Company: PNBK
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001628280-25-025485
Chunk: 194

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 194
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 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, 2025 and December 31, 2024, the unamortized placement fee deducted from the face amount of the junior subordinated debt owed to the unconsolidated trust amounted to $99,000 and $101,000, respectively, and accrued interest on the junior subordinated debentures was $333,000 and $174,000, respectively.  In December 2024, the Company opted to defer payment of the quarterly interest, as permitted under the terms of the junior subordinated debentures, and continues to defer interest payments through March 31, 2025.

For the three months ended March 31, 2025 and 2024, the Company recognized interest expense of $162,000 and $179,000, 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, 2025 and December 31, 2024, the note had a balance outstanding of $109,000 and $162,000, respectively. The note originally set to mature in August 2024, was extended from August 25, 2024 to September 1, 2025, with the Bank continuing its scheduled principal and interest payments.  The note is secured by a first mortgage deed and security agreement on the purchased property.

For the three months ended March 31, 2025 and 2024, the Company recognized interest expense of $1,000 and $1,000, respectively. 

Derivatives

As of March 31, 2025, Patriot has two interest rate swaps (“swaps”). One swap is with a loan customer to provide a facility to mitigate the fluctuations in the variable rate on the respective loan. The other swap is with an outside third party. The