Company: PNBK
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001628280-25-025485
Chunk: 185

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 185
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 was comprised of 268 borrowers. Of these, 14 loans were individually evaluated, and a specific reserve of $310,000 was established for them. 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. No individually evaluated loans were cash flow dependent loans.

As of December 31, 2024, the $25.9 million of non-accrual loans was comprised of 335 borrowers. Of which, 14 loans were individually evaluated, and a specific reserve of $463,000 was established. 

Loans held for sale

SBA loans held for sale totaled zero as of March 31, 2025 and December 31, 2024. SBA loans held for sale represent the guaranteed portion of SBA loans and are reflected at the lower of aggregate cost or market value. 

As of March 31, 2025 and December 31, 2024, the credit card loans held for sale from Digital Payments division totaled $17.6 million and $11.4 million, respectively. The credit card loans expected to be held for no longer than three days before being sold. The credit card receivable are fully cash-secured by deposits at Patriot. The credit card loans are sold to the third party as a whole loan sale transaction, priced at Par, thus there is no servicing asset or gain or loss on sale.

In April 2024, the Bank reentered the residential mortgage business. The Residential Mortgage Division, located in Jacksonville, FL, generates the loans and typically sells them to third parties. As of March 31, 2025 and December 31, 2024, the Company reported residential mortgage loans held for sale totaling $3.2 million and $4.3 million, respectively. These loans are recorded at the lower of aggregate cost or market value. For the three months ended March 31, 2025, a total gain on sale of $43,000 was recorded. A servicing asset of $50,000 was recognized as of March 31, 2025. In April 2025, the Company decided to close the Residential Mortgage Division.

Deferred Taxes

Patriot accounts for income taxes under the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities