expense on the Company's consolidated statements of operations. Accordingly, the Company recorded an employee retention credit of

$843,000

in the

first

quarter of

2021.

The Company is currently in the process of filing for this credit.

Recently Adopted and Issued Accounting Standards

Accounting Standards Adopted During

2021

Effective

January 1, 2021,

the following new Accounting Standards Updates (ASU) were adopted by the Company:

ASU

2019

-

12

ASU

2019

-

12,

“

Income Taxes (Topic

740

) - Simplifying the Accounting for Income Taxes.

” The guidance issued in this update simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC

740

related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences. ASU

2019

-

12

also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The ASU is effective for the Company on

January 1, 2021.

The adoption of ASU

2019

-

12

did

not

have any impact on our consolidated financial statements.

Accounting Standards Issued But

Not

Yet Adopted

ASU

2016

-

13

In

June 2016,

the FASB issued ASU

2016

-

13,

Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments

. The ASU changes the methodology for measuring credit losses on financial instruments measured at amortized cost to a current expected loss (“CECL”) model. Under the CECL model, entities will estimate credit losses over the entire contractual term of a financial instrument from the date of initial recognition of the instrument. The ASU also changes the existing impairment model for available-for-sale debt securities. In cases where there is neither the intent nor a more-likely-than-

not

requirement to sell the debt security, an entity will record credit losses as an allowance rather than a direct write-down of the amortized cost basis. Additionally, ASU

2016

-

13

notes that credit losses related to available-for-sale debt securities and purchased credit impaired loans should be recorded through an allowance for credit losses. ASU

2016

-

13

is effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after

December 15, 2018.

In

November 2019,

the FASB issued ASU

2019

-

10,

which amends the effective date of ASC

326

for smaller reporting companies, as defined by the SEC, and other non-SEC reporting entities, and delays the effective date to fiscal years beginning after

December 31, 2022,

including interim periods within those fiscal periods. As the Company is a small reporting company, the delay will be applicable to the Company. Management is currently evaluating the impact that the standard will have on its consolidated financial statements.

ASU Update

2020

-

02

In

January 2020,

the FASB issued ASU

No.

2020

-

02,

“

Financial Instruments - Credit Losses (Topic

326

) and Leases (Topic

842

): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin

No.

119

and Update to SEC Section on Effective Date Related to Accounting Standards Update

No.

2016

-

02,

Leases (Topic

842

).

” This ASU adds and amends SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin

No.

119,

related to the new credit losses standard, and comments by the SEC staff related to the revised effective date of the new leases standard. This ASU is effective upon issuance. See the discussion regarding the adoption of ASU

2016

-

13

above.

ASU Update

2020

-

03

In

March 2020,

the FASB issued ASU

No.

2020

-

3,

“

Codification Improvements to Financial Instruments.

” This ASU clarifies various financial instruments topics, including the CECL standard issued in

2016.

Amendments related to ASU

2016

-

13

for entities that have

not

yet adopted that guidance are effective upon adoption of the amendments in ASU

2016

-

13.

Early adoption is

not

permitted before an entity's adoption of ASU

2016

-

13.

Other amendments are effective upon issuance of this ASU. See the discussion regarding the adoption of ASU

2016

-

13

above.

ASU Update

2020

-

04

In

March 2020,

the FASB issued ASU

No.

2020

-

4,

"Reference Rate Reform". This ASU provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this update are effective for all entities as of

March 12, 2020

through

December 31, 2022.

As of

December 31, 2020,

the Company has

not

made any elections under ASU

2020

-

04

but continues to evaluate the impact of reference rate reform and which optional expedients and exceptions might be elected.

XML

Note 3 - Available-for-sale Securities

3 Months Ended

Mar. 31, 2021

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

March 31, 2021

and

December 31, 2020

are as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2021:
U. S. Government agency mortgage-backed securities	$	22,867	$	109	$	(289	)	$	22,687
Corporate bonds		18,013		272		(952	)		17,333
Subordinated notes		9,040		115		(6	)		9,149
SBA loan pools		8,336		-		(171	)		8,165
Municipal bonds		564		-		(5	)		559
	$	58,820	$	496	$	(1,423	)	$	57,893
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	16,719	$	131	$	(17	)	$	16,833
Corporate bonds		18,014		260		(984	)		17,290
Subordinated notes		9,036		97		(128	)		9,005
SBA loan pools		5,627		-		(60	)		5,567
Municipal bonds		564		3		-			567
	$	49,960	$	491	$	(1,189	)	$	49,262

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

March 31, 2021

and

December 31, 2020:

(In thousands)	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
March 31, 2021:
U. S. Government agency mortgage-backed securities	$	14,055	$	(288	)	$	77	$	(1	)	$	14,132	$	(289	)
Corporate bonds		-		-			13,047		(952	)		13,047		(952	)
Subordinated notes		999		(1	)		1,104		(5	)		2,103		(6	)
SBA loan pools		4,458		(127	)		3,707		(44	)		8,165		(171	)
Municipal bonds		403		(5	)		-		-			403		(5	)
	$	19,915	$	(421	)	$	17,935	$	(1,002	)	$	37,850	$	(1,423	)
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	5,797	$	(14	)	$	1,476	$	(3	)	$	7,273	$	(17	)
Corporate bonds		-		-			13,015		(984	)		13,015		(984	)
Subordinated notes		1,878		(122	)		1,103		(6	)		2,981		(128	)
SBA loan pools		1,533		(12	)		4,034		(48	)		5,567		(60	)
	$	9,208	$	(148	)	$	19,628	$	(1,041	)	$	28,836	$	(1,189	)

At

March 31, 2021

and

December 31, 2020,

26

of

41

and

22

of

37

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

3.6%

and

4.0%

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 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, 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

March 31, 2021.

As of

March 31, 2021

and

December 31, 2020,

available-for-sale securities of

$5.6

million and

$6.1

million were pledged primarily to secure municipal deposits, respectively. The securities were pledged to the Federal Reserve Bank (“FRB”).

The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of

March 31, 2021

and

December 31, 2020.

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
March 31, 2021:
Corporate bonds	$	4,013	$	14,000	$	-	$	18,013	$	4,285	$	13,048	$	-	$	17,333
Subordinated notes		2,000		7,040		-		9,040		2,003		7,146		-		9,149
SBA loan pools		1,735		3,468		3,133		8,336		1,715		3,427		3,023		8,165
Municipal bonds		-		564		-		564		-		559		-		559
Available-for-sale securities with stated maturity dates		7,748		25,072		3,133		35,953		8,003		24,180		3,023		35,206
U. S. Government agency mortgage-backed securities		1,035		1,343		20,489		22,867		1,036		1,367		20,284		22,687
	$	8,783	$	26,415	$	23,622	$	58,820	$	9,039	$	25,547	$	23,307	$	57,893
December 31, 2020:
Corporate bonds	$	4,014	$	14,000	$	-	$	18,014	$	4,274	$	13,016	$	-	$	17,290
Subordinated notes		2,000		7,036		-		9,036		2,003		7,002		-		9,005
SBA loan pools		1,921		3,706		-		5,627		1,899		3,668		-		5,567
Municipal bonds		-		564		-		564		-		567		-		567
Available-for-sale securities with stated maturity dates		7,935		25,306		-		33,241		8,176		24,253		-		32,429
U. S. Government agency mortgage-backed securities		3,364		1,466		11,889		16,719		3,363		1,491		11,979		16,833
	$	11,299	$	26,772	$	11,889	$	49,960	$	11,539	$	25,744	$	11,979	$	49,262

During the

three

months ended

March 31, 2021,

the Bank purchased

$10.9

million U.S. Government agency mortgage-backed securities and

$3.0

million SBA government guaranteed loan pools securities. During the

three

months ended

March 31, 2020,

the Bank did

not

purchase any available-for-sale securities. There was

no

sale of available-for-sale securities in the

three

months ended

March 31, 2021

and

2020.

XML

Note 4 - Loan Receivables and Allowance for Loan and Lease Losses

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4. Loans Receivable and Allowance for Loan and Lease Losses

As of

March 31, 2021

and

December 31, 2020,

loans receivable, net, consisted of the following:

	March 31,			December 31,
(In thousands)	2021			2020
Loan portfolio segment:
Commercial Real Estate	$	261,461		$	282,378
Residential Real Estate		147,947			153,851
Commercial and Industrial		138,966			144,297
Consumer and Other		56,485			67,635
Construction		55,523			66,984
Construction to Permanent - CRE		16,294			15,035
Loans receivable, gross		676,676			730,180
Allowance for loan and lease losses		(10,426	)		(10,584	)
Loans receivable, net	$	666,250		$	719,596

Patriot's lending activities are conducted principally in Fairfield and New Haven Counties in Connecticut and Westchester County in New York, and the

five

Boroughs of New York City. Patriot originates commercial real estate loans, commercial business loans, a variety of consumer loans, and construction loans, and has purchased residential loans since

2016.

All commercial and residential real estate loans are collateralized primarily by

first

or

second

mortgages on real estate. The ability and willingness of borrowers to satisfy their loan obligations is dependent to some degree on the status of the regional economy as well as upon the regional real estate market. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio and the recovery of a substantial portion of any resulting real estate acquired is susceptible to changes in market conditions.

Patriot has established credit policies applicable to each type of lending activity in which it engages and evaluates the creditworthiness of each borrower. Unless extenuating circumstances exist, Patriot limits the extension of credit on commercial real estate loans to

75%

of the market value of the underlying collateral. Patriot's loan origination policy for multi-family residential real estate is limited to

80%

of the market value of the underlying collateral. In the case of construction loans, the maximum loan-to-value is

75%

of the “as completed” appraised value of the real estate project. Management monitors the appraised value of collateral on an on-going basis and additional collateral is requested when warranted. Real estate is the primary form of collateral, although other forms of collateral do exist and

may

include such assets as accounts receivable, inventory, marketable securities, time deposits, and other business assets.

Risk characteristics of the Company

'

s portfolio classes include the following:

Commercial Real Estate Loans

In underwriting commercial real estate loans, Patriot evaluates both the prospective borrower's ability to make timely payments on the loan and the value of the property securing the loans. Repayment of such loans

may

be negatively impacted should the borrower default, the value of the property collateralizing the loan substantially decline, or there are declines in general economic conditions. Where the owner occupies the property, Patriot also evaluates the business' ability to repay the loan on a timely basis and

may

require personal guarantees, lease assignments, and/or the guarantee of the operating company.

Residential Real Estate Loans

In

2013,

Patriot discontinued offering primary mortgages on personal residences. Repayment of residential real estate loans

may

be negatively impacted should the borrower have financial difficulties, should there be a significant decline in the value of the property securing the loan, or should there be declines in general economic conditions.

During the

three

months ended

March 31, 2021

and

2020,

Patriot purchased

$16.0

million and

$4.1

million of residential real estate loans, respectively.

Commercial and Industrial Loans

Patriot's commercial and industrial loan portfolio consists primarily of commercial business loans and lines of credit to businesses and professionals. These loans are generally for the financing of accounts receivable, purchases of inventory, purchases of new or used equipment, or for other short- or long-term working capital purposes. These loans are generally secured by business assets but are also occasionally offered on an unsecured basis. In granting these types of loans, Patriot considers the borrower's cash flow as the primary source of repayment, supported by the value of collateral, if any, and personal guarantees, as applicable. Repayment of commercial and industrial loans

may

be negatively impacted by adverse changes in economic conditions, ineffective management, claims on the borrower's assets by others that are superior to Patriot's claims, a loss of demand for the borrower's products or services, or the death or disability of the borrower or other key management personnel.

Patriot's syndicated and leveraged loan portfolio, which totaled

$44.8

million and

$55.0

million at

March 31, 2021

and

December 31, 2020,

respectively, are included in the commercial and industrial loan classification and are primarily comprised of loan transactions led by major financial institutions and regional banks, which are the Agent Bank or Lead Arranger, and are referred to as syndicated loans or "Shared National Credits (SNC)". SNC loans were determined to be complementary to the Bank's existing commercial and industrial loan portfolio and product offerings and provide diversification from Patriot's typical direct-to-business lines of credit and term facilities. The Bank will participate in senior secured financings for public and privately-owned companies for acquisitions, working capital, recapitalizations, and general corporate purposes. The Bank's strategy is to participate in these types of loan transaction in accordance with its internal policies.

Consumer and Other Loans

Patriot offers individual consumers various forms of credit including installment loans, credit cards, overdraft protection, auto loans and reserve lines of credit. Repayments of such loans are generally dependent on the personal income of the borrower, which

may

be negatively impacted by adverse changes in economic conditions. The Company does

not

place a high emphasis on originating these types of loans.

The Company does

not

have any lending programs commonly referred to as subprime lending. Subprime lending generally targets borrowers with weakened credit histories that are typically characterized by payment delinquencies, previous charge-offs, judgments against the consumer, a history of bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burdened ratios.

In the

first

quarter of

2021,

Patriot did

not

purchase any education loans. Education loans of

$14.9

million were purchased during the

three

months ended

March 31, 2020.

Construction Loans

Construction loans are of a short-term nature, generally of

eighteen

months or less, that are secured by land and improvements intended for commercial, residential, or mixed-use development. Loan proceeds

may

be used for the acquisition of or improvements to the land under development and funds are generally disbursed as phases of construction are completed.

Included in this category are loans to construct single family homes where

no

contract of sale exists, based upon the experience and financial strength of the builder, the type and location of the property, and other factors. Construction loans tend to be personally guaranteed by the principal(s). Repayment of such loans

may

be negatively impacted by an inability to complete construction, a downturn in the market for new construction, by a significant increase in interest rates, or by decline in general economic conditions.

Construction to Permanent - Commercial Real Estate (

“

CRE

”

)

Loans in this category represent a

one

-time close of a construction facility with simultaneous conversion to an amortizing mortgage loan. Construction to Permanent loans combine a short term period similar to a  construction loan, generally with a variable rate, and a longer term CRE loan typically

20

-

25

years, resetting every

five

years to the Federal Home Loan Bank (“FHLB”) rate.

Close of the construction facility typically occurs when events dictate, such as receipt of a certificate of occupancy and property stabilization, which is defined as cash flow sufficient to support a pre-defined minimum debt coverage ratio and other conditions and covenants particular to the loan. Construction facilities are typically variable rate instruments that, upon conversion to an amortizing mortgage loan, reset to a fixed rate instrument that is the greater of the in-force variable rate plus a predetermined spread over a reference rate (e.g., prime) or a minimum interest rate.

SBA Loans

Patriot originates SBA

7

(a) loans, on which the SBA has historically provided guarantees of

75%

of the principal balance. The guaranteed portion of the Company's SBA loans is generally sold in the secondary market with the unguaranteed portion held in the portfolio as a loan held for investment. SBA loans are for the purpose of providing working capital, financing the purchase of equipment, inventory, or commercial real estate and for other business purposes. Loans are guaranteed by the businesses' major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. SBA loans held for investment are included in the commercial real estate loans and commercial and industrial loan classifications, which totaled

$22.1

million and

$21.6

million as of

March 31, 2021

and

December 31, 2020,

respectively. During the

three

-month period ended

March 31, 2021,

$281,000

SBA loans previously classified as held for sale were transferred to held for investment.

Small Business Administration Paycheck Protection Program

The CARES Act created the SBA's Paycheck Protection Program. Under the Paycheck Protection Program,

$669

billion was authorized for small business loans to pay payroll and group health costs, salaries and commissions, mortgage and rent payments, utilities, and interest on other debt. The loans are provided through participating financial institutions that process loan applications and service the loans. The Bank started participating in the SBA's Paycheck Protection Program in

January 2021.

Paycheck Protection Program loans are included in the commercial real estate loans and commercial and industrial loan classifications, and totaled

$2.7

million as of

March 31, 2021.

Allowance for Loan and Lease Losses

The following tables summarize the activity in the allowance for loan and lease losses, allocated to segments of the loan portfolio, for the

three

months ended

March 31, 2021

and

2020:

(In thousands)	Commercial Real Estate			Residential Real Estate			Commercial and Industrial			Consumer and Other			Construction			Construction to Permanent - CRE			Unallocated			Total
Three months ended  March 31, 2021
Allowance for loan and lease losses:
December 31, 2020	$	4,485		$	1,379		$	3,284		$	295		$	739		$	162		$	240		$	10,584
Charge-offs		(42	)		(3	)		(209	)		(18	)		-			-			-			(272	)
Recoveries		-			-			12			102			-			-			-			114
Provisions (credits)		(289	)		533			537			3			(459	)		(85	)		(240	)		-
March 31, 2021	$	4,154		$	1,909		$	3,624		$	382		$	280		$	77		$	-		$	10,426
Three months ended  March 31, 2020
Allowance for loan and lease losses:
December 31, 2019	$	3,789		$	1,038		$	4,340		$	341		$	477		$	130		$	-		$	10,115
Charge-offs		-			(1	)		(4	)		(39	)		-			-			-			(44	)
Recoveries		-			-			40			1			-			-			-			41
Provisions (credits)		361			83			14			231			126			(11	)		-			804
March 31, 2020	$	4,150		$	1,120		$	4,390		$	534		$	603		$	119		$	-		$	10,916

The following tables summarize, by loan portfolio segment, the amount of loans receivable evaluated individually and collectively for impairment as of

March 31, 2021:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
March 31, 2021
Allowance for loan and lease losses:
Individually evaluated for impairment	$	1,414	$	4	$	501	$	-	$	-	$	-	$	-	$	1,919
Collectively evaluated for impairment		2,740		1,905		3,123		382		280		77		-		8,507
Total allowance for loan and lease losses	$	4,154	$	1,909	$	3,624	$	382	$	280	$	77	$	-	$	10,426
Loans receivable, gross:
Individually evaluated for impairment	$	17,025	$	4,247	$	6,532	$	653	$	-	$	-	$	-	$	28,457
Collectively evaluated for impairment		244,436		143,700		132,434		55,832		55,523		16,294		-		648,219
Total loans receivable, gross	$	261,461	$	147,947	$	138,966	$	56,485	$	55,523	$	16,294	$	-	$	676,676

The following tables summarize, by loan portfolio segment, the amount of loans receivable evaluated individually and collectively for impairment as of

December 31, 2020:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
December 31, 2020
Allowance for loan and lease losses:
Individually evaluated for impairment	$	1,398	$	4	$	-	$	10	$	-	$	-	$	-	$	1,412
Collectively evaluated for impairment		3,087		1,375		3,284		285		739		162		240		9,172
Total allowance for loan losses	$	4,485	$	1,379	$	3,284	$	295	$	739	$	162	$	240	$	10,584
Loans receivable, gross:
Individually evaluated for impairment	$	14,534	$	3,962	$	4,700	$	1,187	$	-	$	-	$	-	$	24,383
Collectively evaluated for impairment		267,844		149,889		139,597		66,448		66,984		15,035		-		705,797
Total loans receivable, gross	$	282,378	$	153,851	$	144,297	$	67,635	$	66,984	$	15,035	$	-	$	730,180

Patriot monitors the credit quality of its loans receivable on an ongoing basis. Credit quality is monitored by reviewing certain indicators, including cash flow from business operations, loan to value ratios, debt service coverage ratios, and credit scores.

Patriot employs a risk rating system as part of the risk assessment of its loan portfolio. At origination, lending officers are required to assign a risk rating to each loan in their portfolio, which is ratified or modified by the Loan Committee to which the loan is submitted for approval. If financial developments occur on a loan in the lending officer's portfolio of responsibility, the risk rating is reviewed and adjusted, as applicable. In carrying out its oversight responsibilities, the Loan Committee can adjust a risk rating based on available information. In addition, the risk ratings on all commercial loans over

$250,000

are reviewed annually by the Credit Department.

