Company: PNBK
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001628280-25-052358
Chunk: 40

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 40
---
 amount of such loans serviced, but owned by a third party, amounted to approximately $32.8 million and $43.8 million at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, the servicing asset has a carrying value of $0.6 million and $0.7 million, respectively, and fair value of $0.7 million and $0.8 million, respectively. Income and fees collected for loan servicing are credited to non-interest income when earned, net of amortization on the related servicing assets. The servicing asset is included in other assets on the Consolidated Balance Sheets.In the second quarter of 2025, the Bank made the decision to voluntarily suspend its status as a participant in SBA’s Preferred Lender Program (“PLP”).  This decision was made in response to the Bank’s desire to temporarily exit the SBA lending business and the Bank’s Definitive Agreement with the OCC.  It is possible that the Bank will determine in the future that it is prudent to petition to the SBA for reinstatement in the PLP.

31

Table of ContentsPATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited)

Loans held for sale - Digital Payments LoansThe Bank's Digital Payments Division has entered into a Program Management Agreement with a Buyer. Under the agreement, Patriot originates commercial credit card loans that are marketed by the buyer. As of September 30, 2025 and December 31, 2024, the Bank had credit card loans held for sale totaling $15.0 million and $11.4 million, respectively. The credit card loans are expected to be held for no longer than three days before being sold to the buyer. The credit card loans are fully cash-secured by deposits at Patriot. The credit card loans are sold to the buyer as a whole loan sale transaction, priced at par, thus there is no servicing asset or gain or loss on sale.Loans held for sale Residential Mortgage Loans In the second quarter of 2025, the Bank exited the residential mortgage origination business. As of September 30, 2025 and December 31, 2024, the Company reported residential mortgage loans held for sale totaling $0 and $4.3 million, respectively. These loans are recorded at the lower of aggregate cost or market value. For the three and nine months