10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________

FORM 10-Q

__________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 000-29599

PATRIOT NATIONAL BANCORP, INC.

(Exact name of registrant as specified in its charter)

Connecticut	06-1559137
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
900 Bedford Street, Stamford, Connecticut	06901
(Address of principal executive offices)	(Zip Code)

(203) 252-5900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	PNBK	NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of August 9, 2024, there were 3,976,073 shares of the registrant’s common stock outstanding.

1

TABLE OF CONTENTS

Table of Contents	2
PART I- FINANCIAL INFORMATION	3
Item 1: Consolidated Financial Statements	3
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Operations (Unaudited)	4
Consolidated Statements of Comprehensive Loss (Unaudited)	5
Consolidated Statements of Shareholder's Equity (Unaudited)	6
Consolidated Statements of Cash Flows (Unaudited)	8
Notes to Consolidated Financial Statements (Unaudited)	10
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations	43
Item 3: Quantitative and Qualitative Disclosures about Market Risk	58
Item 4: Disclosure Controls and Procedures	59
PART II - OTHER INFORMATION	61
Item 1: Legal Proceedings	61
Item 5: Other Information	61
Item 6: Exhibits	62
SIGNATURES	63

2

PART I- FINANCIAL INFORMATION

Item 1: Consolidated Financial Statements

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30, 2024		December 31, 2023
(In thousands, except share data)	Unaudited
Assets
Cash and due from banks:
Noninterest bearing deposits and cash	$	2,514	$	2,195
Interest bearing deposits	91,097		50,322
Restricted cash	41		14,019
Total cash, cash equivalents and restricted cash	93,652		66,536
Investment securities:
Available-for-sale securities, at fair value	86,667		89,187
Other investments, at cost	4,450		4,450
Total investment securities	91,117		93,637
Federal Reserve Bank (FRB) stock, at cost	2,193		2,090
Federal Home Loan Bank (FHLB) stock, at cost	3,571		4,202
Loans receivable (net of allowance for credit losses: 2024: $(14,989) and 2023: $(15,925))	761,313		832,934
Loans held for sale	14,092		20,767
Accrued interest and dividends receivable	6,452		7,219
Premises and equipment, net	29,338		29,875
Other real estate owned	2,843		2,843
Deferred tax asset	25,104		24,134
Core deposit intangible, net	179		203
Other assets	9,158		8,985
Total assets	$	1,039,012	$	1,093,425
Liabilities
Deposits:
Noninterest bearing deposits	$	93,736	$	110,056
Interest bearing deposits	707,166		730,255
Total deposits	800,902		840,311
FHLB, FRB and correspondent bank borrowings	156,900		171,000
Senior notes, net	11,792		11,723
Subordinated debt, net	9,883		9,869
Junior subordinated debt owed to unconsolidated trust, net	8,142		8,137
Note payable	270		376
Advances from borrowers for taxes and insurance	2,768		1,164
Accrued expenses and other liabilities	7,828		6,462
Total liabilities	998,485		1,049,042
Commitments and Contingencies
Shareholders' equity
Preferred stock, no par value; 1,000,000 shares authorized, no shares issued and outstanding	—		—
Common stock, $.01 par value, 100,000,000 shares authorized; As of June 30, 2024: 4,049,814 shares issued; 3,976,073 shares outstanding; As of December 31, 2023: 4,049,814 shares issued; 3,976,073 shares outstanding.	106,735		106,670
Accumulated deficit	(50,406)		(47,026)
Accumulated other comprehensive loss	(15,802)		(15,261)
Total shareholders' equity	40,527		44,383
Total liabilities and shareholders' equity	$	1,039,012	$	1,093,425

See Accompanying Notes to Consolidated Financial Statements.

