Company: PNBK
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001628280-25-017837
Chunk: 104

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-04-15
Form: 10-K
Item: Item 7
Chunk 104
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,702)(40,526)Total used borrowing capacity(118,161)(283,673)Total liquidity$234,017 $191,352 Total liabilities$1,008,027 $1,049,042 On-hand liquidity to total liabilities16.27 %6.77 %Total liquidity to total liabilities23.22 %18.24 %

On-hand liquidity increased $93.0 million from December 31, 2023 to December 31, 2024 as the Company increased its cash balances to provide available liquidity since the borrowing capacity had been reduced.  The Company’s decline in financial performance resulted in less borrowing capacity from the FHLB and the brokered deposit channel. The Company paid off the BTFP in September 2024 which has a slight benefit on the Company's Net Interest Income as the rate on the BTFP was slightly higher than the current replacement funding.  Both on-hand liquidity to total liabilities and total liquidity to total liabilities increased at December 31, 2024 compared to December 31, 2023 due to the increased cash balances and the reduction in total liabilities as the overall balance sheet has shrunk in an effort to improve the Bank's capital ratios.

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.  As of December 31, 2024, due to the decline in borrowing capacity, the Bank’s ability to fund significant unexpected deposit outflows was limited.   

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The Private Placement closing 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 increased by $13.4 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.  Within this activity there was a significant increase in originations of loans held for sale and proceeds from sale of assets held for sale.  This activity is primarily related to