Note 20 - Subsequent Event

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Subsequent Events [Text Block]

Note 20. Subsequent Event

Definitive Purchase Agreement

On

February 06, 2018,

Patriot National Bancorp, Inc., the parent holding company of Patriot Bank, N.A. (“Patriot”), and Hana Small Business Lending, Inc. (“Hana SBL”), a wholly-owned subsidiary of Hana Financial, Inc. (“Hana Financial”) announced the signing of a definitive purchase agreement pursuant to which Patriot will acquire Hana SBL’s SBA Lending business.

Hana SBL is a fully integrated national SBA origination and servicing platform. It has originated nearly

$1

billion of SBA

7

(a) loans since its inception in

2006.

The transaction includes the purchase of approximately

$120

million of SBA

7

(a) loans and servicing rights relating to a pool of

$370

million in loans, and the assumption of

two

loan securitization vehicles, currently rated “AA+” (Hana SBL Loan Trust

2014

) and “A-” (Hana SBL Loan Trust

2016

) by Standard and Poor’s. Total cash consideration is approximately

$83

million with the assumption of approximately

$41

million of liabilities. The transaction is subject to the satisfactory completion of certain due diligence requirements, purchase price adjustments at closing and the receipt of required governmental and regulatory approvals.

As a result of the proximity of the definitive purchase to the date these consolidated financial statements are available to be issued, Patriot is still evaluating the estimated fair values of the assets to be acquired and the liabilities to be assumed. Accordingly, the amount of any goodwill and other intangible assets to be recognized in the connection with this transaction, as well as acquisition costs incurred and expected to be incurred, are also yet to be determined.

The effect of the merger is expected to be reflected in the Patriot

’s results beginning with the

third

quarter of

2018.