Additionally, Patriot retains an independent

third

-party loan review expert to perform a semi-annual analysis of the results of its risk rating process. The review is based on a randomly selected sample of loans within established parameters (e.g., value, concentration), in order to assess and validate the risk ratings assigned to individual loans. Any changes to the assigned risk ratings, based on the quarterly review, are required to be approved by the Loan Committee.

When assigning a risk rating to a loan, management utilizes the Bank's internal

eleven

-point risk rating system. An asset is considered “special mention” when it has a potential weakness based on objective evidence, but does

not

currently expose the Company to sufficient risk to warrant classification in

one

of the following categories:

● Substandard: An asset is classified “substandard” if it is not adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Substandard assets have well defined weaknesses based on objective evidence, and are characterized by the distinct possibility that the Company will sustain some loss, if noted deficiencies are not corrected.

● Doubtful: Assets classified as “doubtful” have all of the weaknesses inherent in those classified as “substandard”, with the added characteristic that the identified weaknesses make collection or liquidation-in-full improbable, on the basis of currently existing facts, conditions, and values.

Charge-offs of loans to reduce the loan to its recoverable value that are solely collateral dependent, generally occur immediately upon confirmation of the partial loss amount. Loans that are cash flow dependent are modeled to reflect the expected cash flows through expected loan maturity, including any proceeds from refinancing or principal curtailment. A specific reserve is established for the amount by which the net investment in the loan exceeds the present value of discounted cash flows. Charge-offs on cash flow dependent loans also generally occur immediately upon confirmation of the partial loss amount.

If either type of loan is classified as “Loss”, meaning full loss on the loan is expected, the full balance of the loan receivable is charged off, regardless of the potential recovery from a sale of the underlying collateral. Any amount that

may

be recovered on the sale of collateral underlying a loan is recognized as a “recovery” in the period in which the collateral is sold. In accordance with Federal Financial Institutions Examination Council published policies establishing uniform criteria for the classification of retail credit based on delinquency status, “Open-end” and “Closed-end” credits are charged off when

180

days and

120

days delinquent, respectively.

Due to the economic disruption and uncertainty caused by the pandemic, the allowance for loan losses

may

increase in future periods as borrowers are affected by the expected severe contraction of economic activity and the dramatic increase in unemployment. This

may

result in increases in loan delinquencies, down-grades of loan credit ratings and charge-offs in future periods. The allowance for loan losses

may

increase to reflect the decline in the performance of the loan portfolio and the higher level of incurred losses.

Allowance for loan losses methodology

In

2021,

the Company refined its methodology in determining the qualitative factors within the allowance for loan losses. Qualitative adjustments are aggregated into

nine

categories described in the Interagency Policy Statement (“Interagency Statement”) issued by the bank regulators. Within the statement, the following qualitative factors are considered:

● Changes in lending policies and procedures, including underwriting standards, collection, charge-off, and recovery practices

not

considered elsewhere in estimating credit losses;

● Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan portfolio, including the condition of various market segments;

● Changes in the nature and volume of the loan portfolio and terms of loans;

● Changes in the experience, ability and depth of lending management and staff;

● Changes in the volume and loss severity of past due loans, the volume of non-accrual loans, and the volume and loss severity of adversely classified or graded loans;

● Changes in the quality of the loan review system;

● Changes in the value of the underlying collateral for collateral-dependent loans;

● The existence and effect of any concentrations of credit and changes in the level of such concentrations;

● The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in our current loan portfolio;

The additional risk factor for special mention loans and substandard loans and the risk factor related to COVID-

19

pandemic, were eliminated. The separate adjustment for Special Mention and Substandard loans within each pool is now incorporated into the factor for “Changes in the volume and loss severity of past due loans, the volume of non-accrual, and the volume and loss severity of adversely classified or graded loans”, which now includes adjustments for the percentage of Special Mention and Substandard loans in each portfolio segment. The COVID-

19

factor was eliminated since, after more than a year into the pandemic, we consider that the impact on both the economy and our portfolio is now manifest in economic data (GDP, unemployment, retail sales, manufacturing output, etc.) and in our portfolio, as reflected by the volume of Special Mention and Substandard loans that have resulted from deterioration in borrower performance as a direct result of the pandemic.

The refining in methodology resulted in better alignment of the credit characteristics of the various risk grades and loan types with the calculated allowance, and did

not

have any impact on the provision in the

first

quarter of

2021.

Loan Portfolio Aging Analysis

The following tables summarize performing and non-performing (i.e., non-accruing) loans receivable by portfolio segment, by aging category, by delinquency status as of

March 31, 2021.

(In thousands)	Performing (Accruing) Loans
As of March 31, 2021:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non-accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	517	$	750	$	-	$	1,267	$	210,720	$	211,987	$	-	$	211,987
Special mention		-		-		-		-		25,072		25,072		-		25,072
Substandard		351		-		-		351		7,017		7,368		17,034		24,402
		868		750		-		1,618		242,809		244,427		17,034		261,461
Residential Real Estate:
Pass	$	592	$	-	$	-		592	$	139,059		139,651		-		139,651
Special mention		-		-		-		-		3,832		3,832		-		3,832
Substandard		-		-		-		-		-		-		4,464		4,464
		592		-		-		592		142,891		143,483		4,464		147,947
Commercial and Industrial:
Pass	$	16	$	3,000	$	-		3,016	$	94,467		97,483		-		97,483
Special mention		123		-		-		123		8,226		8,349		-		8,349
Substandard		2,077		-		-		2,077		28,525		30,602		2,532		33,134
		2,216		3,000		-		5,216		131,218		136,434		2,532		138,966
Consumer and Other:
Pass	$	2	$	5	$	-		7	$	55,801		55,808		-		55,808
Substandard		-		-		-		-		120		120		557		677
		2		5		-		7		55,921		55,928		557		56,485
Construction:
Pass	$	866	$	-	$	-		866	$	54,657		55,523		-		55,523
		866		-		-		866		54,657		55,523		-		55,523
Construction to Permanent - CRE:
Pass	$	-	$	724	$	-		724	$	15,570		16,294		-		16,294
		-		724		-		724		15,570		16,294		-		16,294
Total	$	4,544	$	4,479	$	-	$	9,023	$	643,066	$	652,089	$	24,587	$	676,676
Loans receivable, gross:
Pass	$	1,993	$	4,479	$	-	$	6,472	$	570,274	$	576,746	$	-	$	576,746
Special mention		123		-		-		123		37,130		37,253		-		37,253
Substandard		2,428		-		-		2,428		35,662		38,090		24,587		62,677
Loans receivable, gross	$	4,544	$	4,479	$	-	$	9,023	$	643,066	$	652,089	$	24,587	$	676,676

The following tables summarize performing and non-performing loans (i.e., non-accruing) receivable by portfolio segment, by aging category, by delinquency status as of

December 31, 2020.

(In thousands)	Performing (Accruing) Loans
As of December 31, 2020:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non-accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	-	$	-	$	-	$	-	$	230,824	$	230,824	$	-	$	230,824
Special mention		-		-		-		-		25,658		25,658		-		25,658
Substandard		354		-		9		363		10,999		11,362		14,534		25,896
		354		-		9		363		267,481		267,844		14,534		282,378
Residential Real Estate:
Pass		478		361		-		839		145,298		146,137		-		146,137
Special mention		-		-		-		-		3,860		3,860		-		3,860
Substandard		-		-		-		-		-		-		3,854		3,854
		478		361		-		839		149,158		149,997		3,854		153,851
Commercial and Industrial:
Pass		-		209		-		209		102,131		102,340		-		102,340
Special mention		-		4,000		-		4,000		8,881		12,881		-		12,881
Substandard		603		113		-		716		27,660		28,376		700		29,076
		603		4,322		-		4,925		138,672		143,597		700		144,297
Consumer and Other:
Pass		1		-		7		8		66,589		66,597		-		66,597
Substandard		-		-		-		-		121		121		917		1,038
		1		-		7		8		66,710		66,718		917		67,635
Construction:
Pass		-		2,351		-		2,351		64,633		66,984		-		66,984
		-		2,351		-		2,351		64,633		66,984		-		66,984
Construction to Permanent - CRE:
Pass		-		-		-		-		15,035		15,035		-		15,035
		-		-		-		-		15,035		15,035		-		15,035
Total	$	1,436	$	7,034	$	16	$	8,486	$	701,689	$	710,175	$	20,005	$	730,180
Loans receivable, gross:
Pass	$	479	$	2,921	$	7	$	3,407	$	624,510	$	627,917	$	-	$	627,917
Special mention		-		4,000		-		4,000		38,399		42,399		-		42,399
Substandard		957		113		9		1,079		38,780		39,859		20,005		59,864
Loans receivable, gross	$	1,436	$	7,034	$	16	$	8,486	$	701,689	$	710,175	$	20,005	$	730,180

The following tables summarize non-performing (i.e., non-accruing) loans by aging category and status, within the applicable loan portfolio segment as of

March 31, 2021

and

December 31, 2020:

(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of March 31, 2021:
Loan portfolio segment:
Commercial Real Estate:
Substandard	$	-	$	-	$	4,658	$	4,658	$	12,376	$	17,034
Residential Real Estate:
Substandard		-		23		2,122		2,145		2,319		4,464
Commercial and Industrial:
Substandard		1,786		63		683		2,532		-		2,532
Consumer and Other:
Substandard		-		-		30		30		527		557
Total non-accruing loans	$	1,786	$	86	$	7,493	$	9,365	$	15,222	$	24,587
As of December 31, 2020:
Loan portfolio segment:
Commercial Real Estate:
Substandard	$	-	$	-	$	5,723	$	5,723	$	8,811	$	14,534
Residential Real Estate:
Substandard		-		-		2,884		2,884		970		3,854
Commercial and Industrial:
Substandard		-		-		700		700		-		700
Consumer and Other:
Substandard		22		-		91		113		804		917
Total non-accruing loans	$	22	$	-	$	9,398	$	9,420	$	10,585	$	20,005

If non-accrual loans had been performing in accordance with the original contractual terms, additional interest income (net of cash collected) of approximately

$255,000

and

$191,000

would have been recognized during the

three

months ended

March 31, 2021

and

2020,

respectively.

Interest income collected and recognized on non-accruing loans for the

three

months ended

March 31, 2021

and

2020

was

$48,000

and

$28,000,

respectively.

The accrual of interest on loans is discontinued at the time the loan is

90

days past due for payment unless the loan is well-secured and in process of collection. Consumer installment loans are typically charged off

no

later than

180

days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual status or charged-off, at an earlier date, if collection of principal or interest is considered doubtful.

All interest accrued, but

not

collected for loans that are placed on non-accrual status or charged off, is reversed against interest income. The interest on these loans is accounted for on the cash-basis method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, future payments are reasonably assured, after at least

six

months of timely payment history. Management considers all non-accrual loans and Trouble Debt Restructurings (“TDR”) for impaired loans. In most cases, loan payments that are past due less than

90

days, well-secured, and in the process of collection are

not

considered impaired. The Bank considers loans under

$100,000

and consumer installment loans to be pools of smaller homogeneous loan balances, and therefore are collectively evaluated for impairment, and

not

individually measured for impairment.

Troubled Debt Restructurings (

“

TDR

”

)

On a case-by-case basis, Patriot

may

agree to modify the contractual terms of a borrower's loan to assist customers who

may

be experiencing financial difficulty. If the borrower is experiencing financial difficulties and a concession has been made, the loan is classified as a TDR.

Substantially all TDR loan modifications involve lowering the monthly payments on such loans through either a reduction in interest rate below market rate, an extension of the term of the loan, or a combination of adjusting these

two

contractual attributes. TDR loan modifications

may

also result in the forgiveness of principal or accrued interest. In addition, when modifying commercial loans, Patriot frequently obtains additional collateral or guarantor support. If the borrower has performed under the existing contractual terms of the loan and Patriot's underwriters determine that the borrower has the capacity to continue to perform under the terms of the TDR, the loan continues accruing interest. Non-accruing TDRs

may

be returned to accrual status when there has been a sustained period of performance (generally

six

consecutive months of payments) and both principal and interest are reasonably assured of collection.

The following table summarizes the recorded investment in TDRs as of

March 31, 2021

and

December 31, 2020:

(In thousands)	March 31, 2021					December 31, 2020
	Number of Loans		Recorded Investment			Number of Loans		Recorded Investment
Loan portfolio segment:
Commercial Real Estate		1	$	8,811			2	$	9,884
Residential Real Estate		3		912			3		928
Commercial and Industrial		1		4,000			1		4,000
Consumer and Other		4		774			5		1,074
Total TDR Loans		9		14,497			11		15,886
Less:
TDRs included in non-accrual loans		4		(10,120	)		6		(11,508	)
Total accrual TDR Loans		5	$	4,377			5	$	4,378

During the

three

months ended

March 31, 2021

and

2020,

no

loans were modified as TDR.

The loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, extending the interest-only payment period, or substituting or adding a co-borrower or guarantor. There were

no

defaults of TDRs during the

three

months ended

March 31, 2021

and

2020.

At

March 31, 2021

and

December 31, 2020,

there were

no

commitments to advance additional funds under TDRs.

The balances reflected here as TDR's are also included in the non-accruing loan balance included in the prior table - Loan Portfolio Aging Analysis.

Pursuant to the CARES Act, loan modifications made between

March 1, 2020

and the earlier of i)

December 30, 2021

or ii)

60

days after the President declares a termination of the COVID-

19

national emergency are

not

classified as TDRs if the related loans were

not

more than

30

days past due as of

December 31, 2021.

In addition, on

April 7, 2020,

a group of banking regulatory agencies issued a revised interagency statement that offers practical expedients for evaluating whether COVID-

19

loan modifications are TDRs. The Bank had modified

$232.7

million of loans to borrowers to defer the payment of interest and/or principal for up to

180

days, and approximately

$37.7

million of loans remained on deferment as of

March 31, 2021.

According to regulatory guidance and CARES Act, these modified loans were

not

TDRs as of

March 31, 2021.

Impaired Loans

The following table reflects information about the impaired loans by class as of

March 31, 2021

and

December 31, 2020:

(In thousands)	March 31, 2021						December 31, 2020
	Recorded Investment		Principal Outstanding		Related Allowance		Recorded Investment		Principal Outstanding		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	8,214	$	9,135	$	-	$	5,723	$	6,644	$	-
Residential Real Estate		4,138		4,212		-		3,853		3,900		-
Commercial and Industrial		4,684		4,803		-		4,700		4,816		-
Consumer and Other		653		678		-		1,177		1,332		-
		17,689		18,828		-		15,453		16,692		-
With a related allowance recorded:
Commercial Real Estate	$	8,820	$	8,820	$	1,415		8,811		8,811		1,398
Residential Real Estate		435		452		8		109		109		4
Commercial and Industrial		1,848		2,063		501		-		-		-
Consumer and Other		172		204		2		10		10		10
		11,275		11,539		1,926		8,930		8,930		1,412
Impaired Loans, Total:
Commercial Real Estate		17,034		17,955		1,415		14,534		15,455		1,398
Residential Real Estate		4,573		4,664		8		3,962		4,009		4
Commercial and Industrial		6,532		6,866		501		4,700		4,816		-
Consumer and Other		825		882		2		1,187		1,342		10
Impaired Loans, Total	$	28,964	$	30,367	$	1,926	$	24,383	$	25,622	$	1,412

The following tables summarize additional information regarding impaired loans by class for the

three

months ended

March 31, 2021

and

2020.

	Three Months Ended March 31,
(In thousands)	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	6,078	$	-	$	3,467	$	-
Residential Real Estate		4,248		13		3,578		20
Commercial and Industrial		2,745		46		2,082		1
Consumer and Other		945		6		851		8
		14,016		65		9,978		29
With a related allowance recorded:
Commercial Real Estate		8,813		-		8,808		1
Residential Real Estate		190		3		28		2
Commercial and Industrial		462		26		-		-
Consumer and Other		47		2		51		1
		9,512		31		8,887		4
Impaired Loans, Total:
Commercial Real Estate		14,891		-		12,275		1
Residential Real Estate		4,438		16		3,606		22
Commercial and Industrial		3,207		72		2,082		1
Consumer and Other		992		8		902		9
Construction		-		-		-		-
Impaired Loans, Total	$	23,528	$	96	$	18,865	$	33

Impaired loans

may

consist of non-accrual loans and/or performing and non-performing TDRs. Based on the ongoing monitoring and analysis of the loan portfolio,

thirty-three

loans were identified as impaired, with a total recorded balance of

$29.0

 million as of

March 31, 2021,

for which

$1.9

million specific reserves were established. Twenty-

three

out of

thirty-three

impaired loans were individually evaluated for impairment, and the remaining

ten

impaired loans with balances under

$100,000,

were collectively evaluated, and

not

individually evaluated for impairment.

At

December 31, 2020,

exposure to the impaired loans was related to

twenty-six

borrowers. Total recorded balance was

$24.4

million, for which

$1.4

million special reserves were established. All impaired loans were evaluated individually.

For collateral dependent loans, appraisal reports of the underlying collateral, have been obtained from independent licensed appraisal firms. For non-performing loans, the independently determined appraised values were

first

reduced by a

5.8%

discount to reflect the Bank's experience selling Other Real Estate Owned (OREO) properties, and were further reduced by

8%

in selling costs, in order to estimate the potential loss, if any, that

may

eventually be realized. Performing loans are monitored to determine when, if at all, additional loan loss reserves

may

be required for a loss of underlying collateral value. For cash flow dependent loans, the Bank determined the reserve based on the present value of expected future cash flows discounted at the loan's effective interest rate.

Loans

not

requiring specific reserves had fair values exceeding the total recorded investment, supporting the net investment in the loan which includes principal balance, unamortized fees and costs and accrued interest, if any. Once a borrower is in default, Patriot is under

no

obligation to advance additional funds on unused commitments.

XML

Note 5 - Loans Held for Sale

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Loans Held for Sale [Text Block]

Note 5. Loans Held for Sale

SBA loans held for sale represent the guaranteed portion of SBA loans originated and are reflected at the lower of aggregate cost or market value. As of

March 31, 2021,

SBA loans held for sale, consisted of

$1.9

million SBA commercial real estate loans and

$938,000

SBA commercial and industrial loans, respectively. As of

December 31, 2020,

SBA loans held for sale only consisted of

$1.2

million of SBA commercial and industrial loans. During the

three

months ended

March 31, 2021,

$281,000

SBA loans previously classified as held for sale were transferred to held for investment.

The Company generally sells the guaranteed portion of its SBA loans to a

third

party and retains the servicing, holding the unguaranteed portion in its portfolio. When sales of SBA loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets, less the discount of the retained portion of the loan are recognized in income.

Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment will be evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment, if temporary, would be reported as a valuation allowance.

Serviced loans sold to others are

not

included in the accompanying consolidated balance sheets. The total amount of such loans serviced, but owned by

third

party, amounted to approximately

$20.0

million and

$19.4

million at

March 31, 2021

and

December 31, 2020,

respectively. The servicing asset has a carrying value of

$327,000

and fair value of

$391,000

at

March 31, 2021.

Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets. The servicing asset is included in other assets on the consolidated balance sheets.

The following table presents an analysis of the activity in the SBA servicing assets for the

three

months ended

March 31, 2021

and

2020:

(In thousands)	Three Months Ended March 31,
	2021			2020
Beginning balance	$	316		$	201
Servicing rights capitalized		17			2
Servicing rights amortized		(6	)		(5	)
Ending balance	$	327		$	198

XML

Note 6 - Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note 6. 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 intangible and adjustment of cash and contingent consideration. 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.

As of

December 31, 2020,

a purchase price adjustment of

$556,000

was recognized to project expenses on the consolidated statements of operations. The charge represented an adjustment to the earlier estimate of the final purchase price upon final settlement of the litigation related to a dispute over the final purchase price in

2020.

The goodwill is all deductible for income taxes over

15

years.

