Company: PNBK
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001628280-25-052358
Chunk: 159

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 159
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 - CRE31 2,357 Loans receivable, gross588,666 707,472 Allowance for credit losses(7,187)(7,305)Loans receivable, net$581,479 $700,167 

16

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

Existing Loan PortfolioPatriot’s lending activities have historically been conducted primarily in Fairfield and New Haven Counties in Connecticut, Westchester County in New York, and the five boroughs of New York City.   Beginning in the third quarter of 2025, the Bank began to expand its footprint to add customers in the greater Los Angeles Metropolitan Statistical Area ("MSA").   The Bank’s existing loan portfolio has consisted of commercial real estate (“CRE”) loans, commercial and industrial loans, residential real estate loans (primarily purchased), consumer loans, and a limited volume of construction loans. Commercial and residential real estate loans are collateralized primarily by first or second mortgages on real estate. The ability and willingness of borrowers to satisfy their loan obligations can be dependent to some degree on the regional economy and real estate market conditions.Patriot maintains credit policies applicable to each lending activity and evaluates the creditworthiness of every borrower. Unless mitigating factors exist, commercial real estate loans are generally limited to 75% of the market value of the underlying collateral; multifamily real estate loans are limited to 75% to 80% loan-to-value; and construction loans (none currently outstanding) were limited to 75% of “as-completed” appraised value. Real estate is the primary form of collateral, although other collateral types include accounts receivable, inventory, marketable securities, time deposits and other business assets.Commercial Real Estate Loans (“CRE” Loans)CRE loans include both owner-occupied and non-owner-occupied properties. Non-owner-occupied CRE repayment depends primarily on rents from leases to third party tenants, successful management, marketing and expense supervision necessary to maintain the property.   Repayment of these loans may be adversely affected by conditions in the real estate market or the general economy.Owner-occupied CRE loans are utilized by a business for the purpose of providing the space needs for that business and the running of its operations. Owner-occupied CRE depends on the borrower’s operating business cash flow. Repayment of these loans may be adversely affected by conditions in the specific owner’s industry in addition to the general economy.In underwriting CRE loans