Company: PNBK
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001628280-25-052358
Chunk: 39

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 39
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 determine that the borrower has the capacity to continue to perform under the terms of the loan, the loan continues accruing interest. Non-accruing modified loans may be returned to accrual status when there has been a sustained period of performance (generally six consecutive months of payments) and both principal and interest are reasonably assured of collection.During the three and nine months ended September 30, 2025 and 2024, the Company had no modified loans made to borrowers experiencing financial difficulty. There were no modified loans that had a payment default during the three and nine months ended September 30, 2025 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. As of September 30, 2025 and December 31, 2024, there were no commitments to advance additional funds under the modified loans.

Note 5.    Loans Held for Sale

SBA Loans held for sale SBA Loans held for sale represent the guaranteed portion of SBA loans originated and are reflected at the lower of aggregate cost or market value. As of September 30, 2025 and December 31, 2024, there were no SBA loans held for sale. During the three and nine months ended September 30, 2025, no SBA loans previously classified as held for sale were transferred to held for investment. $5.5 million SBA held for sale loans were transferred to held for investment in the three and nine months ended September 30, 2024.The Company generally sells the guaranteed portion of its SBA loans to a third party and retains the servicing, holding the unguaranteed portion in its portfolio. When sales of SBA loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets, less the discount of the retained portion of the loan are recognized in income.Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment will be evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment, if temporary, would be reported as a valuation allowance.Serviced loans sold to others are not included in the accompanying Consolidated Balance Sheets. The total