Goodwill is evaluated for impairment annually, in the

fourth

quarter of the year, 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, supply costs, unanticipated competitive activities, and acts by governments and courts.

The Company did

not

perform an interim goodwill test in the

first

quarter of

2021

as

no

events occurred which would trigger an impairment assessment.

XML

Note 7 - Deposits

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

Note 7. Deposits

The following table presents the balance of deposits held, by category as of

March 31, 2021

and

December 31, 2020.

(In thousands)	March 31,		December 31,
	2021		2020
Non-interest bearing	$	173,520	$	158,676
Interest bearing:
NOW		34,433		30,529
Savings		103,025		98,635
Money market		131,844		146,389
Certificates of deposit, less than $250,000		165,130		160,968
Certificates of deposit, $250,000 or greater		66,470		49,172
Brokered deposits		18,456		41,287
Interest bearing, Total		519,358		526,980
Total Deposits	$	692,878	$	685,656

On

July 22, 2020,

the Company completed the purchase of prepaid debit card deposits of

$50.0

million from a prominent national provider and processor of prepaid debit cards for corporate, consumer and government clients. The prepaid debit card deposits are included in the non-interest-bearing deposits, which totaled approximately

$68.8

million and

$59.3

million as of

March 31, 2021

and

December 31, 2020,

respectively.

As of

March 31, 2021,

contractual maturities of Certificates of Deposit (“CDs”), and brokered deposits is summarized as follows:

(In thousands)	CDs less than $250,000		CDs $250,000 or greater		Brokered Deposits		Total
1 year or less	$	146,767	$	45,491	$	16,957	$	209,215
More than 1 year through 2 years		14,345		19,978		1,000		35,323
More than 2 years through 3 years		2,667		751		-		3,418
More than 3 years through 4 years		1,074		250		499		1,823
More than 4 years through 5 years		277		-		-		277
	$	165,130	$	66,470	$	18,456	$	250,056

XML

Note 8 - Derivatives

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note 8. Derivatives

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

two

initial interest rate swaps under the program in

November 2018,

and another

two

swaps were entered into in

May 2019.

As of

March 31, 2021

and

December 31, 2020,

Patriot had cash pledged for collateral on its interest rate swaps of

$1.4

million and

$1.4

million, respectively. This collateral is included in other assets on the consolidated balance sheets.

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
March 31, 2021
Classified in Other Assets:
Customer interest rate swap	$	4,911		8.1		5.25	%	1 Mo. LIBOR + 1.96%	$	687
Customer interest rate swap		1,422		8.3		4.38	%	1 Mo. LIBOR + 2.00%		104
Classified in Other Liabilities:
3rd party interest rate swap	$	4,911		8.1		5.25	%	1 Mo. LIBOR + 1.96%	$	(687	)
3rd party interest rate swap		1,422		8.3		4.38	%	1 Mo. LIBOR + 2.00%		(104	)
December 31, 2020
Classified in Other Assets:
Customer interest rate swap	$	4,911		8.3		5.25	%	1 Mo. LIBOR + 1.96%	$	997
Customer interest rate swap		1,431		8.5		4.38	%	1 Mo. LIBOR + 2.00%		190
Classified in Other Liabilities:
3rd party interest rate swap	$	4,911		8.3		5.25	%	1 Mo. LIBOR + 1.96%	$	(997	)
3rd party interest rate swap		1,431		8.5		4.38	%	1 Mo. LIBOR + 2.00%		(190	)

XML

Note 9 - Share-based Compensation and Employee Benefit Plan

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

Note 9. Share-Based Compensation and Employee Benefit Plan

In

2011,

the Company adopted the Patriot National Bancorp, Inc.

2012

Stock Plan (the

“2012

Plan”). The

2012

Plan was amended in

2020

and renamed as the Patriot National Bancorp, Inc.

2020

Stock Plan (the

“2020

Plan”). A copy of the

2020

Plan was filed as Exhibit

10.1

to the Company's Amendment

No.

1

on Form

10

-K/A filed on

April 30, 2021.

The

2020

Plan provides an incentive to directors and employees of the Company by the grant of restricted stock awards (“RSA”).

The

2020

Plan authorizes

3,000,000

shares of the Company's Common Stock for issuance. As of

March 31, 2021,

2,850,507

shares of stock are available for issuance under the Plan. In accordance with the terms of the Plan, the vesting of RSAs and options

may

be accelerated at the discretion of the Compensation Committee of the Board of Directors. The Compensation Committee sets the terms and conditions applicable to the vesting of RSAs and stock option grants. RSAs granted to directors and employees generally vest in quarterly or annual installments over a

three

,

four

or

five

year period from the date of grant.

The following is a summary of the status of the Company's restricted shares and changes for the

three

months ended

March 31, 2021

and

2020:

Three months ended March 31, 2021:	Number of Shares Awarded			Weighted Average Grant Date Fair Value
Unvested at December 31, 2020		18,498		$	7.29
Vested		(700	)	$	17.85
Unvested at March 31, 2021		17,798		$	6.88
Three months ended March 31, 2020:
Unvested at December 31, 2019		21,470		$	12.91
Vested		(2,172	)	$	14.56
Unvested at March 31, 2020		19,298		$	12.73

The Company recognizes compensation expense for all director and employee share-based compensation awards on a straight-line basis over the requisite service period, which is equal to the vesting schedule of each award, for each vesting portion of an award equal to its grant date fair value.

For the

three

months ended

March 31, 2021

and

2020,

the Company recognized total share-based compensation expense of

$34,000

and

$43,000,

respectively. The share-based compensation attributable to employees of Patriot amounted to

$15,000

and

$25,000,

respectively. Included in share-based compensation expense were

$19,000

and

$18,000

attributable to Patriot's external directors, who received total compensation of

$94,000

and

$117,000

for each of those periods, respectively, which amounts are included in other operating expenses in the consolidated statements of operations.

Unrecognized compensation expense attributable to the unvested restricted shares outstanding as of

March 31, 2021

amounted to

$149,000,

which amount is expected to be recognized over the weighted average remaining life of the awards of

1.71

years.

Dividends

The Company has

not

paid any dividends since

2020

and has temporarily suspended dividend payments pending resolution of the economic uncertainties associated with the Coronavirus pandemic.

Retirement Plan

The Company offers a

401K

retirement plan (the

“401K”

), which provides for tax-deferred salary deductions for eligible employees. Employees

may

choose to make voluntary contributions to the

401K,

limited to an annual maximum amount as set forth periodically by the Internal Revenue Service. The Company matches

50%

of such contributions, up to a maximum of

six

percent of an employee's annual compensation. During the

three

months ended

March 31, 2021

and

2020,

compensation expense under the

401K

aggregated

$48,000

and

$89,000,

respectively.

XML

Note 10 - Earnings (Loss) Per Share

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 10. Earnings (loss) per share

The Company is required to present basic earnings (loss) per share and diluted earnings (loss) per share in its Consolidated Statements of Operations. Basic earnings (loss) per share amounts are computed by dividing net (loss) income by the weighted average number of common shares outstanding. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if potentially dilutive common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that

may

be issued by the Company relate to outstanding unvested RSAs granted to directors and employees. The dilutive effect resulting from these potential shares is determined using the treasury stock method. The Company is also required to provide a reconciliation of the numerator and denominator used in the computation of both basic and diluted earnings (loss) per share.

The following table summarizes the computation of basic and diluted earnings (loss) per share for the

three

months ended

March 31, 2021

and

2020:

(Net income (loss) in thousands)	Three Months Ended March 31,
	2021		2020
Basis earnings (loss) per share:
Net income (loss) attributable to Common shareholders	$	854	$	(1,072	)
Divided by:
Weighted average shares outstanding		3,943,580		3,931,388
Basic earnings (loss) per common share	$	0.22	$	(0.27	)
Diluted earnings (loss) per share:
Net income (loss) attributable to Common shareholders	$	854	$	(1,072	)
Weighted average shares outstanding		3,943,580		3,931,388
Effect of potentially dilutive restricted common shares		1,540		-	(1)
Divided by:
Weighted average diluted shares outstanding		3,945,120		3,931,388
Diluted earnings (loss) per common share	$	0.22	$	(0.27	)

( 1 ) The weighted average diluted shares outstanding does not include 10,112 anti-dilutive restricted common shares for the three months ended March 31, 2020.

XML

Note 11 - Financial Instruments With Off-balance Sheet Risk

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note 11. Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, Patriot is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet. The contractual amounts of these instruments reflect the extent of involvement Patriot has in particular classes of financial instruments.

The contractual amount of commitments to extend credit and standby letters of credit represents the maximum amount of potential accounting loss should: the contract be fully drawn upon; the customer default; and the value of any existing collateral become worthless. Patriot applies its credit policies to entering commitments and conditional obligations and, as with its lending activates, evaluates each customer's creditworthiness on a case-by-case basis. Management believes that it effectively mitigates the credit risk of these financial instruments through its credit approval processes, establishing credit limits, monitoring the on-going creditworthiness of recipients and grantees, and the receipt of collateral as deemed necessary.

Financial instruments with credit risk at

March 31, 2021

and

December 31, 2020

are as follows:

	March 31,		December 31,
(In thousands)	2021		2020
Commitments to extend credit:
Unused lines of credit	$	62,473	$	61,622
Undisbursed construction loans		19,302		25,232
Home equity lines of credit		18,779		19,240
Future loan commitments		27,645		15,696
Financial standby letters of credit		564		604
	$	128,763	$	122,394

Commitments to extend credit are agreements to lend to a customer as long as there is

no

violation of any condition established in the contract. Commitments to extend credit generally have fixed expiration dates or other termination clauses, and

may

require payment of a fee by the borrower. Since these commitments could expire without being drawn upon, the total commitment amounts do

not

necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary upon extending credit, is based on management's credit evaluation of the customer. Collateral held varies, but

may

include commercial property, residential property, deposits and securities. Patriot has established a reserve for credit loss of

$8,000

and

$8,000

as of

March 31, 2021

and

December 31, 2020,

respectively, which is included in accrued expenses and other liabilities.

Standby letters of credit are written commitments issued by Patriot to guarantee the performance of a customer to a

third

party. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loan facilities to customers. Guarantees that are

not

derivative contracts are recorded at fair value and included in the consolidated balance sheet.

XML

Note 12 - Regulatory and Operational Matters

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 12. Regulatory and Operational Matters

In

November 2018,

the Bank entered into a formal written agreement (the “Agreement”) with the OCC.  Pursuant to the terms of the Agreement, the Bank has appointed a Compliance Committee of

three

independent outside directors and

one

member of management responsible for monitoring adherence to the Agreement and has appointed a Lead Independent Director.

The Agreement states that the Board of the Bank would develop, implement and revise written documents and policies related to executive compensation, conflict of interest, internal audit, liquidity and asset/liability management, commercial loan administration, leveraged lending, practices relating to the allowance for loan and lease losses, and assumptions used in the Bank's interest rate risk model. Under the Agreement, the Bank agreed to provide a revised written

3

-year strategic and capital plan for the Bank. The Bank provided the documents and policies requested in the Agreement. To date, the Bank has addressed each of the items identified in the Agreement and is currently working collaboratively with the OCC to bring all matters to full resolution. Further details pertaining to the Agreement were provided in Part II Item

9B:

Other information included on the Annual Report on Form

10

-K for the year ended

December 31, 2018.

Federal and state regulatory authorities have adopted standards requiring financial institutions to maintain increased levels of capital. Effective

January 1, 2015,

federal banking agencies imposed

four

minimum capital requirements on a community bank's risk-based capital ratios consisting of Total Capital, Tier

1

Capital, Common Equity Tier

1

(

“CET1”

) Capital, and a Tier

1

Leverage Capital ratio. The risk-based capital ratios measure the adequacy of a bank's capital against the riskiness of its on- and off-balance sheet assets and activities. Failure to maintain adequate capital is a basis for "prompt corrective action" or other regulatory enforcement action. In assessing a bank's capital adequacy, regulators also consider other factors such as interest rate risk exposure, liquidity, funding and market risks, quality and level of earnings, concentrations of credit, quality of loans and investments, nontraditional activity risk, policy effectiveness, and management's overall ability to monitor and control risk.

In

September 2019,

the community bank leverage ratio (CBLR) framework was jointly issued by the FDIC, OCC and FRB. The final rule gives qualifying community banks the option to use a simplified measure of capital adequacy instead of risk based capital, beginning with their

March 31, 2020

Call Report. Under the final rule a community bank

may

qualify for the CBLR framework if it has a Tier

1

leverage ratio of greater than

9%,

less than

$10

billion in total consolidated assets, and limited amounts of off-balance sheet exposures and trading assets and liabilities. The Bank did

not

adopt the CBLR framework at

March 31, 2021

but retains the option to adopt the framework in a future period.

Capital adequacy is

one

of the most important factors used to determine the safety and soundness of individual banks and the banking system. Under the instituted regulatory framework, to be considered “well capitalized”, a financial institution must generally have a Total Capital ratio of at least

10%,

a Tier

1

Capital ratio of at least

8.0%,

a

CET1

Capital ratio at least

6.5%,

and a Tier

1

Leverage Capital ratio of at least

9.0%.

However, regardless of a financial institution's ratios, the OCC

may

require increased capital ratios or impose dividend restrictions based on the other factors it considers in assessing a bank's capital adequacy.

Management continuously assesses the adequacy of the Bank's capital in order to maintain its “well capitalized” status.

The Company's and the Bank's regulatory capital amounts and ratios at

March 31, 2021

and

December 31, 2020

are summarized as follows:

(In thousands)	Patriot National Bancorp, Inc.								Patriot Bank, N.A.
	March 31, 2021				December 31, 2020				March 31, 2021				December 31, 2020
	Amount ($)		Ratio (%)		Amount ($)		Ratio (%)		Amount ($)		Ratio (%)		Amount ($)		Ratio (%)
Total Capital (to risk weighted assets):
Actual	$	88,039		11.804	$	87,428		11.132	$	98,538		13.317	$	97,608		12.510
To be Well Capitalized (1)		-		-		-		-		73,994		10.000		78,026		10.000
For capital adequacy with Capital Buffer (2)		-		-		-		-		77,693		10.500		81,927		10.500
For capital adequacy		59,665		8.000		62,827		8.000		59,195		8.000		62,421		8.000
Tier 1 Capital (to risk weighted assets):
Actual		68,703		9.212		67,602		8.608		89,274		12.065		87,844		11.258
To be Well Capitalized (1)		-		-		-		-		59,195		8.000		62,421		8.000
For capital adequacy with Capital Buffer (2)		-		-		-		-		62,895		8.500		66,322		8.500
For capital adequacy		44,749		6.000		47,120		6.000		44,396		6.000		46,815		6.000
Common Equity Tier 1 Capital (to risk weighted assets):
Actual		60,703		8.139		59,602		7.589		89,274		12.065		87,844		11.258
To be Well Capitalized (1)		-		-		-		-		48,096		6.500		50,717		6.500
For capital adequacy with Capital Buffer (2)		-		-		-		-		51,796		7.000		54,618		7.000
For capital adequacy		33,562		4.500		35,340		4.500		33,297		4.500		35,112		4.500
Tier 1 Leverage Capital (to average assets):
Actual		68,703		7.791		67,602		7.539		89,274		10.122		87,844		9.794
To be Well Capitalized (1)		-		-		-		-		79,378		9.000		80,721		9.000
For capital adequacy		35,272		4.000		35,868		4.000		35,279		4.000		35,876		4.000

( 1 )	Designation as "Well Capitalized" does not apply to bank holding companies - the Company. Such categorization of capital adequacy only applies to insured depository institutions - the Bank.
( 2 )	The Capital Conservation Buffer implemented by the FDIC began to be phased in beginning January 1, 2016. It was not applicable to periods prior to that date and does not apply to bank holding companies - the Company.

Under the final capital rules that became effective on

January 1, 2015,

there was a requirement for a

CET1

capital conservation buffer of

2.5%

of risk-weighted assets, which is in addition to the other minimum risk-based capital standards in the rule. Institutions that do

not

maintain this required capital buffer become subject to progressively more stringent limitations on the percentage of earnings that

may

be distributed to shareholders or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital conversation buffer of

2.5%

has been included in the minimum capital adequacy ratios in the

2021

and

2020

column above.

The capital buffer requirement effectively raises the minimum required Total Capital ratio to

10.5%,

the Tier

1

capital ratio to

8.5%

and the

CET1

capital ratio to

7.0%

on a fully phased-in basis, which was effective on

January 

1,

 

2019.

As of

March 31, 2021,

Patriot satisfies all regulatory capital adequacy requirements on a fully phased-in basis.

On

January 22, 2019,

based on its supervisory profile, the Bank was notified by the OCC that it established individual minimum capital ratios for the Bank. Specifically, the Bank is required to maintain a Tier

1

leverage ratio of

9.0%

and a total risk-based capital to risk-weighted assets of

11.0%.

At

March 31, 2021,

the Bank exceeded all of its regulatory capital requirements with a Tier

1

leverage capital level of

10.1%

of adjusted total assets of

$89.3

million, which is above the well-capitalized required level of

9.0%;

and total risk-based capital of

$98.5

million, or

13.3%

of risk-weighted assets, which is above the well-capitalized required level of

11.0%

of risk weighted assets. At

December 31, 2020,

the Bank exceeded all of its regulatory capital requirements with a Tier

1

leverage capital level of

$87.8

million, or

9.8%

of adjusted total assets, which is above the well-capitalized required level of

9.0%;

total risk-based capital of

$97.6

million, or

12.5%

of risk-weighted assets, which is above the well-capitalized required level of

11.0%

of risk-weighted assets. Accordingly, the Bank was categorized as well capitalized as of

March 31, 2021

and

December 31, 2020.

Management is

not

aware of any conditions or events since the most recent notification that would change the Bank's category.

XML

Note 13 - Fair Value and Interest Rate Risk

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 13. Fair Value and Interest Rate Risk

Patriot measures the carrying value of certain financial assets and liabilities at fair value, as required by its policies as a financial institution and by US GAAP. The carrying values of certain assets and liabilities are measured at fair value on a recurring basis, such as available-for-sale securities; while other assets and liabilities are measured at fair value on a non-recurring basis due to external factors requiring management's judgment to estimate potential losses of value resulting in asset impairments or the establishment of valuation reserves. Measuring assets and liabilities at fair value

may

result in fluctuations to carrying value that have a significant impact on the results of operations or other comprehensive income for the period and period over period.

Following is a detailed summary of the guidance provided by US GAAP regarding the application of fair value measurements and Patriot's application thereof. Additionally, the following information includes detailed summaries of the effects fair value measurements have on the carrying amounts of asset and liabilities presented in the consolidated financial statements.

The objective of fair value measurement is to value an asset that

may

be sold or a liability that

may

be transferred at the estimated value which might be obtained in a transaction between unrelated parties under current market conditions. US GAAP establishes a framework for measuring assets and liabilities at fair value, as well as certain financial instruments classified in equity. The framework provides a fair value hierarchy, which prioritizes quoted prices in active markets for identical assets and liabilities and minimizes unobservable inputs, which are inputs for which market data are

not

available and that are developed by management using the best information available to develop assumptions about the value market participants might place on the asset to be sold or liability to be transferred.

The

three

levels of the fair value hierarchy consist of:

Level 1 Unadjusted quoted market prices for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date (such as active exchange-traded equity securities and certain U.S. and government agency debt securities).

Level 2 Observable inputs other than quoted prices included in Level 1, such as:

- Quoted prices for similar assets or liabilities in active markets (such as U.S. agency and government sponsored mortgage-backed securities)

- Quoted prices for identical or similar assets or liabilities in less active markets (such as certain U.S. and government agency debt securities, and corporate and municipal debt securities that trade infrequently)

- Other inputs that are observable for substantially the full term of the asset or liability (i.e. interest rates, yield curves, prepayment speeds, default rates, etc.).

