Company: PNBK
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001628280-25-025485
Chunk: 80

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 80
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31, 2024 to March 31, 2025 primarily driven by lower cash balances maintained as of March 31, 2025 after the completion of the Private Placement as the risk of deposit flight subsided.  

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 are sufficient to cover probable and reasonable fluctuations in deposit accounts, and to meet other anticipated operational cash requirements at the Bank. 

The Private Placement on March 20, 2025, provided additional liquidity to both the Bank and the Company and alleviated the liquidity risk.  The Private Placement provided additional operating cash to the Bank and the Company and the amendment of the Company’s Senior Notes deferred interest payments until 2026 and extended the maturity to April 15, 2028 and the amendment of the Company’s Subordinated Notes deferred interest payment until 2026.

Net cash provided by operating activities decreased by $7.6 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.  Within this activity there was a decrease in originations of loans held for sale and proceeds from sale of assets held for sale.  This activity is primarily related to the Digital Payments Division credit card loans.  This program started in the third quarter of 2023 and continues today.  The activity generates non-interest income and only requires short term liquidity as the loans are originated and expected to be sold within three days.  

Net cash provided by investing activities decreased by $9.2 million for the three months ended March 31, 2025 compared to the compared to the three months ended March 31, 2024.  The decrease is primarily due to lower payments received on loans receivable as the loan portfolio has been running off.  

Net cash provided by financing activities decreased by $35.8 million for the three months ended March 31, 2025 compared to the compared to the three months ended March 31, 2024.  The decrease is primarily due to utilizing the proceeds from the Common and Preferred stock issuances and excess cash to lower deposits.  This was offset by lower repayments on FHLB advances, net as the Bank did not require as much FHLB funding due to the net cash provided by lower loan originations and loan purchases. 

Management manages its capital resources by seeking