3

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share amounts)	2024		2023		2024		2023
Interest and Dividend Income
Interest and fees on loans	$	11,993	$	14,052	$	24,641	$	26,602
Interest on investment securities	632		687		1,293		1,367
Dividends on investment securities	78		171		149		306
Other interest income	514		399		1,135		680
Total interest and dividend income	13,217		15,309		27,218		28,955
Interest Expense
Interest on deposits	6,285		5,248		12,971		8,827
Interest on FHLB, FRB and correspondent bank borrowings	1,214		1,723		2,428		3,159
Interest on senior debt	289		289		579		579
Interest on subordinated debt	404		333		810		659
Interest on note payable	2		3		3		5
Total interest expense	8,194		7,596		16,791		13,229
Net interest income	5,023		7,713		10,427		15,726
Provision for credit losses	3,092		1,325		3,750		3,545
Net interest income after provision for credit losses	1,931		6,388		6,677		12,181
Non-interest Income
Loan application, inspection and processing fees	90		121		292		244
Deposit fees and service charges	239		74		320		142
Gains on sales of loans	54		85		321		166
Rental income	130		105		151		224
(Loss) gain on sale of investment securities, net	—		—		(24)		24
Digital Payments income	1,212		405		2,176		766
Other income	338		39		1,074		98
Total non-interest income	2,063		829		4,310		1,664
Non-interest Expense
Salaries and benefits	4,623		4,661		8,779		8,928
Occupancy and equipment expense	862		839		1,679		1,723
Data processing expense	336		316		660		610
Professional and other outside services	737		727		1,578		1,641
Project expenses, net	—		66		—		93
Advertising and promotional expense	88		77		134		162
Loan administration and processing expense	52		103		60		154
Regulatory assessments	285		317		504		499
Insurance expense, net	73		68		149		145
Communications, stationary and supplies	220		241		369		432
Other operating expense	723		648		1,313		1,260
Total non-interest expense	7,999		8,063		15,225		15,647
Loss before income taxes	(4,005)		(846)		(4,238)		(1,802)
Benefit for income taxes	(924)		(231)		(858)		(488)
Net loss	$	(3,081)	$	(615)	$	(3,380)	$	(1,314)
Basic loss per share	$	(0.77)	$	(0.16)	$	(0.85)	$	(0.33)
Diluted loss per share	$	(0.77)	$	(0.16)	$	(0.85)	$	(0.33)

See Accompanying Notes to Consolidated Financial Statements.

4

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	$	(3,081)	$	(615)	$	(3,380)	$	(1,314)
Other comprehensive loss
Unrealized holding loss on securities	(29)		(2,211)		(629)		(507)
Income tax effect	8		570		168		131
Reclassification for realized loss (gain) on sale of investment securities	—		—		24		(24)
Income tax effect	—		—		(6)		6
Impact of update to effective tax rate	(49)		—		(98)		—
Total other comprehensive loss	(70)		(1,641)		(541)		(394)
Comprehensive loss	$	(3,151)	$	(2,256)	$	(3,921)	$	(1,708)

See Accompanying Notes to Consolidated Financial Statements.

5

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

	Three Months Ended June 30, 2024
(In thousands, except shares)	Number of Shares	Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at March 31, 2024	3,976,073	$	106,694	$	(47,325)	$	(15,732)	$	43,637
Comprehensive loss:
Net loss	—	—		(3,081)		—		(3,081)
Unrealized holding loss on available-for-sale securities, net of tax	—	—		—		(70)		(70)
Total comprehensive loss	—	—		(3,081)		(70)		(3,151)
Share-based compensation expense	—	41		—		—		41
Balance at June 30, 2024	3,976,073	$	106,735	$	(50,406)	$	(15,802)	$	40,527

	Three Months Ended June 30, 2023
(In thousands, except shares)	Number of Shares	Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at March 31, 2023	3,965,186	$	106,588	$	(43,546)	$	(14,398)	$	48,644
Comprehensive loss:
Net loss	—	—		(615)		—		(615)
Unrealized holding loss on available-for-sale securities, net of tax	—	—		—		(1,641)		(1,641)
Total comprehensive loss	—	—		(615)		(1,641)		(2,256)
Share-based compensation expense	—	23		—		—		23
Balance at June 30, 2023	3,965,186	$	106,611	$	(44,161)	$	(16,039)	$	46,411

6

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (Continued)

	Six Months Ended June 30, 2024
(In thousands, except shares)	Number of Shares	Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at January 1, 2024	3,976,073	$	106,670	$	(47,026)	$	(15,261)	$	44,383
Comprehensive loss:
Net loss	—	—		(3,380)		—		(3,380)
Unrealized holding loss on available-for-sale securities, net of tax	—	—		—		(541)		(541)
Total comprehensive loss	—	—		(3,380)		(541)		(3,921)
Share-based compensation expense	—	65		—		—		65
Balance at June 30, 2024	3,976,073	$	106,735	$	(50,406)	$	(15,802)	$	40,527

	Six Months Ended June 30, 2023
(In thousands, except shares)	Number of Shares	Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at January 1, 2023	3,965,186	$	106,565	$	(31,337)	$	(15,645)	$	59,583
Transition adjustment related to adoption of ASC326, net of tax	—	—		(11,510)		—		(11,510)
Comprehensive loss:
Net loss	—	—		(1,314)		—		(1,314)
Unrealized holding loss on available-for-sale securities, net of tax	—	—		—		(394)		(394)
Total comprehensive loss	—	—		(1,314)		(394)		(1,708)
Share-based compensation expense	—	46		—		—		46
Balance at June 30, 2023	3,965,186	$	106,611	$	(44,161)	$	(16,039)	$	46,411

See Accompanying Notes to Consolidated Financial Statements.