Level 3 Valuation techniques that require unobservable inputs that are supported by little or no market activity and are significant to the fair value measurement of the asset or liability (such as pricing and discounted cash flow models that typically reflect management's estimates of the assumptions a market participant would use in pricing the asset or liability).

A description of the valuation methodologies used for assets and liabilities recorded at fair value, and for estimating fair value for financial and non-financial instruments

not

recorded at fair value, is set forth below.

Cash and due from banks and accrued interest receivable and payable

The carrying amount is a reasonable estimate of fair value and accordingly these are classified as Level

1.

These financial instruments are

not

recorded at fair value on a recurring basis.

Available-for-sale securities

The fair value of securities available for sale (carried at fair value) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level

1

), or matrix pricing (Level

2

), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities' relationship to other benchmark quoted prices, or using unobservable inputs employing various techniques and assumptions (Level 

3

).

Other Investments

The Bank's investment portfolio includes the Solomon Hess SBA Loan Fund totaling

$4.45

million. This investment is utilized by the Bank to satisfy its Community Reinvestment Act (“CRA”) lending requirements. As this fund operates as a private fund, shares in the fund are

not

publicly traded but

may

be redeemed with

60

days' notice at cost. For that reason, the carrying amount was considered comparable to fair value at both

March 31, 2021

and

December 31, 2020

due to its short-term nature.

Federal Reserve Bank Stock and Federal Home Loan Bank Stock

Shares in the Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) are purchased and redeemed based upon their

$100

par value. The stocks are non-marketable equity securities, and as such, are considered restricted securities that are carried at cost.

Loans

The fair value of loans are estimated by discounting the future cash flows using the rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We estimate the fair value of our loan portfolio using an exit price notion resulting in prior periods

no

longer being comparable. The exit price notion requires determination of the price at which willing market participants would transact at the measurement date under current market conditions depending on facts and circumstances, such as origination rates, credit risk, transaction costs, liquidity, national and regional market trends and other adjustments, utilizing publicly available rates and indices. The application of an exit price notion requires the use of significant judgment.

Loans Held for Sale

The fair value of loans held for sale is estimated by using a market approach that includes prices for loans sold awaiting settlement and other observable inputs. The Company has determined that the inputs used to value the loans held for sale fall within Level

2

of the fair value hierarchy.

SBA Servicing Asset

Servicing assets do

not

trade in an active, open market with readily observable prices. The Company estimates the fair value of servicing assets using discounted cash flow models incorporating numerous assumptions from the perspective of a market participant including market discount rates and prepayment speeds. Due to the significant unobservable input related to the servicing rights, the SBA servicing asset is classified within Level

3

of the valuation hierarchy.

Other Real Estate Owned

The fair value of OREO the Bank

may

obtain is based on current appraised property value less estimated costs to sell. When fair value is based on unadjusted current appraised value, OREO is classified within Level

2

of the fair value hierarchy. Patriot classifies OREO within Level

3

of the fair value hierarchy when unobservable inputs are used to determine adjustments to appraised values. Patriot does

not

record OREO at fair value on a recurring basis, but rather initially records OREO at fair value on a non-recurring basis and then monitors property and market conditions that

may

indicate a change in value is warranted.

Derivative asset (liability) - Interest Rate Swaps

The valuation of the Company's interest rate swaps is obtained from a

third

-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Company has determined that the inputs used to value its interest rate derivatives fall within Level

2

of the fair value hierarchy.

Deposits

The fair value of demand deposits, regular savings and certain money market deposits is the amount payable on demand at the reporting date.

The fair value of certificates of deposit and other time deposits is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities, estimated using local market data, to a schedule of aggregated expected maturities on such deposits. Patriot does

not

record deposits at fair value on a recurring basis.

Senior Notes, Subordinated Notes, and Junior Subordinated Debt and Note Payable

Patriot does

not

record senior notes at fair value on a recurring basis. The fair value of the senior notes was estimated by discounting future cash flows at rates at which similar notes would be made. The carrying value is considered comparable to fair value.

Patriot does

not

record subordinated notes issued in

June 2018

at fair value on a recurring basis. The fair value of the subordinated notes was estimated by discounting future cash flows at rates at which similar notes would be made. The carrying value is considered comparable to fair value.

Patriot does

not

record junior subordinated debt at fair value on a recurring basis. Junior subordinated debt reprices quarterly, as a result, the carrying amount is considered a reasonable estimate of fair value.

The Company considers its own credit worthiness in determining the fair value of its Senior Notes, Subordinated Notes, Notes Payable and Junior Subordinated Debt.

Federal Home Loan Bank Borrowings

The fair value of FHLB advances is estimated using a discounted cash flow calculation that applies current FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances. Patriot does

not

record FHLB advances at fair value on a recurring basis.

Off-balance sheet financial instruments

Off-balance sheet financial instruments are based on interest rate changes and fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. The off-balance-sheet financial instruments (i.e., commitments to extend credit) are insignificant and are

not

recorded on a recurring basis.

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, 2021

and

December 31, 2020:

(In thousands)		March 31, 2021				December 31, 2020
	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	$	2,593	$	2,593	$	3,006	$	3,006
Interest-bearing deposits due from banks	Level 1		81,681		81,681		31,630		31,630
Available-for-sale securities	Level 2		57,893		57,893		49,262		49,262
Other investments	Level 2		4,450		4,450		4,450		4,450
Federal Reserve Bank stock	Level 2		2,744		2,744		2,783		2,783
Federal Home Loan Bank stock	Level 2		4,503		4,503		4,503		4,503
Loans receivable, net	Level 3		666,250		663,233		719,596		716,822
Loans held for sale	Level 2		2,829		3,008		1,217		1,343
SBA servicing assets	Level 3		327		391		316		375
Other real estate owned	Level 2		1,216		1,216		1,906		1,906
Accrued interest receivable	Level 2		6,270		6,270		6,620		6,620
Interest rate swap receivable	Level 2		791		791		1,187		1,187
Financial assets, total		$	831,547	$	828,773	$	826,476	$	823,887
Financial Liabilities:
Demand deposits	Level 2	$	173,520	$	173,520	$	158,676	$	158,676
Savings deposits	Level 2		103,025		103,025		98,635		98,635
Money market deposits	Level 2		131,844		131,844		146,389		146,389
NOW accounts	Level 2		34,433		34,433		30,529		30,529
Time deposits	Level 2		231,600		232,326		210,140		210,882
Brokered deposits	Level 1		18,456		18,675		41,287		41,643
FHLB borrowings	Level 2		90,000		96,322		90,000		97,293
Senior notes	Level 2		11,946		12,022		11,927		12,028
Subordinated debt	Level 2		9,789		10,072		9,782		10,125
Junior subordinated debt owed to unconsolidated trust	Level 2		8,112		8,112		8,110		8,110
Note payable	Level 3		943		916		994		997
Accrued interest payable	Level 2		693		693		572		572
Interest rate swap liability	Level 2		791		791		1,187		1,187
Financial liabilities, total		$	815,152	$	822,751	$	808,228	$	817,066

The carrying amount of cash and noninterest bearing balances due from banks, interest-bearing deposits due from banks, and demand deposits approximates fair value, due to the short-term nature and high turnover of these balances. These amounts are included in the table above for informational purposes.

In the normal course of its operations, Patriot assumes interest rate risk (i.e., the risk that general interest rate levels will fluctuate). As a result, the fair value of the Patriot's financial assets and liabilities are affected when interest market rates change, which change

may

be either favorable or unfavorable. Management attempts to mitigate interest rate risk by matching the maturities of its financial assets and liabilities. However, borrowers with fixed rate obligations are less likely to prepay their obligations in a rising interest rate environment and more likely to prepay their obligations in a falling interest rate environment. Conversely, depositors receiving fixed rates are more likely to withdraw funds before maturity in a rising interest rate environment and less likely to do so in a falling interest rate environment. Management monitors market rates of interest and the maturities of its financial assets and financial liabilities, adjusting the terms of new loans and deposits in an attempt to minimize interest rate risk. Additionally, management mitigates its overall interest rate risk through its available funds investment strategy.

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, 2021

and

December 31, 2020:

(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, 2021:
U. S. Government agency mortgage-backed securities	$	-	$	22,687	$	-	$	22,687
Corporate bonds		-		17,333		-		17,333
Subordinated notes		-		9,149		-		9,149
SBA loan pools		-		8,165		-		8,165
Municipal bonds		-		559		-		559
Available-for-sale securities	$	-	$	57,893	$	-	$	57,893
Interest rate swap receivable	$	-	$	791	$	-	$	791
Interest rate swap liability	$	-	$	791	$	-	$	791
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	-	$	16,833	$	-	$	16,833
Corporate bonds		-		17,290		-		17,290
Subordinated notes		-		9,005		-		9,005
SBA loan pools		-		5,567		-		5,567
Municipal bonds		-		567		-		567
Available-for-sale securities	$	-	$	49,262	$	-	$	49,262
Interest rate swap receivable	$	-	$	1,187	$	-	$	1,187
Interest rate swap liability	$	-	$	1,187	$	-	$	1,187

Patriot measures certain financial assets and financial liabilities at fair value on a non-recurring basis. When circumstances dictate (e.g., impairment of long-lived assets, other than temporary impairment of collateral value), the carrying values of such financial assets and financial liabilities are adjusted to fair value or fair value less costs to sell, as

may

be appropriate.

During the

three

months ended

March 31, 2021

and

2020,

the Company had

no

transfers into or out of Levels

1,

2

or

3.

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, 2021

and

December 31, 2020:

(In thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
March 31, 2021:
Impaired loans, net	$	26,538	Real Estate Appraisals	Discount for appraisal type	5.8%	-	20%
Other Real Estate Owned		1,216	Real Estate Appraisals	Discount for appraisal type		5.84%
SBA servicing assets		391	Discounted Cash Flows	Market discount rates	14.73%	-	14.90%
December 31, 2020:
Impaired loans, net	$	22,971	Real Estate Appraisals	Discount for appraisal type	5.8%	-	20%
Other Real Estate Owned		1,906	Real Estate Appraisals	Discount for appraisal type		5.84%
SBA servicing assets		375	Discounted Cash Flows	Market discount rates	14.73%	-	14.90%

Patriot discloses fair value information about financial instruments, whether or

not

recognized in the consolidated balance sheet, for which it is practicable to estimate that value. Certain financial instruments are excluded from disclosure requirements and, accordingly, the aggregate fair value amounts presented do

not

necessarily represent the complete underlying value of financial instruments included in the consolidated financial statements.

The estimated fair value amounts have been measured as of

March 31, 2021

and

December 31, 2020,

and have

not

been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of the financial instruments measured

may

be different than if they had been subsequently valued.

The information presented should

not

be interpreted as an estimate of the total fair value of Patriot's assets and liabilities, since only a portion of Patriot's assets and liabilities are required to be measured at fair value for financial reporting purposes. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between Patriot's fair value disclosures and those of other bank holding companies

may

not

be meaningful.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Employee Retention Tax Credit Policy [Policy Text Block]

Employee Retention Credit

The CARES Act also provided for an employee retention credit (“Employee Retention Credit”), which is a refundable tax credit against certain employment taxes of up to

$5,000

per employee for eligible employers. The tax credit is equal to

70%

of qualified wages paid to employees during a quarter, capped at

$10,000

of qualified wages per employee throughout the year. The Company adopted a policy to recognize the employee retention credit when earned and to recognize the credit as a reduction to compensation and benefits expense on the Company's consolidated statements of operations. Accordingly, the Company recorded an employee retention credit of

$843,000

in the

first

quarter of

2021.

The Company is currently in the process of filing for this credit.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted and Issued Accounting Standards

Accounting Standards Adopted During

2021

Effective

January 1, 2021,

the following new Accounting Standards Updates (ASU) were adopted by the Company:

ASU

2019

-

12

ASU

2019

-

12,

“

Income Taxes (Topic

740

) - Simplifying the Accounting for Income Taxes.

” The guidance issued in this update simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC

740

related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences. ASU

2019

-

12

also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The ASU is effective for the Company on

January 1, 2021.

The adoption of ASU

2019

-

12

did

not

have any impact on our consolidated financial statements.

Accounting Standards Issued But

Not

Yet Adopted

ASU

2016

-

13

In

June 2016,

the FASB issued ASU

2016

-

13,

Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments

. The ASU changes the methodology for measuring credit losses on financial instruments measured at amortized cost to a current expected loss (“CECL”) model. Under the CECL model, entities will estimate credit losses over the entire contractual term of a financial instrument from the date of initial recognition of the instrument. The ASU also changes the existing impairment model for available-for-sale debt securities. In cases where there is neither the intent nor a more-likely-than-

not

requirement to sell the debt security, an entity will record credit losses as an allowance rather than a direct write-down of the amortized cost basis. Additionally, ASU

2016

-

13

notes that credit losses related to available-for-sale debt securities and purchased credit impaired loans should be recorded through an allowance for credit losses. ASU

2016

-

13

is effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after

December 15, 2018.

In

November 2019,

the FASB issued ASU

2019

-

10,

which amends the effective date of ASC

326

for smaller reporting companies, as defined by the SEC, and other non-SEC reporting entities, and delays the effective date to fiscal years beginning after

December 31, 2022,

including interim periods within those fiscal periods. As the Company is a small reporting company, the delay will be applicable to the Company. Management is currently evaluating the impact that the standard will have on its consolidated financial statements.

ASU Update

2020

-

02

In

January 2020,

the FASB issued ASU

No.

2020

-

02,

“

Financial Instruments - Credit Losses (Topic

326

) and Leases (Topic

842

): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin

No.

119

and Update to SEC Section on Effective Date Related to Accounting Standards Update

No.

2016

-

02,

Leases (Topic

842

).

” This ASU adds and amends SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin

No.

119,

related to the new credit losses standard, and comments by the SEC staff related to the revised effective date of the new leases standard. This ASU is effective upon issuance. See the discussion regarding the adoption of ASU

2016

-

13

above.

ASU Update

2020

-

03

In

March 2020,

the FASB issued ASU

No.

2020

-

3,

“

Codification Improvements to Financial Instruments.

” This ASU clarifies various financial instruments topics, including the CECL standard issued in

2016.

Amendments related to ASU

2016

-

13

for entities that have

not

yet adopted that guidance are effective upon adoption of the amendments in ASU

2016

-

13.

Early adoption is

not

permitted before an entity's adoption of ASU

2016

-

13.

Other amendments are effective upon issuance of this ASU. See the discussion regarding the adoption of ASU

2016

-

13

above.

ASU Update

2020

-

04

In

March 2020,

the FASB issued ASU

No.

2020

-

4,

"Reference Rate Reform". This ASU provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this update are effective for all entities as of

March 12, 2020

through

December 31, 2022.

As of

December 31, 2020,

the Company has

not

made any elections under ASU

2020

-

04

but continues to evaluate the impact of reference rate reform and which optional expedients and exceptions might be elected.

XML

Note 3 - Available-for-sale Securities (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Debt Securities, Available-for-sale [Table Text Block]

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2021:
U. S. Government agency mortgage-backed securities	$	22,867	$	109	$	(289	)	$	22,687
Corporate bonds		18,013		272		(952	)		17,333
Subordinated notes		9,040		115		(6	)		9,149
SBA loan pools		8,336		-		(171	)		8,165
Municipal bonds		564		-		(5	)		559
	$	58,820	$	496	$	(1,423	)	$	57,893
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	16,719	$	131	$	(17	)	$	16,833
Corporate bonds		18,014		260		(984	)		17,290
Subordinated notes		9,036		97		(128	)		9,005
SBA loan pools		5,627		-		(60	)		5,567
Municipal bonds		564		3		-			567
	$	49,960	$	491	$	(1,189	)	$	49,262

Schedule of Unrealized Loss on Investments [Table Text Block]

(In thousands)	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
March 31, 2021:
U. S. Government agency mortgage-backed securities	$	14,055	$	(288	)	$	77	$	(1	)	$	14,132	$	(289	)
Corporate bonds		-		-			13,047		(952	)		13,047		(952	)
Subordinated notes		999		(1	)		1,104		(5	)		2,103		(6	)
SBA loan pools		4,458		(127	)		3,707		(44	)		8,165		(171	)
Municipal bonds		403		(5	)		-		-			403		(5	)
	$	19,915	$	(421	)	$	17,935	$	(1,002	)	$	37,850	$	(1,423	)
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	5,797	$	(14	)	$	1,476	$	(3	)	$	7,273	$	(17	)
Corporate bonds		-		-			13,015		(984	)		13,015		(984	)
Subordinated notes		1,878		(122	)		1,103		(6	)		2,981		(128	)
SBA loan pools		1,533		(12	)		4,034		(48	)		5,567		(60	)
	$	9,208	$	(148	)	$	19,628	$	(1,041	)	$	28,836	$	(1,189	)

Investments Classified by Contractual Maturity Date [Table Text Block]

(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
March 31, 2021:
Corporate bonds	$	4,013	$	14,000	$	-	$	18,013	$	4,285	$	13,048	$	-	$	17,333
Subordinated notes		2,000		7,040		-		9,040		2,003		7,146		-		9,149
SBA loan pools		1,735		3,468		3,133		8,336		1,715		3,427		3,023		8,165
Municipal bonds		-		564		-		564		-		559		-		559
Available-for-sale securities with stated maturity dates		7,748		25,072		3,133		35,953		8,003		24,180		3,023		35,206
U. S. Government agency mortgage-backed securities		1,035		1,343		20,489		22,867		1,036		1,367		20,284		22,687
	$	8,783	$	26,415	$	23,622	$	58,820	$	9,039	$	25,547	$	23,307	$	57,893
December 31, 2020:
Corporate bonds	$	4,014	$	14,000	$	-	$	18,014	$	4,274	$	13,016	$	-	$	17,290
Subordinated notes		2,000		7,036		-		9,036		2,003		7,002		-		9,005
SBA loan pools		1,921		3,706		-		5,627		1,899		3,668		-		5,567
Municipal bonds		-		564		-		564		-		567		-		567
Available-for-sale securities with stated maturity dates		7,935		25,306		-		33,241		8,176		24,253		-		32,429
U. S. Government agency mortgage-backed securities		3,364		1,466		11,889		16,719		3,363		1,491		11,979		16,833
	$	11,299	$	26,772	$	11,889	$	49,960	$	11,539	$	25,744	$	11,979	$	49,262

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Note 4 - Loan Receivables and Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	March 31,			December 31,
(In thousands)	2021			2020
Loan portfolio segment:
Commercial Real Estate	$	261,461		$	282,378
Residential Real Estate		147,947			153,851
Commercial and Industrial		138,966			144,297
Consumer and Other		56,485			67,635
Construction		55,523			66,984
Construction to Permanent - CRE		16,294			15,035
Loans receivable, gross		676,676			730,180
Allowance for loan and lease losses		(10,426	)		(10,584	)
Loans receivable, net	$	666,250		$	719,596

Financing Receivable, Allowance for Credit Loss [Table Text Block]

(In thousands)	Commercial Real Estate			Residential Real Estate			Commercial and Industrial			Consumer and Other			Construction			Construction to Permanent - CRE			Unallocated			Total
Three months ended  March 31, 2021
Allowance for loan and lease losses:
December 31, 2020	$	4,485		$	1,379		$	3,284		$	295		$	739		$	162		$	240		$	10,584
Charge-offs		(42	)		(3	)		(209	)		(18	)		-			-			-			(272	)
Recoveries		-			-			12			102			-			-			-			114
Provisions (credits)		(289	)		533			537			3			(459	)		(85	)		(240	)		-
March 31, 2021	$	4,154		$	1,909		$	3,624		$	382		$	280		$	77		$	-		$	10,426
Three months ended  March 31, 2020
Allowance for loan and lease losses:
December 31, 2019	$	3,789		$	1,038		$	4,340		$	341		$	477		$	130		$	-		$	10,115
Charge-offs		-			(1	)		(4	)		(39	)		-			-			-			(44	)
Recoveries		-			-			40			1			-			-			-			41
Provisions (credits)		361			83			14			231			126			(11	)		-			804
March 31, 2020	$	4,150		$	1,120		$	4,390		$	534		$	603		$	119		$	-		$	10,916

