Company: PNBK
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001628280-25-052358
Chunk: 21

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 21
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.  The proceeds of the lines of credit are utilized for business and investment purposes.  Although contractually unsecured for strong credits, the Bank may require a pledge of eligible assets—including cash, marketable securities, or other high-value property—on an “abundance-of-caution” basis. Lines typically range from $250 thousand to $5 million, with maturities of one year, and are renewable annually subject to re-underwriting.   The loans have prime-based interest rates with market origination fees.  Rediscount Line of Credit Program During the third quarter of 2025 the Bank launched a rediscount lending facility that provides secured, revolving lines of credit to non-bank loan originators and private credit providers.  Borrowers pledge single loans or pools of performing loans and leases.   Typically, commercial real estate, residential real estate or equipment loans are provided as collateral, which may be replenished as the underlying loans pay down. Typical commitments range from $1 million to $15 million, with terms of 12 to 36 months and pricing on a floating rate basis.  The facilities are full-recourse to the borrower and are governed by defined borrowing-base, collateral-performance, and reporting covenants.  Commercial Real Estate Program During the third quarter of 2025 the Bank also established a CRE-lending program to finance properties for depositor and relationship clients. Loans generally range from $1 million to $25 million, are secured by first mortgages, and are underwritten to maximum loan-to-value ratios and appropriate debt-service coverage metrics. Interest rates are typically floating rates with terms of 12 to 60 months, and may include extension options.  All three programs are subject to the Bank’s existing credit policies, together with new, enhanced standards and underwriting guidelines.   The new loan programs comply with the Bank’s concentration limits, and risk-management controls, including heightened portfolio management routines, borrower and guarantor liquidity testing, and ongoing regulatory reporting. Early production volumes in the third quarter of 2025 remain modest as the Bank completes pilot transactions and validates credit performance metrics.  Each of the new loan products includes minimum deposit requirements designed to strengthen client relationships and promote additional business activities such as treasury management and card services.  

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

Allowance for Credit Losses The Company adopted ASU 2016-13 on January 1