7

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)	Six Months Ended June 30,
	2024		2023
Cash Flows from Operating Activities:
Net loss	$	(3,380)	$	(1,314)
Adjustments to reconcile net loss to net cash provided by operating activities:
Accretion of investment premiums and discounts, net	(68)		(52)
Amortization and accretion of purchase loan premiums and discounts, net	76		1,227
Amortization of debt issuance costs	88		87
Amortization of core deposit intangible	24		23
Amortization of servicing assets of sold SBA loans	140		62
Provision for credit losses	3,750		3,545
Depreciation and amortization	557		615
Loss (gain) on sales of available-for-sale securities	24		(24)
Gain on sale of premises and equipment	(3)		—
Share-based compensation	65		46
Increase in deferred income taxes, net	(906)		(494)
Originations of loans held for sale, net	(274,325)		(3,578)
Proceeds from sale of loans held for sale	280,134		3,095
Gains on sale of loans held for sale, net	(321)		(166)
Changes in assets and liabilities:
Decrease (increase) in accrued interest and dividends receivable	767		(361)
(Increase) decrease in other assets	(260)		1,984
Increase (decrease) in accrued expenses and other liabilities	1,484		(899)
Net cash provided by operating activities	7,846		3,796
Cash Flows from Investing Activities:
Proceeds from maturity or sales on available-for-sale securities	2,281		1,780
Principal repayments on available-for-sale securities	1,997		2,153
Purchases of available-for-sale securities	(2,319)		(10,415)
(Purchases) Redemptions of FRB stock	(103)		104
Redemptions (purchases) of FHLB stock	631		(4,198)
Origination of loans receivable	(23,081)		(132,611)
Purchases of loans receivable	(86)		(16,443)
Payments received on loans receivable	92,039		61,343
Purchases of premises and equipment	(91)		(230)
Proceeds from sale of premises and equipment	13		—
Net cash provided by (used in) investing activities	71,281		(98,517)
Cash Flows from Financing Activities:
(Decrease) increase in deposits, net	(39,409)		2,933
(Decrease) increase in FHLB, FRB and correspondent bank borrowings	(14,100)		122,000
Principal repayments of note payable	(106)		(104)
Increase in advances from borrowers for taxes and insurance	1,604		2,208
Net cash (used in) provided by financing activities	(52,011)		127,037
Net increase in cash, cash equivalents and restricted cash	27,116		32,316
Cash, cash equivalents and restricted cash at beginning of period	66,536		38,493
Cash, cash equivalents and restricted cash at end of period	$	93,652	$	70,809

8

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued)

(In thousands)	Six Months Ended June 30,
	2024		2023
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	14,832	$	12,609
Cash paid for income taxes	$	500	$	44
Non-cash transactions:
Net change in unrealized loss on available-for-sale securities	$	541	$	394
Transfers of loans held for sale to loans receivable	$	5,526	$	—
Transfers of loans receivable to loans held for sale	$	(4,339)	$	—
Capitalized servicing assets	$	74	$	58
Operating lease right-of-use assets / liabilities	$	138	$	16
Decrease in interest rate swaps	$	21	$	41
Increase in other assets for premises and equipment	$	71	$	—
Expected credit loss for loans - ASC 326 adoption	$	—	$	13,001
Expected credit loss for unfunded loan commitments - ASC 326 adoption	$	—	$	2,737
Deferred tax assets - ASC 326 adoption	$	—	$	(4,228)

See Accompanying Notes to Consolidated Financial Statements.

9

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Unaudited)

Note 1.    Basis of Financial Statement Presentation

The accompanying unaudited interim condensed Consolidated Financial Statements of Patriot National Bancorp, Inc. (the “Company” or “PNBK”) and its wholly-owned subsidiaries, Patriot Bank, N.A. (the “Bank”), Patriot National Statutory Trust I and PinPat Acquisition Corporation (collectively, “Patriot”), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted. The accompanying unaudited interim condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included on the Annual Report on Form 10-K for the year ended December 31, 2023.