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
March 31, 2021
Allowance for loan and lease losses:
Individually evaluated for impairment	$	1,414	$	4	$	501	$	-	$	-	$	-	$	-	$	1,919
Collectively evaluated for impairment		2,740		1,905		3,123		382		280		77		-		8,507
Total allowance for loan and lease losses	$	4,154	$	1,909	$	3,624	$	382	$	280	$	77	$	-	$	10,426
Loans receivable, gross:
Individually evaluated for impairment	$	17,025	$	4,247	$	6,532	$	653	$	-	$	-	$	-	$	28,457
Collectively evaluated for impairment		244,436		143,700		132,434		55,832		55,523		16,294		-		648,219
Total loans receivable, gross	$	261,461	$	147,947	$	138,966	$	56,485	$	55,523	$	16,294	$	-	$	676,676

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
December 31, 2020
Allowance for loan and lease losses:
Individually evaluated for impairment	$	1,398	$	4	$	-	$	10	$	-	$	-	$	-	$	1,412
Collectively evaluated for impairment		3,087		1,375		3,284		285		739		162		240		9,172
Total allowance for loan losses	$	4,485	$	1,379	$	3,284	$	295	$	739	$	162	$	240	$	10,584
Loans receivable, gross:
Individually evaluated for impairment	$	14,534	$	3,962	$	4,700	$	1,187	$	-	$	-	$	-	$	24,383
Collectively evaluated for impairment		267,844		149,889		139,597		66,448		66,984		15,035		-		705,797
Total loans receivable, gross	$	282,378	$	153,851	$	144,297	$	67,635	$	66,984	$	15,035	$	-	$	730,180

Financing Receivable, Past Due [Table Text Block]

(In thousands)	Performing (Accruing) Loans
As of March 31, 2021:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non-accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	517	$	750	$	-	$	1,267	$	210,720	$	211,987	$	-	$	211,987
Special mention		-		-		-		-		25,072		25,072		-		25,072
Substandard		351		-		-		351		7,017		7,368		17,034		24,402
		868		750		-		1,618		242,809		244,427		17,034		261,461
Residential Real Estate:
Pass	$	592	$	-	$	-		592	$	139,059		139,651		-		139,651
Special mention		-		-		-		-		3,832		3,832		-		3,832
Substandard		-		-		-		-		-		-		4,464		4,464
		592		-		-		592		142,891		143,483		4,464		147,947
Commercial and Industrial:
Pass	$	16	$	3,000	$	-		3,016	$	94,467		97,483		-		97,483
Special mention		123		-		-		123		8,226		8,349		-		8,349
Substandard		2,077		-		-		2,077		28,525		30,602		2,532		33,134
		2,216		3,000		-		5,216		131,218		136,434		2,532		138,966
Consumer and Other:
Pass	$	2	$	5	$	-		7	$	55,801		55,808		-		55,808
Substandard		-		-		-		-		120		120		557		677
		2		5		-		7		55,921		55,928		557		56,485
Construction:
Pass	$	866	$	-	$	-		866	$	54,657		55,523		-		55,523
		866		-		-		866		54,657		55,523		-		55,523
Construction to Permanent - CRE:
Pass	$	-	$	724	$	-		724	$	15,570		16,294		-		16,294
		-		724		-		724		15,570		16,294		-		16,294
Total	$	4,544	$	4,479	$	-	$	9,023	$	643,066	$	652,089	$	24,587	$	676,676
Loans receivable, gross:
Pass	$	1,993	$	4,479	$	-	$	6,472	$	570,274	$	576,746	$	-	$	576,746
Special mention		123		-		-		123		37,130		37,253		-		37,253
Substandard		2,428		-		-		2,428		35,662		38,090		24,587		62,677
Loans receivable, gross	$	4,544	$	4,479	$	-	$	9,023	$	643,066	$	652,089	$	24,587	$	676,676

(In thousands)	Performing (Accruing) Loans
As of December 31, 2020:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non-accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	-	$	-	$	-	$	-	$	230,824	$	230,824	$	-	$	230,824
Special mention		-		-		-		-		25,658		25,658		-		25,658
Substandard		354		-		9		363		10,999		11,362		14,534		25,896
		354		-		9		363		267,481		267,844		14,534		282,378
Residential Real Estate:
Pass		478		361		-		839		145,298		146,137		-		146,137
Special mention		-		-		-		-		3,860		3,860		-		3,860
Substandard		-		-		-		-		-		-		3,854		3,854
		478		361		-		839		149,158		149,997		3,854		153,851
Commercial and Industrial:
Pass		-		209		-		209		102,131		102,340		-		102,340
Special mention		-		4,000		-		4,000		8,881		12,881		-		12,881
Substandard		603		113		-		716		27,660		28,376		700		29,076
		603		4,322		-		4,925		138,672		143,597		700		144,297
Consumer and Other:
Pass		1		-		7		8		66,589		66,597		-		66,597
Substandard		-		-		-		-		121		121		917		1,038
		1		-		7		8		66,710		66,718		917		67,635
Construction:
Pass		-		2,351		-		2,351		64,633		66,984		-		66,984
		-		2,351		-		2,351		64,633		66,984		-		66,984
Construction to Permanent - CRE:
Pass		-		-		-		-		15,035		15,035		-		15,035
		-		-		-		-		15,035		15,035		-		15,035
Total	$	1,436	$	7,034	$	16	$	8,486	$	701,689	$	710,175	$	20,005	$	730,180
Loans receivable, gross:
Pass	$	479	$	2,921	$	7	$	3,407	$	624,510	$	627,917	$	-	$	627,917
Special mention		-		4,000		-		4,000		38,399		42,399		-		42,399
Substandard		957		113		9		1,079		38,780		39,859		20,005		59,864
Loans receivable, gross	$	1,436	$	7,034	$	16	$	8,486	$	701,689	$	710,175	$	20,005	$	730,180

Financing Receivable, Nonaccrual [Table Text Block]

(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of March 31, 2021:
Loan portfolio segment:
Commercial Real Estate:
Substandard	$	-	$	-	$	4,658	$	4,658	$	12,376	$	17,034
Residential Real Estate:
Substandard		-		23		2,122		2,145		2,319		4,464
Commercial and Industrial:
Substandard		1,786		63		683		2,532		-		2,532
Consumer and Other:
Substandard		-		-		30		30		527		557
Total non-accruing loans	$	1,786	$	86	$	7,493	$	9,365	$	15,222	$	24,587
As of December 31, 2020:
Loan portfolio segment:
Commercial Real Estate:
Substandard	$	-	$	-	$	5,723	$	5,723	$	8,811	$	14,534
Residential Real Estate:
Substandard		-		-		2,884		2,884		970		3,854
Commercial and Industrial:
Substandard		-		-		700		700		-		700
Consumer and Other:
Substandard		22		-		91		113		804		917
Total non-accruing loans	$	22	$	-	$	9,398	$	9,420	$	10,585	$	20,005

Financing Receivable, Troubled Debt Restructuring [Table Text Block]

(In thousands)	March 31, 2021					December 31, 2020
	Number of Loans		Recorded Investment			Number of Loans		Recorded Investment
Loan portfolio segment:
Commercial Real Estate		1	$	8,811			2	$	9,884
Residential Real Estate		3		912			3		928
Commercial and Industrial		1		4,000			1		4,000
Consumer and Other		4		774			5		1,074
Total TDR Loans		9		14,497			11		15,886
Less:
TDRs included in non-accrual loans		4		(10,120	)		6		(11,508	)
Total accrual TDR Loans		5	$	4,377			5	$	4,378

Impaired Financing Receivables [Table Text Block]

(In thousands)	March 31, 2021						December 31, 2020
	Recorded Investment		Principal Outstanding		Related Allowance		Recorded Investment		Principal Outstanding		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	8,214	$	9,135	$	-	$	5,723	$	6,644	$	-
Residential Real Estate		4,138		4,212		-		3,853		3,900		-
Commercial and Industrial		4,684		4,803		-		4,700		4,816		-
Consumer and Other		653		678		-		1,177		1,332		-
		17,689		18,828		-		15,453		16,692		-
With a related allowance recorded:
Commercial Real Estate	$	8,820	$	8,820	$	1,415		8,811		8,811		1,398
Residential Real Estate		435		452		8		109		109		4
Commercial and Industrial		1,848		2,063		501		-		-		-
Consumer and Other		172		204		2		10		10		10
		11,275		11,539		1,926		8,930		8,930		1,412
Impaired Loans, Total:
Commercial Real Estate		17,034		17,955		1,415		14,534		15,455		1,398
Residential Real Estate		4,573		4,664		8		3,962		4,009		4
Commercial and Industrial		6,532		6,866		501		4,700		4,816		-
Consumer and Other		825		882		2		1,187		1,342		10
Impaired Loans, Total	$	28,964	$	30,367	$	1,926	$	24,383	$	25,622	$	1,412

	Three Months Ended March 31,
(In thousands)	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	6,078	$	-	$	3,467	$	-
Residential Real Estate		4,248		13		3,578		20
Commercial and Industrial		2,745		46		2,082		1
Consumer and Other		945		6		851		8
		14,016		65		9,978		29
With a related allowance recorded:
Commercial Real Estate		8,813		-		8,808		1
Residential Real Estate		190		3		28		2
Commercial and Industrial		462		26		-		-
Consumer and Other		47		2		51		1
		9,512		31		8,887		4
Impaired Loans, Total:
Commercial Real Estate		14,891		-		12,275		1
Residential Real Estate		4,438		16		3,606		22
Commercial and Industrial		3,207		72		2,082		1
Consumer and Other		992		8		902		9
Construction		-		-		-		-
Impaired Loans, Total	$	23,528	$	96	$	18,865	$	33

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Note 5 - Loans Held for Sale (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Servicing Asset at Amortized Cost [Table Text Block]

(In thousands)	Three Months Ended March 31,
	2021			2020
Beginning balance	$	316		$	201
Servicing rights capitalized		17			2
Servicing rights amortized		(6	)		(5	)
Ending balance	$	327		$	198

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Note 7 - Deposits (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Deposit Liabilities, Type [Table Text Block]

(In thousands)	March 31,		December 31,
	2021		2020
Non-interest bearing	$	173,520	$	158,676
Interest bearing:
NOW		34,433		30,529
Savings		103,025		98,635
Money market		131,844		146,389
Certificates of deposit, less than $250,000		165,130		160,968
Certificates of deposit, $250,000 or greater		66,470		49,172
Brokered deposits		18,456		41,287
Interest bearing, Total		519,358		526,980
Total Deposits	$	692,878	$	685,656

Contractual Obligation, Fiscal Year Maturity [Table Text Block]

(In thousands)	CDs less than $250,000		CDs $250,000 or greater		Brokered Deposits		Total
1 year or less	$	146,767	$	45,491	$	16,957	$	209,215
More than 1 year through 2 years		14,345		19,978		1,000		35,323
More than 2 years through 3 years		2,667		751		-		3,418
More than 3 years through 4 years		1,074		250		499		1,823
More than 4 years through 5 years		277		-		-		277
	$	165,130	$	66,470	$	18,456	$	250,056

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Note 8 - Derivatives (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Derivative Instruments [Table Text Block]

(In thousands)	Notional Amount		Maturity (Years)		Fixed Rate			Variable Rate	Fair Value
March 31, 2021
Classified in Other Assets:
Customer interest rate swap	$	4,911		8.1		5.25	%	1 Mo. LIBOR + 1.96%	$	687
Customer interest rate swap		1,422		8.3		4.38	%	1 Mo. LIBOR + 2.00%		104
Classified in Other Liabilities:
3rd party interest rate swap	$	4,911		8.1		5.25	%	1 Mo. LIBOR + 1.96%	$	(687	)
3rd party interest rate swap		1,422		8.3		4.38	%	1 Mo. LIBOR + 2.00%		(104	)
December 31, 2020
Classified in Other Assets:
Customer interest rate swap	$	4,911		8.3		5.25	%	1 Mo. LIBOR + 1.96%	$	997
Customer interest rate swap		1,431		8.5		4.38	%	1 Mo. LIBOR + 2.00%		190
Classified in Other Liabilities:
3rd party interest rate swap	$	4,911		8.3		5.25	%	1 Mo. LIBOR + 1.96%	$	(997	)
3rd party interest rate swap		1,431		8.5		4.38	%	1 Mo. LIBOR + 2.00%		(190	)

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Note 9 - Share-based Compensation and Employee Benefit Plan (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

Three months ended March 31, 2021:	Number of Shares Awarded			Weighted Average Grant Date Fair Value
Unvested at December 31, 2020		18,498		$	7.29
Vested		(700	)	$	17.85
Unvested at March 31, 2021		17,798		$	6.88
Three months ended March 31, 2020:
Unvested at December 31, 2019		21,470		$	12.91
Vested		(2,172	)	$	14.56
Unvested at March 31, 2020		19,298		$	12.73

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Note 10 - Earnings (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

(Net income (loss) in thousands)	Three Months Ended March 31,
	2021		2020
Basis earnings (loss) per share:
Net income (loss) attributable to Common shareholders	$	854	$	(1,072	)
Divided by:
Weighted average shares outstanding		3,943,580		3,931,388
Basic earnings (loss) per common share	$	0.22	$	(0.27	)
Diluted earnings (loss) per share:
Net income (loss) attributable to Common shareholders	$	854	$	(1,072	)
Weighted average shares outstanding		3,943,580		3,931,388
Effect of potentially dilutive restricted common shares		1,540		-	(1)
Divided by:
Weighted average diluted shares outstanding		3,945,120		3,931,388
Diluted earnings (loss) per common share	$	0.22	$	(0.27	)

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Note 11 - Financial Instruments With Off-balance Sheet Risk (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Commitment to Extended Credit [Table Text Block]

	March 31,		December 31,
(In thousands)	2021		2020
Commitments to extend credit:
Unused lines of credit	$	62,473	$	61,622
Undisbursed construction loans		19,302		25,232
Home equity lines of credit		18,779		19,240
Future loan commitments		27,645		15,696
Financial standby letters of credit		564		604
	$	128,763	$	122,394

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Note 12 - Regulatory and Operational Matters (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

(In thousands)	Patriot National Bancorp, Inc.								Patriot Bank, N.A.
	March 31, 2021				December 31, 2020				March 31, 2021				December 31, 2020
	Amount ($)		Ratio (%)		Amount ($)		Ratio (%)		Amount ($)		Ratio (%)		Amount ($)		Ratio (%)
Total Capital (to risk weighted assets):
Actual	$	88,039		11.804	$	87,428		11.132	$	98,538		13.317	$	97,608		12.510
To be Well Capitalized (1)		-		-		-		-		73,994		10.000		78,026		10.000
For capital adequacy with Capital Buffer (2)		-		-		-		-		77,693		10.500		81,927		10.500
For capital adequacy		59,665		8.000		62,827		8.000		59,195		8.000		62,421		8.000
Tier 1 Capital (to risk weighted assets):
Actual		68,703		9.212		67,602		8.608		89,274		12.065		87,844		11.258
To be Well Capitalized (1)		-		-		-		-		59,195		8.000		62,421		8.000
For capital adequacy with Capital Buffer (2)		-		-		-		-		62,895		8.500		66,322		8.500
For capital adequacy		44,749		6.000		47,120		6.000		44,396		6.000		46,815		6.000
Common Equity Tier 1 Capital (to risk weighted assets):
Actual		60,703		8.139		59,602		7.589		89,274		12.065		87,844		11.258
To be Well Capitalized (1)		-		-		-		-		48,096		6.500		50,717		6.500
For capital adequacy with Capital Buffer (2)		-		-		-		-		51,796		7.000		54,618		7.000
For capital adequacy		33,562		4.500		35,340		4.500		33,297		4.500		35,112		4.500
Tier 1 Leverage Capital (to average assets):
Actual		68,703		7.791		67,602		7.539		89,274		10.122		87,844		9.794
To be Well Capitalized (1)		-		-		-		-		79,378		9.000		80,721		9.000
For capital adequacy		35,272		4.000		35,868		4.000		35,279		4.000		35,876		4.000

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Note 13 - Fair Value and Interest Rate Risk (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Fair Value, by Balance Sheet Grouping [Table Text Block]

(In thousands)		March 31, 2021				December 31, 2020
	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	$	2,593	$	2,593	$	3,006	$	3,006
Interest-bearing deposits due from banks	Level 1		81,681		81,681		31,630		31,630
Available-for-sale securities	Level 2		57,893		57,893		49,262		49,262
Other investments	Level 2		4,450		4,450		4,450		4,450
Federal Reserve Bank stock	Level 2		2,744		2,744		2,783		2,783
Federal Home Loan Bank stock	Level 2		4,503		4,503		4,503		4,503
Loans receivable, net	Level 3		666,250		663,233		719,596		716,822
Loans held for sale	Level 2		2,829		3,008		1,217		1,343
SBA servicing assets	Level 3		327		391		316		375
Other real estate owned	Level 2		1,216		1,216		1,906		1,906
Accrued interest receivable	Level 2		6,270		6,270		6,620		6,620
Interest rate swap receivable	Level 2		791		791		1,187		1,187
Financial assets, total		$	831,547	$	828,773	$	826,476	$	823,887
Financial Liabilities:
Demand deposits	Level 2	$	173,520	$	173,520	$	158,676	$	158,676
Savings deposits	Level 2		103,025		103,025		98,635		98,635
Money market deposits	Level 2		131,844		131,844		146,389		146,389
NOW accounts	Level 2		34,433		34,433		30,529		30,529
Time deposits	Level 2		231,600		232,326		210,140		210,882
Brokered deposits	Level 1		18,456		18,675		41,287		41,643
FHLB borrowings	Level 2		90,000		96,322		90,000		97,293
Senior notes	Level 2		11,946		12,022		11,927		12,028
Subordinated debt	Level 2		9,789		10,072		9,782		10,125
Junior subordinated debt owed to unconsolidated trust	Level 2		8,112		8,112		8,110		8,110
Note payable	Level 3		943		916		994		997
Accrued interest payable	Level 2		693		693		572		572
Interest rate swap liability	Level 2		791		791		1,187		1,187
Financial liabilities, total		$	815,152	$	822,751	$	808,228	$	817,066

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

(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, 2021:
U. S. Government agency mortgage-backed securities	$	-	$	22,687	$	-	$	22,687
Corporate bonds		-		17,333		-		17,333
Subordinated notes		-		9,149		-		9,149
SBA loan pools		-		8,165		-		8,165
Municipal bonds		-		559		-		559
Available-for-sale securities	$	-	$	57,893	$	-	$	57,893
Interest rate swap receivable	$	-	$	791	$	-	$	791
Interest rate swap liability	$	-	$	791	$	-	$	791
December 31, 2020:
U. S. Government agency mortgage-backed securities	$	-	$	16,833	$	-	$	16,833
Corporate bonds		-		17,290		-		17,290
Subordinated notes		-		9,005		-		9,005
SBA loan pools		-		5,567		-		5,567
Municipal bonds		-		567		-		567
Available-for-sale securities	$	-	$	49,262	$	-	$	49,262
Interest rate swap receivable	$	-	$	1,187	$	-	$	1,187
Interest rate swap liability	$	-	$	1,187	$	-	$	1,187