The Consolidated Balance Sheet at December 31, 2023 presented herein has been derived from the audited Consolidated Financial Statements of the Company at that date, but does not include all of the information and footnotes required by US GAAP for complete financial statements.

The preparation of consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates. Management has identified accounting for the allowance for credit losses, the analysis and valuation of its investment securities, the valuation of deferred tax assets, the valuation of derivatives, and the valuation of servicing assets as certain of the Company’s more significant accounting policies and estimates, in that they are critical to the presentation of the Company’s consolidated financial condition and results of operations. As they concern matters that are inherently uncertain, these estimates require management to make subjective and complex judgments in the preparation of the Company’s Consolidated Financial Statements.

The information furnished reflects, in the opinion of management, all normal recurring adjustments necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results of operations that may be expected for the remainder of 2024.

Certain prior period amounts have been reclassified to conform to current year presentation.

Note 2.    Summary of Significant Accounting Policies

Please refer to the summary of Significant Accounting Policies included in the Company’s 2023 Annual Report on Form 10-K for a list of all policies in effect as of December 31, 2023.

Recently Issued Accounting Standards

Recently issued Accounting Pronouncements not yet Adopted

ASU 2023-06

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in this Update modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years later. The amendments in this Update should be applied prospectively. For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The adoption of ASU 2023-06 is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures. The Company will continue to monitor for SEC action, and plan accordingly for adoption.

10

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

ASU 2023-07

In November, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Additionally, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and define other disclosure requirements. A public entity must apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this standard is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures.

ASU 2023-09

In December 2023, the FASB issued ASU 2023‑09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires more detailed disclosures of income taxes paid net of refunds received, income from continuing operations before income tax expense or benefit, and income tax expense from continuing operations. This standard is to be applied on a prospective basis, with retrospective application permitted, and will be effective for the Company for annual periods beginning on January 1, 2025. We do not expect adoption of this standard to have a material impact on the Company’s Consolidated Financial Statements but will likely result in additional disclosures.

Note 3.    Available-for-Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale securities at June 30, 2024 and December 31, 2023 are as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	79,854	$	—	$	(15,567)	$	64,287
Corporate bonds	17,996		—		(4,113)		13,883
Subordinated notes	5,000		—		(673)		4,327
SBA loan pools	4,733		—		(1,030)		3,703
Municipal bonds	558		—		(91)		467
Total available-for-sale securities	$	108,141	$	—	$	(21,474)	$	86,667
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	80,500	$	—	$	(14,829)	$	65,671
Corporate bonds	17,995		—		(4,229)		13,766
Subordinated notes	5,000		—		(773)		4,227
SBA loan pools	6,002		—		(965)		5,037
Municipal bonds	559		—		(73)		486
Total available-for-sale securities	$	110,056	$	—	$	(20,869)	$	89,187

11

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following table presents the available-for-sale securities’ gross unrealized losses and fair value, aggregated by the length of time the individual securities have been in a continuous loss position as of June 30, 2024 and December 31, 2023:

(In thousands)	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	4,236	$	(132)	$	60,051	$	(15,435)	$	64,287	$	(15,567)
Corporate bonds	—		—		13,883		(4,113)		13,883		(4,113)
Subordinated notes	—		—		4,327		(673)		4,327		(673)
SBA loan pools	—		—		3,703		(1,030)		3,703		(1,030)
Municipal bonds	—		—		467		(91)		467		(91)
Total available-for-sale securities	$	4,236	$	(132)	$	82,431	$	(21,342)	$	86,667	$	(21,474)
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	9,984	$	(286)	$	55,687	$	(14,543)	$	65,671	$	(14,829)
Corporate bonds	—		—		13,766		(4,229)		13,766		(4,229)
Subordinated notes	—		—		4,227		(773)		4,227		(773)
SBA loan pools	—		—		5,037		(965)		5,037		(965)
Municipal bonds	—		—		486		(73)		486		(73)
Total available-for-sale securities	$	9,984	$	(286)	$	79,203	$	(20,583)	$	89,187	$	(20,869)

As of June 30, 2024 and December 31, 2023, forty-nine of forty-nine and fifty of fifty available-for-sale securities had unrealized losses with an aggregate decline of (19.9)% and (19.0)% from the amortized cost of those securities, respectively.

At June 30, 2024, no allowance for credit losses has been recognized on available for sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available for sale debt securities. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities. The Company does not intend to sell these debt securities and it is more likely than not that the Company will not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity. The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased.

With regard to U.S. mortgage-backed securities and municipal bonds issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities.

With regard to corporate bonds, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, and (iv) internal forecasts. Securities under the U.S. Small Business Administration (“SBA”) government guaranteed loan pools program were purchased at a premium and the impairment was attributable primarily to increased prepayment speeds. The timely payment of principal and interest on these securities is guaranteed by the U.S. Government agency. The contractual terms of the subordinated notes do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Furthermore, as of June 30, 2024, there were no past due principal or interest payments associated with these securities. Based upon (i) the issuer’s strong bond ratings and (ii) a zero historical loss rate, no allowance for credit losses has been recorded for available-for-sale securities at June 30, 2024. All debt securities in an unrealized loss position as of June 30, 2024 continue to perform as scheduled and the Company does not believe there is a possible credit loss or that an allowance for credit loss on these debt securities is necessary.

12

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

As of June 30, 2024 and December 31, 2023, available-for-sale securities of $63.9 million and $68.5 million, respectively, were pledged to the Federal Home Loan Bank ("FHLB") and Federal Reserve Bank (“FRB”). The securities were pledged primarily to secure borrowings from the FHLB and FRB.

The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of June 30, 2024 and December 31, 2023. The mortgages underlying the mortgage-backed securities are not due at a single maturity date. Additionally, these mortgages often are and generally may be pre-paid without penalty, creating a degree of uncertainty that such investments can be held until maturity. For convenience, mortgage-backed securities have been included in the summary as a separate line item.

(In thousands)	Amortized Cost								Fair Value
	Due Within 5 years		Due After 5 years through 10 years		Due After 10 years		Total		Due Within 5 years		Due After 5 years through 10 years		Due After 10 years		Total
June 30, 2024:
Corporate bonds	$	2,000	$	15,996	$	—	$	17,996	$	1,957	$	11,926	$	—	$	13,883
Subordinated notes	3,000		2,000		—		5,000		2,550		1,777		—		4,327
SBA loan pools	—		—		4,733		4,733		—		—		3,703		3,703
Municipal bonds	153		405		—		558		136		331		—		467
Available-for-sale securities with stated maturity dates	5,153		18,401		4,733		28,287		4,643		14,034		3,703		22,380
U. S. Government agency and mortgage-backed securities	—		5,184		74,670		79,854		—		4,109		60,178		64,287
Total available-for-sale securities	$	5,153	$	23,585	$	79,403	$	108,141	$	4,643	$	18,143	$	63,881	$	86,667
December 31, 2023:
Corporate bonds	$	2,000	$	15,995	$	—	$	17,995	$	1,947	$	11,819	$	—	$	13,766
Subordinated notes	3,000		2,000		—		5,000		2,527		1,700		—		4,227
SBA loan pools	—		1,096		4,906		6,002		—		1,084		3,953		5,037
Municipal bonds	153		406		—		559		140		346		—		486
Available-for-sale securities with stated maturity dates	5,153		19,497		4,906		29,556		4,614		14,949		3,953		23,516
U. S. Government agency and mortgage-backed securities	—		5,222		75,278		80,500		—		4,237		61,434		65,671
Total available-for-sale securities	$	5,153	$	24,719	$	80,184	$	110,056	$	4,614	$	19,186	$	65,387	$	89,187

13

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Note 4.    Loans Receivable and Allowance for Credit Losses

As of June 30, 2024 and December 31, 2023, loans receivable, net, consisted of the following:

(In thousands)	June 30, 2024		December 31, 2023
Loan portfolio segment:
Commercial Real Estate	$	458,556	$	472,093
Residential Real Estate	99,419		106,783
Commercial and Industrial	134,744		163,565
Consumer and Other	77,397		99,688
Construction	3,829		4,266
Construction to Permanent - CRE	2,357		2,464
Loans receivable, gross	776,302		848,859
Allowance for credit losses	(14,989)		(15,925)
Loans receivable, net	$	761,313	$	832,934

Patriot's lending activities are conducted principally in Fairfield and New Haven Counties in Connecticut and Westchester County in New York, and the five Boroughs of New York City. Patriot originates commercial real estate loans, commercial business loans, a variety of consumer loans, and construction loans, and has purchased residential loans since 2016. All 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 is dependent to some degree on the status of the regional economy as well as upon the regional real estate market. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio and the recovery of a substantial portion of any resulting real estate acquired is susceptible to changes in market conditions.