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

(In thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
March 31, 2021:
Impaired loans, net	$	26,538	Real Estate Appraisals	Discount for appraisal type	5.8%	-	20%
Other Real Estate Owned		1,216	Real Estate Appraisals	Discount for appraisal type		5.84%
SBA servicing assets		391	Discounted Cash Flows	Market discount rates	14.73%	-	14.90%
December 31, 2020:
Impaired loans, net	$	22,971	Real Estate Appraisals	Discount for appraisal type	5.8%	-	20%
Other Real Estate Owned		1,906	Real Estate Appraisals	Discount for appraisal type		5.84%
SBA servicing assets		375	Discounted Cash Flows	Market discount rates	14.73%	-	14.90%

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Note 2 - Accounting Policies (Details Textual)	3 Months Ended
	Mar. 31, 2021 USD ($)
Employee Retention Tax Credit Per Employee	$ 843,000

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Note 3 - Available-for-sale Securities (Details Textual) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions	26		22
Number of Available-for-sale Securities	41		37
Unrealized Holding Losses Depreciation Percentage from Amortized Cost	3.60%		4.00%
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities, Total	$ 0
Other-than-temporary Impairment Loss, Debt Securities, Available-for-sale, Total	0
Payments to Acquire Debt Securities, Available-for-sale		$ 0
Proceeds from Sale of Debt Securities, Available-for-sale	0	$ 0
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Payments to Acquire Debt Securities, Available-for-sale	10,900
SBA Loan Pools [Member]
Payments to Acquire Debt Securities, Available-for-sale	3,000
Available-For-Sale Securities Pledged to Secure Municipal Deposits [Member]
Debt Securities, Available-for-sale, Restricted	$ 5,600		$ 6,100

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Note 3 - Available-for-sale Securities - Investment Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available-for-sale securities, amortized cost	$ 58,820	$ 49,960
Available-for-sale securities, gross unrealized gains	496	491
Available-for-sale securities, gross unrealized losses	(1,423)	(1,189)
Available-for-sale securities	57,893	49,262
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities, amortized cost	22,867	16,719
Available-for-sale securities, gross unrealized gains	109	131
Available-for-sale securities, gross unrealized losses	(289)	(17)
Available-for-sale securities	22,687	16,833
Corporate Debt Securities [Member]
Available-for-sale securities, amortized cost	18,013	18,014
Available-for-sale securities, gross unrealized gains	272	260
Available-for-sale securities, gross unrealized losses	(952)	(984)
Available-for-sale securities	17,333	17,290
Subordinated Notes [Member]
Available-for-sale securities, amortized cost	9,040	9,036
Available-for-sale securities, gross unrealized gains	115	97
Available-for-sale securities, gross unrealized losses	(6)	(128)
Available-for-sale securities	9,149	9,005
SBA Loan Pools [Member]
Available-for-sale securities, amortized cost	8,336	5,627
Available-for-sale securities, gross unrealized gains
Available-for-sale securities, gross unrealized losses	(171)	(60)
Available-for-sale securities	8,165	5,567
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities, amortized cost	564	564
Available-for-sale securities, gross unrealized gains		3
Available-for-sale securities, gross unrealized losses	(5)
Available-for-sale securities	$ 559	$ 567

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Note 3 - Available-for-sale Securities - Investment Securities in a Continuous Loss Position (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available-for-sale securities in continuous loss position, less than 12 months, fair value	$ 19,915	$ 9,208
Available-for-sale securities in continuous loss position, less than 12 months, unrealized loss	(421)	(148)
Available-for-sale securities in continuous loss position, 12 months or more, fair value	17,935	19,628
Available-for-sale securities in continuous loss position, 12 months or more, unrealized loss	(1,002)	(1,041)
Available-for-sale securities in continuous loss position, fair value	37,850	28,836
Available-for-sale securities in continuous loss position, unrealized loss	(1,423)	(1,189)
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities in continuous loss position, less than 12 months, fair value	14,055	5,797
Available-for-sale securities in continuous loss position, less than 12 months, unrealized loss	(288)	(14)
Available-for-sale securities in continuous loss position, 12 months or more, fair value	77	1,476
Available-for-sale securities in continuous loss position, 12 months or more, unrealized loss	(1)	(3)
Available-for-sale securities in continuous loss position, fair value	14,132	7,273
Available-for-sale securities in continuous loss position, unrealized loss	(289)	(17)
Corporate Debt Securities [Member]
Available-for-sale securities in continuous loss position, less than 12 months, fair value
Available-for-sale securities in continuous loss position, less than 12 months, unrealized loss
Available-for-sale securities in continuous loss position, 12 months or more, fair value	13,047	13,015
Available-for-sale securities in continuous loss position, 12 months or more, unrealized loss	(952)	(984)
Available-for-sale securities in continuous loss position, fair value	13,047	13,015
Available-for-sale securities in continuous loss position, unrealized loss	(952)	(984)
Subordinated Notes [Member]
Available-for-sale securities in continuous loss position, less than 12 months, fair value	999	1,878
Available-for-sale securities in continuous loss position, less than 12 months, unrealized loss	(1)	(122)
Available-for-sale securities in continuous loss position, 12 months or more, fair value	1,104	1,103
Available-for-sale securities in continuous loss position, 12 months or more, unrealized loss	(5)	(6)
Available-for-sale securities in continuous loss position, fair value	2,103	2,981
Available-for-sale securities in continuous loss position, unrealized loss	(6)	(128)
SBA Loan Pools [Member]
Available-for-sale securities in continuous loss position, less than 12 months, fair value	4,458	1,533
Available-for-sale securities in continuous loss position, less than 12 months, unrealized loss	(127)	(12)
Available-for-sale securities in continuous loss position, 12 months or more, fair value	3,707	4,034
Available-for-sale securities in continuous loss position, 12 months or more, unrealized loss	(44)	(48)
Available-for-sale securities in continuous loss position, fair value	8,165	5,567
Available-for-sale securities in continuous loss position, unrealized loss	(171)	$ (60)
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities in continuous loss position, less than 12 months, fair value	403
Available-for-sale securities in continuous loss position, less than 12 months, unrealized loss	(5)
Available-for-sale securities in continuous loss position, 12 months or more, fair value
Available-for-sale securities in continuous loss position, 12 months or more, unrealized loss
Available-for-sale securities in continuous loss position, fair value	403
Available-for-sale securities in continuous loss position, unrealized loss	$ (5)

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Note 3 - Available-for-sale Securities - Investment Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Amortized cost, due within 5 years	$ 8,783	$ 11,299
Amortized cost, due after 5 years through 10 years	26,415	26,772
Amortized cost, due after 10 years	23,622	11,889
Available-for-sale securities, amortized cost	58,820	49,960
Fair value, due within 5 years	9,039	11,539
Fair value, due after 5 years through 10 years	25,547	25,744
Fair value, due after 10 years	23,307	11,979
Fair value, total	57,893	49,262
Corporate Debt Securities [Member]
Amortized cost, due within 5 years	4,013	4,014
Amortized cost, due after 5 years through 10 years	14,000	14,000
Amortized cost, due after 10 years
Available-for-sale securities, amortized cost	18,013	18,014
Fair value, due within 5 years	4,285	4,274
Fair value, due after 5 years through 10 years	13,048	13,016
Fair value, due after 10 years
Fair value, total	17,333	17,290
Subordinated Notes [Member]
Amortized cost, due within 5 years	2,000	2,000
Amortized cost, due after 5 years through 10 years	7,040	7,036
Amortized cost, due after 10 years
Available-for-sale securities, amortized cost	9,040	9,036
Fair value, due within 5 years	2,003	2,003
Fair value, due after 5 years through 10 years	7,146	7,002
Fair value, due after 10 years
Fair value, total	9,149	9,005
SBA Loan Pools [Member]
Amortized cost, due within 5 years	1,735	1,921
Amortized cost, due after 5 years through 10 years	3,468	3,706
Amortized cost, due after 10 years	3,133
Available-for-sale securities, amortized cost	8,336	5,627
Fair value, due within 5 years	1,715	1,899
Fair value, due after 5 years through 10 years	3,427	3,668
Fair value, due after 10 years	3,023
Fair value, total	8,165	5,567
US States and Political Subdivisions Debt Securities [Member]
Amortized cost, due within 5 years
Amortized cost, due after 5 years through 10 years	564	564
Amortized cost, due after 10 years
Available-for-sale securities, amortized cost	564	564
Fair value, due within 5 years
Fair value, due after 5 years through 10 years	559	567
Fair value, due after 10 years
Fair value, total	559	567
Available-for-sale Securities with Single Maturity Dates [Member]
Amortized cost, due within 5 years	7,748	7,935
Amortized cost, due after 5 years through 10 years	25,072	25,306
Amortized cost, due after 10 years	3,133
Available-for-sale securities, amortized cost	35,953	33,241
Fair value, due within 5 years	8,003	8,176
Fair value, due after 5 years through 10 years	24,180	24,253
Fair value, due after 10 years	3,023
Fair value, total	35,206	32,429
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Amortized cost, due within 5 years	1,035	3,364
Amortized cost, due after 5 years through 10 years	1,343	1,466
Amortized cost, due after 10 years	20,489	11,889
Available-for-sale securities, amortized cost	22,867	16,719
Fair value, due within 5 years	1,036	3,363
Fair value, due after 5 years through 10 years	1,367	1,491
Fair value, due after 10 years	20,284	11,979
Fair value, total	$ 22,687	$ 16,833

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Note 4 - Loan Receivables and Allowance for Loan and Lease Losses (Details Textual)	3 Months Ended		12 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)
Payments to Acquire Loans Receivable	$ 16,041,000	$ 19,025,000
Maximum Period of Credit Extension of Construction Loans (Month)	1 year 180 days
Loans Receivable, Term to Reset to FHLB Rate (Year)	5 years
Period for Charged Off of Open-End Credits (Day)	180 days
Period for Charged Off of Close-End Credits (Day)	120 days
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	$ 255,000	$ 191,000
Maximum Period for Charged Off of Consumer Installment Loans (Day)			180 days
Financing Receivable, Modifications, Number of Contracts	0	0
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts	0	0
Financing Receivable, Troubled Debt Restructuring, Commitment to Lend	$ 0		$ 0
Financing Receivable, Principal and Interest Deferred Payments	232,700,000
Financing Receivable, Loans Remaining on Deferment	$ 37,700,000
Number of Impaired Loans	33		26
Impaired Financing Receivable, Recorded Investment, Total	$ 29,000,000		$ 24,400,000
Impaired Financing Receivable, Related Allowance	$ 1,900,000		$ 1,400,000
Number of Impaired Loans, Individually Evaluated for Impairment	23
Number of Impaired Loans, Collectively Evaluated for Impairment	10
Impaired Financing Receivable, Non-Performing Loans, Discount to Appraisal Value, Percent	8.00%		5.80%
SBA Loans [Member]
Percentage of Principal Balance Guaranteed	75.00%
Transfer of Loans Held-for-sale to Portfolio Loans	$ 281,000	$ 280,000
SBA CARES Act Paycheck Protection Program [Member]
Loans and Leases Receivable, Net Amount, Total	2,700,000
Syndicated and Leveraged Loans [Member]
Loans and Leases Receivable, Net Amount, Total	44,800,000		$ 55,000,000
Non-Accrual Loans [Member]
Impaired Financing Receivable, Interest Income, Cash Basis Method, Total	$ 48,000	28,000
Commercial Real Estate Portfolio Segment [Member]
Maximum Percentage of Credit Extension Based on Market Value of Collateral	75.00%
Multi-family Real Estate [Member]
Maximum Percentage of Credit Extension Based on Market Value of Collateral	80.00%
Construction Portfolio Segment [Member]
Percentage of Maximum Loan to Value	75.00%
Residential Portfolio Segment [Member]
Payments to Acquire Loans Receivable	$ 16,000,000	4,100,000
Consumer Portfolio Segment [Member] | Education Loans [Member]
Payments to Acquire Loans Receivable	$ 0	$ 14,900,000
Construction to Permanent Portfolio Segment [Member] | Minimum [Member]
Loans Receivable, Term (Year)	20 years
Construction to Permanent Portfolio Segment [Member] | Maximum [Member]
Loans Receivable, Term (Year)	25 years
Commercial and Industrial Loans [Member]
Loans and Leases Receivable, Net Amount, Total	$ 22,100,000		$ 21,600,000

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Note 4 - Loan Receivables and Allowance for Loan and Lease Losses - Loan Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Loans receivable, gross	$ 676,676	$ 730,180
Allowance for loan and lease losses	(10,426)	(10,584)	$ (10,916)	$ (10,115)
Loans receivable, net	666,250	719,596
Commercial Real Estate Portfolio Segment [Member]
Loans receivable, gross	261,461	282,378
Allowance for loan and lease losses	(4,154)	(4,485)	(4,150)	(3,789)
Residential Portfolio Segment [Member]
Loans receivable, gross	147,947	153,851
Allowance for loan and lease losses	(1,909)	(1,379)	(1,120)	(1,038)
Commercial Portfolio Segment [Member]
Loans receivable, gross	138,966	144,297
Allowance for loan and lease losses	(3,624)	(3,284)	(4,390)	(4,340)
Consumer Portfolio Segment [Member]
Loans receivable, gross	56,485	67,635
Allowance for loan and lease losses	(382)	(295)	(534)	(341)
Construction Portfolio Segment [Member]
Loans receivable, gross	55,523	66,984
Allowance for loan and lease losses	(280)	(739)	(603)	(477)
Construction to Permanent Portfolio Segment [Member]
Loans receivable, gross	16,294	15,035
Allowance for loan and lease losses	$ (77)	$ (162)	$ (119)	$ (130)

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Note 4 - Loan Receivables and Allowance for Loan and Lease Losses - Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Dec. 31, 2020
Balance	$ 10,584	$ 10,115
Charge-offs	(272)	(44)
Recoveries	114	41
Provisions (credits)		804
Balance	10,426	10,916
Total allowance for loan and lease losses	10,584	10,916	$ 10,426	$ 10,584
Total loans receivable, gross			676,676	730,180
Business Activities Loans [Member]
Balance	10,584
Balance	10,426
Allowance for loan losses: Individually evaluated for impairment			1,919	1,412
Allowance for loan losses: Collectively evaluated for impairment			8,507	9,172
Total allowance for loan and lease losses	10,584		10,426	10,584
Loans receivable, gross: Individually evaluated for impairment			28,457	24,383
Loans receivable, gross: Collectively evaluated for impairment			648,219	705,797
Total loans receivable, gross			676,676	730,180
Commercial Real Estate Portfolio Segment [Member]
Balance	4,485	3,789
Charge-offs	(42)	0
Recoveries
Provisions (credits)	(289)	361
Balance	4,154	4,150
Total allowance for loan and lease losses	4,154	4,150	4,154	4,485
Total loans receivable, gross			261,461	282,378
Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Balance	4,485
Balance	4,154
Allowance for loan losses: Individually evaluated for impairment			1,414	1,398
Allowance for loan losses: Collectively evaluated for impairment			2,740	3,087
Total allowance for loan and lease losses	4,485		4,154	4,485
Loans receivable, gross: Individually evaluated for impairment			17,025	14,534
Loans receivable, gross: Collectively evaluated for impairment			244,436	267,844
Total loans receivable, gross			261,461	282,378
Residential Portfolio Segment [Member]
Balance	1,379	1,038
Charge-offs	(3)	(1)
Recoveries
Provisions (credits)	533	83
Balance	1,909	1,120
Total allowance for loan and lease losses	1,909	1,120	1,909	1,379
Total loans receivable, gross			147,947	153,851
Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Balance	1,379
Balance	1,909
Allowance for loan losses: Individually evaluated for impairment			4	4
Allowance for loan losses: Collectively evaluated for impairment			1,905	1,375
Total allowance for loan and lease losses	1,379		1,909	1,379
Loans receivable, gross: Individually evaluated for impairment			4,247	3,962
Loans receivable, gross: Collectively evaluated for impairment			143,700	149,889
Total loans receivable, gross			147,947	153,851
Commercial Portfolio Segment [Member]
Balance	3,284	4,340
Charge-offs	(209)	(4)
Recoveries	12	40
Provisions (credits)	537	14
Balance	3,624	4,390
Total allowance for loan and lease losses	3,624	4,390	3,624	3,284
Total loans receivable, gross			138,966	144,297
Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Balance	3,284
Balance	3,624
Allowance for loan losses: Individually evaluated for impairment			501
Allowance for loan losses: Collectively evaluated for impairment			3,123	3,284
Total allowance for loan and lease losses	3,284		3,624	3,284
Loans receivable, gross: Individually evaluated for impairment			6,532	4,700
Loans receivable, gross: Collectively evaluated for impairment			132,434	139,597
Total loans receivable, gross			138,966	144,297
Consumer Portfolio Segment [Member]
Balance	295	341
Charge-offs	(18)	(39)
Recoveries	102	1
Provisions (credits)	3	231
Balance	382	534
Total allowance for loan and lease losses	382	534	382	295
Total loans receivable, gross			56,485	67,635
Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Balance	295
Balance	382
Allowance for loan losses: Individually evaluated for impairment				10
Allowance for loan losses: Collectively evaluated for impairment			382	285
Total allowance for loan and lease losses	295		382	295
Loans receivable, gross: Individually evaluated for impairment			653	1,187
Loans receivable, gross: Collectively evaluated for impairment			55,832	66,448
Total loans receivable, gross			56,485	67,635
Construction Portfolio Segment [Member]
Balance	739	477
Charge-offs	0	0
Recoveries	0	0
Provisions (credits)	(459)	126
Balance	280	603
Total allowance for loan and lease losses	280	603	280	739
Total loans receivable, gross			55,523	66,984
Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Balance	739
Balance	280
Allowance for loan losses: Individually evaluated for impairment			0	0
Allowance for loan losses: Collectively evaluated for impairment			280	739
Total allowance for loan and lease losses	739		280	739
Loans receivable, gross: Individually evaluated for impairment
Loans receivable, gross: Collectively evaluated for impairment			55,523	66,984
Total loans receivable, gross			55,523	66,984
Construction to Permanent Portfolio Segment [Member]
Balance	162	130
Charge-offs	0	0
Recoveries	0	0
Provisions (credits)	(85)	(11)
Balance	77	119
Total allowance for loan and lease losses	77	119	77	162
Total loans receivable, gross			16,294	15,035
Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Balance	162
Balance	77
Allowance for loan losses: Individually evaluated for impairment			0	0
Allowance for loan losses: Collectively evaluated for impairment			77	162
Total allowance for loan and lease losses	162		77	162
Loans receivable, gross: Individually evaluated for impairment			0	0
Loans receivable, gross: Collectively evaluated for impairment			16,294	15,035
Total loans receivable, gross			16,294	15,035
Unallocated Financing Receivables [Member]
Balance	240
Charge-offs	0	0
Recoveries	0	0
Provisions (credits)	(240)
Balance
Total allowance for loan and lease losses				240
Unallocated Financing Receivables [Member] | Business Activities Loans [Member]
Balance	240
Balance
Allowance for loan losses: Individually evaluated for impairment			0	0
Allowance for loan losses: Collectively evaluated for impairment				240
Total allowance for loan and lease losses	$ 240			240
Loans receivable, gross: Individually evaluated for impairment			0	0
Loans receivable, gross: Collectively evaluated for impairment
Total loans receivable, gross