Patriot has established credit policies applicable to each type of lending activity in which it engages and evaluates the creditworthiness of each borrower. Unless extenuating circumstances exist, Patriot limits the extension of credit on commercial real estate loans to 75% of the market value of the underlying collateral. Patriot’s loan origination policy for multi-family residential real estate is limited to 80% of the market value of the underlying collateral. In the case of construction loans, the maximum loan-to-value is 75% of the “as completed” appraised value of the real estate project. Management monitors the appraised value of collateral on an on-going basis and additional collateral is requested when warranted. Real estate is the primary form of collateral, although other forms of collateral do exist and may include such assets as accounts receivable, inventory, marketable securities, time deposits, and other business assets.

Risk characteristics of the Company’s portfolio classes include the following:

Commercial Real Estate Loans

In underwriting commercial real estate loans, Patriot evaluates both the prospective borrower’s ability to make timely payments on the loan and the value of the property securing the loans. Repayment of such loans may be negatively impacted should the borrower default, the value of the property collateralizing the loan substantially decline, or there are declines in general economic conditions. Where the owner occupies the property, Patriot also evaluates the business’ ability to repay the loan on a timely basis and may require personal guarantees, lease assignments, and/or the guarantee of the operating company.

During the three and six months ended June 30, 2024 and 2023, Patriot did not purchase any commercial real estate loans.

Residential Real Estate Loans

Patriot’s residential real estate loan portfolio consists primarily of purchased residential loans. The repayment of residential real estate loans, as well as the loans secured by residential real estate, may be negatively impacted if borrowers experience financial difficulties, if there is a significant decline in the value of the property securing the loan, or if there are declines in general economic conditions. In addition, during the second quarter of 2024 Patriot began originating mortgage loans through its mortgage origination unit based Jacksonville, Florida. During the three and six months ended June 30, 2024, Patriot purchased $38,000 and $86,000 residential real estate loans, respectively. During the three and six months ended 2023, Patriot did not purchase any residential real estate loans.

14

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Commercial and Industrial Loans

Patriot’s commercial and industrial loan portfolio consists primarily of commercial business loans and lines of credit to businesses and professionals. These loans are generally for the financing of accounts receivable, purchases of inventory, purchases of new or used equipment, or for other short- or long-term working capital purposes. These loans are generally secured by business assets but are also occasionally offered on an unsecured basis. In granting these types of loans, Patriot considers the borrower’s cash flow as the primary source of repayment, supported by the value of collateral, if any, and personal guarantees, as applicable. Repayment of commercial and industrial loans may be negatively impacted by adverse changes in economic conditions, ineffective management, claims on the borrower’s assets by others that are superior to Patriot’s claims, a loss of demand for the borrower’s products or services, or the death or disability of the borrower or other key management personnel.

Patriot’s syndicated and leveraged loan portfolio totaled $5.7 million at both June 30, 2024 and December 31, 2023. The syndicated and leveraged loan is included in the commercial and industrial loan classification and is comprised of loan transaction led by a major financial institution, which is the Agent Bank or Lead Arranger, and is referred to as a syndicated loan or "Shared National Credit (SNC)". The SNC loan was determined to be complementary to the Bank’s existing commercial and industrial loan portfolio and product offerings. Further originations in this loan class are not expected.

Consumer and Other Loans

Patriot offers individual consumers various forms of credit including installment loans, credit cards, overdraft protection, auto loans and reserve lines of credit. Repayments of such loans are generally dependent on the personal income of the borrower, which may be negatively impacted by adverse changes in economic conditions. The Company does not place a high emphasis on originating these types of loans.

The Company has purchased unsecured consumer loans from a third party which are higher yielding loans of 2-5 year terms that are expected to incur an increased level of charge-offs. Loans outstanding under this program at June 30, 2024 and December 31, 2023 totaled $32.3 million and $48.5 million, respectively. No loans were purchased under this program for three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, the Bank purchased $4.3 million and $13.6 million unsecured consumer loans, respectively.

The Company does not originate any lending programs commonly referred to as subprime lending. Subprime lending generally targets borrowers with weakened credit histories that are typically characterized by payment delinquencies, previous charge-offs, judgments against the consumer, a history of bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burdened ratios.

During the three and six months ended June 30, 2024, Patriot did not purchase any home equity line of credit loans (“HELOC”). During the three and six months ended June 30, 2023, the Bank purchased HELOC loans of $1.5 million and $2.9 million, respectively.

Construction Loans

Construction loans are of a short-term nature, generally of eighteen months or less, that are secured by land and improvements intended for commercial, residential, or mixed-use development. Loan proceeds may be used for the acquisition of or improvements to the land under development and funds are generally disbursed as phases of construction are completed.

Included in this category are loans to construct single family homes where no contract of sale exists, based upon the experience and financial strength of the builder, the type and location of the property, and other factors. Construction loans tend to be personally guaranteed by the principal(s). Repayment of such loans may be negatively impacted by an inability to complete construction, a downturn in the market for new construction, by a significant increase in interest rates, or by decline in general economic conditions. The construction loans outstanding at June 30, 2024 and December 31, 2023 totaled $3.8 million and $4.3 million, respectively.

15

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Construction to Permanent - Commercial Real Estate ("CRE")

Construction to permanent loans represent a one-time close of a construction facility with simultaneous conversion to an amortizing mortgage loan. Construction to permanent loans combine a short-term period similar to a construction loan, generally with a variable rate, and a longer term commercial real estate loan typically 20-25 years, resetting every five years to the Federal Home Loan Bank (“FHLB”) rate.

Close of the permanent facility typically occurs when events dictate, such as receipt of a certificate of occupancy and property stabilization, which is defined as cash flow sufficient to support a pre-defined minimum debt coverage ratio and other conditions and covenants particular to the loan. Construction facilities are typically variable rate instruments that, upon conversion to an amortizing mortgage loan, reset to a fixed rate instrument that is the greater of the in-force variable rate plus a predetermined spread over a reference rate (e.g., prime) or a minimum interest rate.

SBA Loans

Patriot originates SBA 7(a) loans, on which the SBA has historically provided guarantees of 75% of the principal balance. However, during the pandemic in 2021, the SBA temporarily increased the guarantees to 90% and reverted to 75% on October 1, 2021. The guaranteed portion of the Company’s SBA loans is generally sold in the secondary market with the unguaranteed portion held in the portfolio as a loan held for investment. SBA loans are for the purpose of providing working capital, financing the purchase of equipment, inventory, or commercial real estate and for other business purposes. Loans are guaranteed by the businesses' major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. SBA loans held for investment are included in the commercial real estate loans and commercial and industrial loan classifications, which totaled $31.8 million and $30.0 million as of June 30, 2024 and December 31, 2023, respectively. During the six months ended June 30, 2024, $5.5 million SBA loans previously classified as held for sale were transferred to held for investment. No held for sale SBA loans were transferred to held for investment during the six months ended June 30, 2023.

Small Business Administration Paycheck Protection Program

Under the Paycheck Protection Program of the CARES Act, small business loans were authorized to pay payroll and group health costs, salaries and commissions, mortgage and rent payments, utilities, and interest on other debt. The loans are provided through participating financial institutions that process loan applications and service the loans. The Bank participated in the SBA’s Paycheck Protection Program in 2021. Paycheck Protection Program loans totaled $131,000 and $133,000 as of June 30, 2024 and December 31, 2023, respectively, which are included in the commercial and industrial loan classifications.

16

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Allowance for Credit Losses

The Company adopted ASU 2016-13 on January 1, 2023, which introduced the current expected credit loss ("CECL") methodology for estimating all expected losses over the life of a financial asset. Under the CECL methodology, the ACL is measured on a collective basis for pools of loans with similar risk characteristics. For loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. For all loan segments collectively evaluated, losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable forecast period losses are reverted to long-term historical averages. The estimated credit losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.

The Company estimates expected credit losses for pooled loans using a modeling method that incorporates probability of default and loss given default. The PD model employs a quarterly risk-rating transition method to estimate the probability of default by simulating loan downgrades and assigning increasing default probabilities to each loan. This captures the likelihood that borrowers will be unable to repay their loans according to the original terms. The LGD calculation considers characteristics such as collateral value and vintage, underlying collateral characteristics (e.g., CRE vs. residential, owner-occupied vs. investment), a floor for the LGD calculation (minimum loss in event of default regardless of collateral protection), and other relevant underwriting characteristics. Also calculated is the exposure at default. The probability of default is multiplied by the loss given default and the exposure at default. This calculation is forecasted for every year remaining in the life of each loan, and the results are aggregated to determine the necessary level of ACL for the pooled loans. Forecasted exposure at default can be influenced by prepayments speeds, which management elected to discount in part to reflect the expectation of slower voluntary prepayments in the face of an increasing interest rate environment.