XML

Note 4 - Loan Receivables and Allowance for Loan and Lease Losses - Delinquency Status of Performing and Non-performing Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Loans receivable, gross	$ 676,676	$ 730,180
Business Activities Loans [Member]
Loans receivable, gross	676,676	730,180
Non-accruing loans	24,587	20,005
Commercial Real Estate Portfolio Segment [Member]
Loans receivable, gross	261,461	282,378
Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	261,461	282,378
Non-accruing loans	17,034	14,534
Residential Portfolio Segment [Member]
Loans receivable, gross	147,947	153,851
Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	147,947	153,851
Non-accruing loans	4,464	3,854
Commercial Portfolio Segment [Member]
Loans receivable, gross	138,966	144,297
Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	138,966	144,297
Non-accruing loans	2,532	700
Consumer Portfolio Segment [Member]
Loans receivable, gross	56,485	67,635
Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	56,485	67,635
Non-accruing loans	557	917
Construction Portfolio Segment [Member]
Loans receivable, gross	55,523	66,984
Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	55,523	66,984
Non-accruing loans
Construction to Permanent Portfolio Segment [Member]
Loans receivable, gross	16,294	15,035
Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	16,294	15,035
Non-accruing loans
Pass [Member] | Business Activities Loans [Member]
Loans receivable, gross	576,746	627,917
Non-accruing loans
Pass [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	211,987	230,824
Non-accruing loans
Pass [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	139,651	146,137
Non-accruing loans
Pass [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	97,483	102,340
Non-accruing loans
Pass [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	55,808	66,597
Non-accruing loans
Pass [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	55,523	66,984
Non-accruing loans
Pass [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	16,294	15,035
Non-accruing loans
Special Mention [Member] | Business Activities Loans [Member]
Loans receivable, gross	37,253	42,399
Non-accruing loans
Special Mention [Member] | Commercial and Industrial Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	25,072	25,658
Non-accruing loans
Special Mention [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	3,832	3,860
Non-accruing loans
Special Mention [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	8,349	12,881
Non-accruing loans
Substandard [Member] | Business Activities Loans [Member]
Loans receivable, gross	62,677	59,864
Non-accruing loans	24,587	20,005
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	24,402	25,896
Non-accruing loans	17,034	14,534
Substandard [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	4,464	3,854
Non-accruing loans	4,464	3,854
Substandard [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	33,134	29,076
Non-accruing loans	2,532	700
Substandard [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Loans receivable, gross	677	1,038
Non-accruing loans	557	917
Performing Financial Instruments [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	9,023	8,486
Performing (accruing) loans, current	643,066	701,689
Loans receivable, gross	652,089	710,175
Performing Financial Instruments [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	1,618	363
Performing (accruing) loans, current	242,809	267,481
Loans receivable, gross	244,427	267,844
Performing Financial Instruments [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	592	839
Performing (accruing) loans, current	142,891	149,158
Loans receivable, gross	143,483	149,997
Performing Financial Instruments [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	5,216	4,925
Performing (accruing) loans, current	131,218	138,672
Loans receivable, gross	136,434	143,597
Performing Financial Instruments [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	7	8
Performing (accruing) loans, current	55,921	66,710
Loans receivable, gross	55,928	66,718
Performing Financial Instruments [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	866	2,351
Performing (accruing) loans, current	54,657	64,633
Loans receivable, gross	55,523	66,984
Performing Financial Instruments [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	724
Performing (accruing) loans, current	15,570	15,035
Loans receivable, gross	16,294	15,035
Performing Financial Instruments [Member] | Pass [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	6,472	3,407
Performing (accruing) loans, current	570,274	624,510
Loans receivable, gross	576,746	627,917
Performing Financial Instruments [Member] | Pass [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	1,267
Performing (accruing) loans, current	210,720	230,824
Loans receivable, gross	211,987	230,824
Performing Financial Instruments [Member] | Pass [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	592	839
Performing (accruing) loans, current	139,059	145,298
Loans receivable, gross	139,651	146,137
Performing Financial Instruments [Member] | Pass [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	3,016	209
Performing (accruing) loans, current	94,467	102,131
Loans receivable, gross	97,483	102,340
Performing Financial Instruments [Member] | Pass [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	7	8
Performing (accruing) loans, current	55,801	66,589
Loans receivable, gross	55,808	66,597
Performing Financial Instruments [Member] | Pass [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	866	2,351
Performing (accruing) loans, current	54,657	64,633
Loans receivable, gross	55,523	66,984
Performing Financial Instruments [Member] | Pass [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	724
Performing (accruing) loans, current	15,570	15,035
Loans receivable, gross	16,294	15,035
Performing Financial Instruments [Member] | Special Mention [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	123	4,000
Performing (accruing) loans, current	37,130	38,399
Loans receivable, gross	37,253	42,399
Performing Financial Instruments [Member] | Special Mention [Member] | Commercial and Industrial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Performing (accruing) loans, current	25,072	25,658
Loans receivable, gross	25,072	25,658
Performing Financial Instruments [Member] | Special Mention [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Performing (accruing) loans, current	3,832	3,860
Loans receivable, gross	3,832	3,860
Performing Financial Instruments [Member] | Special Mention [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	123	4,000
Performing (accruing) loans, current	8,226	8,881
Loans receivable, gross	8,349	12,881
Performing Financial Instruments [Member] | Substandard [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	2,428	1,079
Performing (accruing) loans, current	35,662	38,780
Loans receivable, gross	38,090	39,859
Performing Financial Instruments [Member] | Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	351	363
Performing (accruing) loans, current	7,017	10,999
Loans receivable, gross	7,368	11,362
Performing Financial Instruments [Member] | Substandard [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Performing (accruing) loans, current
Loans receivable, gross
Performing Financial Instruments [Member] | Substandard [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	2,077	716
Performing (accruing) loans, current	28,525	27,660
Loans receivable, gross	30,602	28,376
Performing Financial Instruments [Member] | Substandard [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Performing (accruing) loans, current	120	121
Loans receivable, gross	120	121
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	4,544	1,436
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	868	354
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	592	478
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	2,216	603
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	2	1
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	866
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	1,993	479
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	517
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	592	478
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	16
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	2	1
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	866
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	123
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Commercial and Industrial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	123
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	2,428	957
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	351	354
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	2,077	603
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	4,479	7,034
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	750
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		361
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	3,000	4,322
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	5
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		2,351
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	724
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	4,479	2,921
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	750
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		361
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	3,000	209
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	5
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		2,351
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due	724
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		4,000
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Commercial and Industrial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		4,000
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		113
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		113
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		16
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		9
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		7
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		7
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		7
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Construction Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Pass [Member] | Construction to Permanent Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Commercial and Industrial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Special Mention [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		9
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due		9
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member] | Substandard [Member] | Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Performing (accruing) loans, past due

XML

Note 4 - Loan Receivables and Allowance for Loan and Lease Losses - Non-accrual Loans (Details) - Business Activities Loans [Member] - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Non-accruing loans	$ 24,587	$ 20,005
Performing Financial Instruments [Member]
Performing (accruing) loans, past due	9,023	8,486
Performing (accruing) loans, current	643,066	701,689
Commercial Real Estate Portfolio Segment [Member]
Non-accruing loans	17,034	14,534
Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	1,618	363
Performing (accruing) loans, current	242,809	267,481
Residential Portfolio Segment [Member]
Non-accruing loans	4,464	3,854
Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	592	839
Performing (accruing) loans, current	142,891	149,158
Commercial Portfolio Segment [Member]
Non-accruing loans	2,532	700
Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	5,216	4,925
Performing (accruing) loans, current	131,218	138,672
Consumer Portfolio Segment [Member]
Non-accruing loans	557	917
Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	7	8
Performing (accruing) loans, current	55,921	66,710
Non-Accrual Loans [Member]
Performing (accruing) loans, past due	9,365	9,420
Performing (accruing) loans, current	15,222	10,585
Substandard [Member]
Non-accruing loans	24,587	20,005
Substandard [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	2,428	1,079
Performing (accruing) loans, current	35,662	38,780
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member]
Non-accruing loans	17,034	14,534
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	351	363
Performing (accruing) loans, current	7,017	10,999
Substandard [Member] | Residential Portfolio Segment [Member]
Non-accruing loans	4,464	3,854
Substandard [Member] | Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Performing (accruing) loans, current
Substandard [Member] | Commercial Portfolio Segment [Member]
Non-accruing loans	2,532	700
Substandard [Member] | Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	2,077	716
Performing (accruing) loans, current	28,525	27,660
Substandard [Member] | Consumer Portfolio Segment [Member]
Non-accruing loans	557	917
Substandard [Member] | Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Performing (accruing) loans, current	120	121
Substandard [Member] | Non-Accrual Loans [Member] | Commercial Real Estate Portfolio Segment [Member]
Performing (accruing) loans, past due	4,658	5,723
Performing (accruing) loans, current	12,376	8,811
Substandard [Member] | Non-Accrual Loans [Member] | Residential Portfolio Segment [Member]
Performing (accruing) loans, past due	2,145	2,884
Performing (accruing) loans, current	2,319	970
Substandard [Member] | Non-Accrual Loans [Member] | Commercial Portfolio Segment [Member]
Performing (accruing) loans, past due	2,532	700
Performing (accruing) loans, current	0
Non-accruing loans		700
Substandard [Member] | Non-Accrual Loans [Member] | Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		0
Substandard [Member] | Non-Accrual Loans [Member] | Consumer Portfolio Segment [Member]
Performing (accruing) loans, past due	30	113
Performing (accruing) loans, current	527	804
Financial Asset, 30 to 59 Days Past Due [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	4,544	1,436
Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	868	354
Financial Asset, 30 to 59 Days Past Due [Member] | Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	592	478
Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	2,216	603
Financial Asset, 30 to 59 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	2	1
Financial Asset, 30 to 59 Days Past Due [Member] | Non-Accrual Loans [Member]
Performing (accruing) loans, past due	1,786	22
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	2,428	957
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	351	354
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	2,077	603
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Commercial Real Estate Portfolio Segment [Member]
Performing (accruing) loans, past due	0	0
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Residential Portfolio Segment [Member]
Performing (accruing) loans, past due	0	0
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Commercial Portfolio Segment [Member]
Performing (accruing) loans, past due	1,786
Financial Asset, 30 to 59 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Consumer Portfolio Segment [Member]
Performing (accruing) loans, past due		22
Financial Asset, 60 to 89 Days Past Due [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	4,479	7,034
Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	750
Financial Asset, 60 to 89 Days Past Due [Member] | Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		361
Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	3,000	4,322
Financial Asset, 60 to 89 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due	5
Financial Asset, 60 to 89 Days Past Due [Member] | Non-Accrual Loans [Member]
Performing (accruing) loans, past due	86	0
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		113
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		113
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Commercial Real Estate Portfolio Segment [Member]
Performing (accruing) loans, past due	0	0
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Residential Portfolio Segment [Member]
Performing (accruing) loans, past due	23	0
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Commercial Portfolio Segment [Member]
Performing (accruing) loans, past due	63	0
Financial Asset, 60 to 89 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Consumer Portfolio Segment [Member]
Performing (accruing) loans, past due	0	0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		16
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		9
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		7
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Non-Accrual Loans [Member]
Performing (accruing) loans, past due	7,493	9,398
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		9
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due		9
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Performing (accruing) loans, past due
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Commercial Real Estate Portfolio Segment [Member]
Performing (accruing) loans, past due	4,658	5,723
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Residential Portfolio Segment [Member]
Performing (accruing) loans, past due	2,122	2,884
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Commercial Portfolio Segment [Member]
Performing (accruing) loans, past due	683	700
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Substandard [Member] | Non-Accrual Loans [Member] | Consumer Portfolio Segment [Member]
Performing (accruing) loans, past due	$ 30	$ 91

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Note 4 - Loan Receivables and Allowance for Loan and Lease Losses - Recorded Investment in TDRs (Details) $ in Thousands	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Number of contracts	9	11
Recorded investment	$ 14,497	$ 15,886
TDRs included in non-accrual loans	$ (14,497)	$ (15,886)
Non-Accrual Loans [Member]
Number of contracts	4	6
Recorded investment	$ 10,120	$ 11,508
TDRs included in non-accrual loans	$ (10,120)	$ (11,508)
Accrual Loans [Member]
Number of contracts	5	5
Recorded investment	$ 4,377	$ 4,378
TDRs included in non-accrual loans	$ (4,377)	$ (4,378)
Commercial Real Estate Portfolio Segment [Member]
Number of contracts	1	2
Recorded investment	$ 8,811	$ 9,884
TDRs included in non-accrual loans	$ (8,811)	$ (9,884)
Residential Portfolio Segment [Member]
Number of contracts	3	3
Recorded investment	$ 912	$ 928
TDRs included in non-accrual loans	$ (912)	$ (928)
Commercial Portfolio Segment [Member]
Number of contracts	1	1
Recorded investment	$ 4,000	$ 4,000
TDRs included in non-accrual loans	$ (4,000)	$ (4,000)
Consumer Portfolio Segment [Member]
Number of contracts	4	5
Recorded investment	$ 774	$ 1,074
TDRs included in non-accrual loans	$ (774)	$ (1,074)

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Note 4 - Loan Receivables and Allowance for Loan and Lease Losses - Impaired Loans (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Impaired loans, related allowance	$ 1,900,000		$ 1,400,000
Impaired loans, recorded investment	29,000,000		24,400,000
With no allowance recorded, average recorded investment	14,016,000	$ 9,978,000
With no allowance recorded, interest income recognized	65,000	29,000
With allowance recorded, average recorded investment	9,512,000	8,887,000
With allowance recorded, interest income recognized	31,000	4,000
Impaired Loans, Average recorded investment	23,528,000	18,865,000
Impaired Loans, interest income recognized	96,000	33,000
Business Activities Loans [Member]
Impaired loans with no related allowance recorded, recorded investment	17,689,000		15,453,000
Impaired loans with no related allowance recorded, unpaid principal balance	18,828,000		16,692,000
Impaired loans with a related allowance recorded, recorded investment	11,275,000		8,930,000
Impaired loans with a related allowance recorded, unpaid principal balance	11,539,000		8,930,000
Impaired loans, related allowance	1,926,000		1,412,000
Impaired loans, recorded investment	28,964,000		24,383,000
Impaired loans, unpaid principal balance	30,367,000		25,622,000
Commercial Real Estate Portfolio Segment [Member]
With no allowance recorded, average recorded investment	6,078,000	3,467,000
With no allowance recorded, interest income recognized
With allowance recorded, average recorded investment	8,813,000	8,808,000
With allowance recorded, interest income recognized		1,000
Impaired Loans, Average recorded investment	14,891,000	12,275,000
Impaired Loans, interest income recognized		1,000
Commercial Real Estate Portfolio Segment [Member] | Business Activities Loans [Member]
Impaired loans with no related allowance recorded, recorded investment	8,214,000		5,723,000
Impaired loans with no related allowance recorded, unpaid principal balance	9,135,000		6,644,000
Impaired loans with a related allowance recorded, recorded investment	8,820,000		8,811,000
Impaired loans with a related allowance recorded, unpaid principal balance	8,820,000		8,811,000
Impaired loans, related allowance	1,415,000		1,398,000
Impaired loans, recorded investment	17,034,000		14,534,000
Impaired loans, unpaid principal balance	17,955,000		15,455,000
Residential Portfolio Segment [Member]
With no allowance recorded, average recorded investment	4,248,000	3,578,000
With no allowance recorded, interest income recognized	13,000	20,000
With allowance recorded, average recorded investment	190,000	28,000
With allowance recorded, interest income recognized	3,000	2,000
Impaired Loans, Average recorded investment	4,438,000	3,606,000
Impaired Loans, interest income recognized	16,000	22,000
Residential Portfolio Segment [Member] | Business Activities Loans [Member]
Impaired loans with no related allowance recorded, recorded investment	4,138,000		3,853,000
Impaired loans with no related allowance recorded, unpaid principal balance	4,212,000		3,900,000
Impaired loans with a related allowance recorded, recorded investment	435,000		109,000
Impaired loans with a related allowance recorded, unpaid principal balance	452,000		109,000
Impaired loans, related allowance	8,000		4,000
Impaired loans, recorded investment	4,573,000		3,962,000
Impaired loans, unpaid principal balance	4,664,000		4,009,000
Commercial Portfolio Segment [Member]
With no allowance recorded, average recorded investment	2,745,000	2,082,000
With no allowance recorded, interest income recognized	46,000	1,000
With allowance recorded, average recorded investment	462,000
With allowance recorded, interest income recognized	26,000
Impaired Loans, Average recorded investment	3,207,000	2,082,000
Impaired Loans, interest income recognized	72,000	1,000
Commercial Portfolio Segment [Member] | Business Activities Loans [Member]
Impaired loans with no related allowance recorded, recorded investment	4,684,000		4,700,000
Impaired loans with no related allowance recorded, unpaid principal balance	4,803,000		4,816,000
Impaired loans with a related allowance recorded, recorded investment	1,848,000
Impaired loans with a related allowance recorded, unpaid principal balance	2,063,000
Impaired loans, related allowance	501,000
Impaired loans, recorded investment	6,532,000		4,700,000
Impaired loans, unpaid principal balance	6,866,000		4,816,000
Consumer Portfolio Segment [Member]
With no allowance recorded, average recorded investment	945,000	851,000
With no allowance recorded, interest income recognized	6,000	8,000
With allowance recorded, average recorded investment	47,000	51,000
With allowance recorded, interest income recognized	2,000	1,000
Impaired Loans, Average recorded investment	992,000	902,000
Impaired Loans, interest income recognized	8,000	9,000
Consumer Portfolio Segment [Member] | Business Activities Loans [Member]
Impaired loans with no related allowance recorded, recorded investment	653,000		1,177,000
Impaired loans with no related allowance recorded, unpaid principal balance	678,000		1,332,000
Impaired loans with a related allowance recorded, recorded investment	172,000		10,000
Impaired loans with a related allowance recorded, unpaid principal balance	204,000		10,000
Impaired loans, related allowance	2,000		10,000
Impaired loans, recorded investment	825,000		1,187,000
Impaired loans, unpaid principal balance	882,000		$ 1,342,000
Construction Portfolio Segment [Member]
With no allowance recorded, average recorded investment
With no allowance recorded, interest income recognized

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Note 5 - Loans Held for Sale (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Loans Serviced By Entity But Owned By a Third Party	$ 20,000,000		$ 19,400,000
Servicing Asset, Total	327,000
Servicing Asset at Fair Value, Amount, Ending Balance	391,000
SBA Loans [Member]
Transfer of Loans Held-for-sale to Portfolio Loans	281,000	$ 280,000
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Held-for-Sale, Not Part of Disposal Group, after Valuation Allowance, Ending Balance	1,900,000
Commercial Portfolio Segment [Member]
Financing Receivable, Held-for-Sale, Not Part of Disposal Group, after Valuation Allowance, Ending Balance	$ 938,000		$ 1,200,000

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Note 5 - Loans Held for Sale - Analysis of the Activity in the SBA Servicing Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Beginning balance	$ 316	$ 201
Servicing rights capitalized	17	2
Servicing rights amortized	(6)	(5)
Ending balance	$ 327	$ 198

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Note 6 - Goodwill and Other Intangible Assets (Details Textual) - USD ($)		3 Months Ended	12 Months Ended
	May 10, 2019	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2018	May 10, 2018
Goodwill, Ending Balance		$ 1,107,000	$ 1,107,000
Prime Bank [Member]
Goodwill, Ending Balance	$ 1,100,000			$ 1,700,000	$ 2,100,000
Goodwill, Purchase Accounting Adjustments	$ (621,000)		$ 556,000
Business Acquisition, Goodwill, Tax Deductible Period (Year)		15 years

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Note 7 - Deposits (Details Textual) - USD ($) $ in Millions	Jul. 22, 2020	Mar. 31, 2021	Dec. 31, 2020
Payments to Acquire Prepaid Debit Card Deposits	$ 50.0
Prepaid Debit Card Deposits		$ 68.8	$ 59.3

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Note 7 - Deposits - Summary of Deposits (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Non-interest bearing, Balance	$ 173,520	$ 158,676
NOW, Balance	34,433	30,529
Savings, Balance	103,025	98,635
Money market, Balance	131,844	146,389
Certificates of deposit, less than $250,000, Balance	165,130	160,968
Certificates of deposit, $250,000 or greater, Balance	66,470	49,172
Brokered deposits, Balance	18,456	41,287
Interest bearing, Total, Balance	519,358	526,980
Deposits, Balance	$ 692,878	$ 685,656

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Note 7 - Deposits - Contractual Maturities of Certificates of Deposit (Details) $ in Thousands	Mar. 31, 2021 USD ($)
1 year or less	$ 209,215
More than 1 year through 2 years	35,323
More than 2 years through 3 years	3,418
More than 3 years through 4 years	1,823
More than 4 years through 5 years	277
Contractual Maturities of Certificates of Deposit, Total	250,056
Certificates of Deposits Less Than $250,000 [Member]
1 year or less	146,767
More than 1 year through 2 years	14,345
More than 2 years through 3 years	2,667
More than 3 years through 4 years	1,074
More than 4 years through 5 years	277
Contractual Maturities of Certificates of Deposit, Total	165,130
Certificates of Deposit $250,000 or Greater [Member]
1 year or less	45,491
More than 1 year through 2 years	19,978
More than 2 years through 3 years	751
More than 3 years through 4 years	250
More than 4 years through 5 years
Contractual Maturities of Certificates of Deposit, Total	66,470
Brokered Deposits [Member]
1 year or less	16,957
More than 1 year through 2 years	1,000
More than 2 years through 3 years
More than 3 years through 4 years	499
More than 4 years through 5 years
Contractual Maturities of Certificates of Deposit, Total	$ 18,456

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Note 8 - Derivatives (Details Textual) - Interest Rate Swap [Member] - Not Designated as Hedging Instrument [Member] $ in Millions	1 Months Ended
	May 30, 2019	Nov. 30, 2018	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Derivative, Number of Instruments Held, Total			4
Derivative, Number of Instruments Added During the Period	2	2
Derivative, Collateral, Right to Reclaim Cash			$ 1.4	$ 1.4

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Note 8 - Derivatives - Schedule of Derivative Instruments (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Interest Rate Swap One [Member]
Derivative Asset, Notional Amount	$ 4,911	$ 4,911
Derivative, Maturity (Year)	8 years 36 days	8 years 109 days
Derivative, Fixed Rate	5.25%	5.25%
Derivative, Variable Rate	1.96%	1.96%
Derivative Liability, Notional Amount	$ 4,911	$ 4,911
Interest Rate Swap One [Member] | Other Assets [Member]
Interest rate swap receivable	687	997
Interest Rate Swap One [Member] | Other Liabilities [Member]
Derivative Liability, Fair Value	(687)	(997)
Interest Rate Swap Two [Member]
Derivative Asset, Notional Amount	$ 1,422	$ 1,431
Derivative, Maturity (Year)	8 years 109 days	8 years 182 days
Derivative, Fixed Rate	4.38%	4.38%
Derivative, Variable Rate	2.00%	2.00%
Derivative Liability, Notional Amount	$ 1,422	$ 1,431
Interest Rate Swap Two [Member] | Other Assets [Member]
Interest rate swap receivable	104	190
Interest Rate Swap Two [Member] | Other Liabilities [Member]
Derivative Liability, Fair Value	$ (104)	$ (190)

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Note 9 - Share-based Compensation and Employee Benefit Plan (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Labor and Related Expense	$ 2,216,000	$ 3,861,000
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	50.00%
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent	6.00%
Defined Contribution Plan, Cost	$ 48,000	89,000
Restricted Stock [Member]
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount	$ 149,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	1 year 259 days
2012 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)	3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)	2,850,507
Share-based Payment Arrangement, Expense	$ 34,000	43,000
2012 Stock Plan [Member] | Employee [Member]
Share-based Payment Arrangement, Expense	15,000	25,000
2012 Stock Plan [Member] | Patriot's External Directors [Member]
Share-based Payment Arrangement, Expense	19,000	18,000
Labor and Related Expense	$ 94,000	$ 117,000
2012 Stock Plan [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	4 years
2012 Stock Plan [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	5 years
2012 Stock Plan [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	3 years

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Note 9 - Share-based Compensation and Employee Benefit Plan- Restricted Shares (Details) - Restricted Stock [Member] - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Unvested at beginning of year (in shares)	18,498	21,470
Unvested at beginning of year, weighted average grant date fair value (in dollars per share)	$ 7.29	$ 12.91
Vested (in shares)	(700)	(2,172)
Vested, weighted average grant date fair value (in dollars per share)	$ 17.85	$ 14.56
Unvested at end of year (in shares)	17,798	19,298
Unvested at end of year, weighted average grant date fair value (in dollars per share)	$ 6.88	$ 12.73

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Note 10 - Earnings (Loss) Per Share (Details Textual)	3 Months Ended
	Mar. 31, 2021 shares
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	10,112

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Note 10 - Earnings (Loss) Per Share - Computation of Earnings Per Share Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net income (loss) attributable to Common shareholders	$ 854	$ (1,072)
Weighted average shares outstanding (in shares)	(3,943,580)	(3,931,388)
Basic earnings (loss) per share (in dollars per share)	$ 0.22	$ (0.27)
Net income (loss) attributable to Common shareholders	$ 854	$ (1,072)
Effect of potentially dilutive restricted common shares (in shares)	(1,540)		[1]
Weighted average diluted shares outstanding (in shares)	3,945,120	3,931,388
Diluted earnings (loss) per share (in dollars per share)	$ 0.22	$ (0.27)

[1] The weighted average diluted shares outstanding does not include 10,112 anti-dilutive restricted common shares for the three months ended March 31, 2020.

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Note 11 - Financial Instruments With Off-balance Sheet Risk (Details Textual) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Banks Reserve Based on Analysis in Unfunded Commitments	$ 8,000	$ 8,000

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Note 11 - Financial Instruments With Off-balance Sheet Risk - Financial Instruments With Credit Risk (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Commitments to extend credit	$ 128,763	$ 122,394
Unused Line of Credit [Member]
Commitments to extend credit	62,473	61,622
Undisbursed Construction Loans [Member]
Commitments to extend credit	19,302	25,232
Home Equity Lines of Credit [Member]
Commitments to extend credit	18,779	19,240
Future Loan Commitments [Member]
Commitments to extend credit	27,645	15,696
Financial Standy Letter of Credit [Member]
Commitments to extend credit	$ 564	$ 604

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Note 12 - Regulatory and Operational Matters (Details Textual) $ in Millions	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jan. 22, 2019	Jan. 01, 2019	Jan. 01, 2015
Community Bank, Tier One Leverage Ratio			0.09
Community Bank, Tier One Leverage Capital Required for Capital Adequacy			$ 10,000.0
Banking Regulation, Total Risk-Based Capital Ratio, Well Capitalized, Minimum	0.11	0.11	0.1
Banking Regulation, Tier One Risk-Based Capital Ratio, Well Capitalized, Minimum			0.08
Common Equity, Tier 1, Capital Required for Capital Adequacy to Risk Weighted Assets			0.065		0.07
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	0.09	0.09	0.09	0.09
Capital Conservation Buffer						0.025
Banking Regulation, Total Risk-Based Capital Ratio, Capital Adequacy, Minimum				0.11	0.105
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets with Capital Buffer					0.085
Banking Regulation, Tier One Leverage Capital Ratio, Actual	0.101	0.098
Banking Regulation, Tier One Leverage Capital, Actual	$ 89.3	$ 87.8
Banking Regulation, Total Capital, Actual	$ 98.5	$ 97.6
Banking Regulation, Total Risk-Based Capital Ratio, Actual	0.133	0.125

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Note 12 - Regulatory and Operational Matters - Regulatory Capital Amounts and Ratios (Details) $ in Thousands		Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2019	Jan. 22, 2019	Jan. 01, 2019
Total Capital (to Risk Weighted Assets) Actual Amount		$ 98,500	$ 97,600
Total Capital (to Risk Weighted Assets) Actual Ratio		0.133	0.125
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio		0.11	0.11	0.1
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Ratio					0.11	0.105
Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio				0.08
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Ratio						0.085
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Ratio				0.065		0.07
Tier 1 Capital (to Average Assets) Actual Amount		$ 89,300	$ 87,800
Tier 1 Capital (to Average Assets) Actual Ratio		0.101	0.098
Tier 1 Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio		0.09	0.09	0.09	0.09
Parent Company [Member]
Total Capital (to Risk Weighted Assets) Actual Amount		$ 88,039	$ 87,428
Total Capital (to Risk Weighted Assets) Actual Ratio		0.11804	0.11132
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	[1]
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	[1]
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Amount	[2]
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Ratio	[2]
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Amount		$ 59,665	$ 62,827
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Ratio		0.08	0.08
Tier 1 Capital (to Risk Weighted Assets) Actual Amount		$ 68,703	$ 67,602
Tier 1 Capital (to Risk Weighted Assets) Actual Ratio		0.09212	0.08608
Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	[1]
Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	[1]
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Amount	[2]
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Ratio	[2]
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Amount		$ 44,749	$ 47,120
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Ratio		0.06	0.06
Common Equity Tier 1 Capital (to Risk Weighted Assets) Actual Amount		$ 60,703	$ 59,602
Common Equity Tier 1 Capital (to Risk Weighted Assets) Actual Ratio		0.08139	0.07589
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	[1]
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	[1]
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Amount	[2]
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Ratio	[2]
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Amount		$ 33,562	$ 35,340
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Ratio		0.045	0.045
Tier 1 Capital (to Average Assets) Actual Amount		$ 68,703	$ 67,602
Tier 1 Capital (to Average Assets) Actual Ratio		0.07791	0.07539
Tier 1 Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	[1]
Tier 1 Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	[1]
Tier 1 Capital (to Average Assets) For Capital Adequacy Purposes Amount		$ 35,272	$ 35,868
Tier 1 Capital (to Average Assets) For Capital Adequacy Purposes Ratio		0.04	0.04
Subsidiaries [Member]
Total Capital (to Risk Weighted Assets) Actual Amount		$ 98,538	$ 97,608
Total Capital (to Risk Weighted Assets) Actual Ratio		0.13317	0.1251
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	[1]	$ 73,994	$ 78,026
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	[1]	0.1	0.1
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Amount	[2]	$ 77,693	$ 81,927
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Ratio	[2]	0.105	0.105
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Amount		$ 59,195	$ 62,421
Total Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Ratio		0.08	0.08
Tier 1 Capital (to Risk Weighted Assets) Actual Amount		$ 89,274	$ 87,844
Tier 1 Capital (to Risk Weighted Assets) Actual Ratio		0.12065	0.11258
Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	[1]	$ 59,195	$ 62,421
Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	[1]	0.08	0.08
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Amount	[2]	$ 62,895	$ 66,322
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Ratio	[2]	0.085	0.085
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Amount		$ 44,396	$ 46,815
Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Ratio		0.06	0.06
Common Equity Tier 1 Capital (to Risk Weighted Assets) Actual Amount		$ 89,274	$ 87,844
Common Equity Tier 1 Capital (to Risk Weighted Assets) Actual Ratio		0.12065	0.11258
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	[1]	$ 48,096	$ 50,717
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	[1]	0.065	0.065
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Amount	[2]	$ 51,796	$ 54,618
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes With Capital Buffer Ratio	[2]	0.07	0.07
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Amount		$ 33,297	$ 35,112
Common Equity Tier 1 Capital (to Risk Weighted Assets) For Capital Adequacy Purposes Ratio		0.045	0.045
Tier 1 Capital (to Average Assets) Actual Amount		$ 89,274	$ 87,844
Tier 1 Capital (to Average Assets) Actual Ratio		0.10122	0.09794
Tier 1 Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	[1]	$ 79,378	$ 80,721
Tier 1 Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	[1]	0.09	0.09
Tier 1 Capital (to Average Assets) For Capital Adequacy Purposes Amount		$ 35,279	$ 35,876
Tier 1 Capital (to Average Assets) For Capital Adequacy Purposes Ratio		0.04	0.04

[1] Designation as "Well Capitalized" does not apply to bank holding companies - the Company. Such categorization of capital adequacy only applies to insured depository institutions - the Bank.

[2] The Capital Conservation Buffer implemented by the FDIC began to be phased in beginning January 1, 2016. It was not applicable to periods prior to that date and does not apply to bank holding companies - the Company.

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Note 13 - Fair Value and Interest Rate Risk (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Other Investments, Total	$ 4,450	$ 4,450
Solomon Hess SBA Loan Fund [Member]
Other Investments, Total	$ 4,450
Federal Home Loan Bank Certificates and Obligations (FHLB) [Member]
Stock Value Par or Stated Value per Share (in dollars per share)	$ 100

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Note 13 - Fair Value and Interest Rate Risk - Financial Assets and Liabilities (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Fair value, total	$ 57,893,000	$ 49,262,000
SBA servicing assets	391,000
Reported Value Measurement [Member]
Financial assets, total	831,547,000	826,476,000
Financial liabilities, total	815,152,000	808,228,000
Estimate of Fair Value Measurement [Member]
Financial assets, total	828,773,000	823,887,000
Financial liabilities, total	822,751,000	817,066,000
Fair Value, Inputs, Level 1 [Member] | Reported Value Measurement [Member] | Brokered Deposits [Member]
Deposits	18,456,000	41,287,000
Fair Value, Inputs, Level 1 [Member] | Reported Value Measurement [Member] | Cash and Due from Banks [Member]
Cash and cash equivalents	2,593,000	3,006,000
Fair Value, Inputs, Level 1 [Member] | Reported Value Measurement [Member] | Interest-bearing Deposits [Member]
Cash and cash equivalents	81,681,000	31,630,000
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member] | Brokered Deposits [Member]
Deposits	18,675,000	41,643,000
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member] | Cash and Due from Banks [Member]
Cash and cash equivalents	2,593,000	3,006,000
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member] | Interest-bearing Deposits [Member]
Cash and cash equivalents	81,681,000	31,630,000
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member]
Fair value, total	57,893,000	49,262,000
Other investments	4,450,000	4,450,000
Federal Reserve Bank stock	2,744,000	2,783,000
Federal Home Loan Bank stock	4,503,000	4,503,000
Loans held for sale	2,829,000	1,217,000
Other Real Estate Owned	1,216,000	1,906,000
Accrued interest receivable	6,270,000	6,620,000
FHLB borrowings	90,000,000	90,000,000
Senior notes	11,946,000	11,927,000
Subordinated debt	9,789,000	9,782,000
Junior subordinated debt owed to unconsolidated trust	8,112,000	8,110,000
Accrued interest payable	693,000	572,000
Interest rate swap liability	791,000	1,187,000
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Demand Deposits [Member]
Deposits	173,520,000	158,676,000
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Savings Deposits [Member]
Deposits	103,025,000	98,635,000
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Money Market Deposits [Member]
Deposits	131,844,000	146,389,000
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Negotiable Order of Withdrawal (NOW) Accounts [Member]
Deposits	34,433,000	30,529,000
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Time Deposits [Member]
Deposits	231,600,000	210,140,000
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Interest Rate Swap [Member]
Interest rate swap receivable	791,000	1,187,000
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Fair value, total	57,893,000	49,262,000
Other investments	4,450,000	4,450,000
Federal Reserve Bank stock	2,744,000	2,783,000
Federal Home Loan Bank stock	4,503,000	4,503,000
Loans held for sale	3,008,000	1,343,000
Other Real Estate Owned	1,216,000	1,906,000
Accrued interest receivable	6,270,000	6,620,000
FHLB borrowings	96,322,000	97,293,000
Senior notes	12,022,000	12,028,000
Subordinated debt	10,072,000	10,125,000
Junior subordinated debt owed to unconsolidated trust	8,112,000	8,110,000
Accrued interest payable	693,000	572,000
Interest rate swap liability	791,000	1,187,000
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Demand Deposits [Member]
Deposits	173,520,000	158,676,000
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Savings Deposits [Member]
Deposits	103,025,000	98,635,000
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Money Market Deposits [Member]
Deposits	131,844,000	146,389,000
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Negotiable Order of Withdrawal (NOW) Accounts [Member]
Deposits	34,433,000	30,529,000
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Time Deposits [Member]
Deposits	232,326,000	210,882,000
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Interest Rate Swap [Member]
Interest rate swap receivable	791,000	1,187,000
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member]
Loans receivable, net	666,250,000	719,596,000
SBA servicing assets	327,000	316,000
Note payable	943,000	994,000
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
Loans receivable, net	663,233,000	716,822,000
SBA servicing assets	391,000	375,000
Note payable	$ 916,000	$ 997,000

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Note 13 - Fair Value and Interest Rate Risk - Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available-for-sale securities	$ 57,893	$ 49,262
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities	22,687	16,833
Corporate Debt Securities [Member]
Available-for-sale securities	17,333	17,290
Subordinated Notes [Member]
Available-for-sale securities	9,149	9,005
SBA Loan Pools [Member]
Available-for-sale securities	8,165	5,567
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities	559	567
Fair Value, Recurring [Member]
Available-for-sale securities	57,893	49,262
Interest rate swap receivable	791	1,187
Interest rate swap liability	791	1,187
Fair Value, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities	22,687	16,833
Fair Value, Recurring [Member] | Corporate Debt Securities [Member]
Available-for-sale securities	17,333	17,290
Fair Value, Recurring [Member] | Subordinated Notes [Member]
Available-for-sale securities	9,149	9,005
Fair Value, Recurring [Member] | SBA Loan Pools [Member]
Available-for-sale securities	8,165	5,567
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities	559	567
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Available-for-sale securities
Interest rate swap receivable
Interest rate swap liability
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Corporate Debt Securities [Member]
Available-for-sale securities
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Subordinated Notes [Member]
Available-for-sale securities
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | SBA Loan Pools [Member]
Available-for-sale securities
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Available-for-sale securities	57,893	49,262
Interest rate swap receivable	791	1,187
Interest rate swap liability	791	1,187
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities	22,687	16,833
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Corporate Debt Securities [Member]
Available-for-sale securities	17,333	17,290
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Subordinated Notes [Member]
Available-for-sale securities	9,149	9,005
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | SBA Loan Pools [Member]
Available-for-sale securities	8,165	5,567
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities	559	567
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Available-for-sale securities
Interest rate swap receivable
Interest rate swap liability
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | Corporate Debt Securities [Member]
Available-for-sale securities
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | Subordinated Notes [Member]
Available-for-sale securities
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | SBA Loan Pools [Member]
Available-for-sale securities
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities

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Note 13 - Fair Value and Interest Rate Risk - Quantitative Information About Level 3 Fair Value Measurements (Details)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
SBA servicing assets	$ 327,000
Fair Value, Inputs, Level 3 [Member]
SBA servicing assets		$ 375,000
Fair Value, Inputs, Level 3 [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]
SBA servicing assets		0.1473
Fair Value, Inputs, Level 3 [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]
SBA servicing assets		0.149
Fair Value, Inputs, Level 3 [Member] | Fair Value of Collateral Approach [Member]
Impaired loans, net	26,538,000	$ 22,971,000
Other Real Estate Owned	$ 1,216,000	$ 1,906,000
Fair Value, Inputs, Level 3 [Member] | Fair Value of Collateral Approach [Member] | Measurement Input, Discount Rate [Member]
Other Real Estate Owned	0.0584	0.0584
Fair Value, Inputs, Level 3 [Member] | Fair Value of Collateral Approach [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]
Impaired loans, net	0.058	0.058
Fair Value, Inputs, Level 3 [Member] | Fair Value of Collateral Approach [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]
Impaired loans, net	0.2	0.2
Fair Value, Inputs, Level 3 [Member] | Valuation Technique, Discounted Cash Flow [Member]
SBA servicing assets	$ 391,000
Fair Value, Inputs, Level 3 [Member] | Valuation Technique, Discounted Cash Flow [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]
SBA servicing assets	0.1473
Fair Value, Inputs, Level 3 [Member] | Valuation Technique, Discounted Cash Flow [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]
SBA servicing assets	0.149