Commercial and industrial loans include risks associated with borrower’s cash flow, debt service coverage and management’s expertise. These loans are subject to the risk that the Company may have difficulty converting collateral to a liquid asset if necessary, as well as risks associated with degree of specialization, mobility and general collectability in a default situation. These commercial loans may be subject to many different types of risks, including fraud, bankruptcy, economic downturn, deteriorated or non-existent collateral, and changes in interest rates.

Real estate construction loans include risks associated with the borrower’s credit-worthiness, contractor’s qualifications, borrower and contractor performance, and the overall risk and complexity of the proposed project. Construction lending is also subject to risks associated with sub-market dynamics, including population, employment trends and household income. During times of economic stress, this type of loan has typically had a greater degree of risk than other loan types.

Real estate mortgage loans consist of loans secured by commercial and residential real estate. Commercial real estate lending is divided into Investment CRE and Owner-Occupied CRE. Investment CRE is dependent upon 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 is utilized by a business for the purpose of providing the space needs for that business and the running of its operations. Repayment is dependent on the cash flow and successful operations of the business. Repayment of these loans may be adversely affected by conditions in the specific owner’s industry. Also, commercial real estate loans typically involve relatively large loan balances to a single borrower. Residential real estate lending risks are generally less significant than those of other loans. Real estate lending risks include fluctuations in the value of real estate, bankruptcies, economic downturn and customer financial problems.

Consumer loans carry a moderate degree of risk compared to other loans. They are generally more risky than traditional residential real estate loans, and carry generally low relative balances across a diverse borrowing pool. Risk of default is assessed based on FICO scores, debt to income ratios, historical loss rates other common consumer loan metrics. For the pool of purchased unsecured consumer loans, the risk of default and necessary ACL is assessed on an individual loan basis using a customized model that heavily weights payment/delinquency status, FICO scores, and remaining loan life until maturity.

The Company maintains an ACL for credit losses on unfunded lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a drawdown on the commitment. The ACL on unfunded loan commitments is classified as a liability account on the Consolidated Balance Sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of provision for credit losses. The allowance for credit losses on unfunded commitments was $235,000 at June 30, 2024 and $271,000 at December 31, 2023, respectively.

17

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following tables summarize the activity in the allowance for credit losses, allocated to segments of the loan portfolio, for the three and six months ended June 30, 2024 and 2023:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
Three Months Ended June 30, 2024
Allowance for credit losses:
March 31, 2024	$	5,620	$	671	$	1,199	$	6,280	$	7	$	—	$	—	$	13,777
Charge-offs	—		—		(404)		(1,849)		—		—		—		(2,253)
Recoveries	—		—		72		260		—		—		—		332
Provisions (credits)	2,338		7		348		442		(2)		—		—		3,133		(1)
June 30, 2024	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	—	$	14,989
Three Months Ended June 30, 2023
Allowance for credit losses:
March 31, 2023	$	9,809	$	853	$	1,799	$	12,251	$	21	$	47	$	—	$	24,780
Charge-offs	—		—		(4)		(2,516)		(150)		—		—		(2,670)
Recoveries	—		11		9		260		—		—		—		280
Provisions (credits)	230		163		(131)		1,280		162		4		—		1,708		(2)
June 30, 2023	$	10,039	$	1,027	$	1,673	$	11,275	$	33	$	51	$	—	$	24,098

(1) The provision on credit losses included in the above table for the three months ended June 30, 2024 does not include the credit on unfunded loan commitments of $41,000.

(2) The provision on credit losses included in the above table for the three months ended June 30, 2023 does not include the credit on unfunded loan commitments of $383,000.

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
Six Months Ended June 30, 2024
Allowance for credit losses:
December 31, 2023	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	—	$	15,925
Impact of ASC 326 Adoption	—		—		—		—		—		—		—		—
Charge-offs	(158)		(21)		(814)		(4,372)		—		—		—		(5,365)
Recoveries	—		—		78		565		—		—		—		643
Provisions (credits)	2,027		92		682		1,097		1		(113)		—		3,786		(3)
June 30, 2024	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	—	$	14,989
Six Months Ended June 30, 2023
Allowance for credit losses:
December 31, 2022	$	6,966	$	665	$	1,403	$	1,207	$	24	$	10	$	35	$	10,310
Charge-offs	—		—		(6)		(4,312)		(150)		—		—		(4,468)
Recoveries	—		11		16		433		—		—		—		460
Provisions (credits)	1,447		162		41		2,970		163		12		—		4,795		(4)
June 30, 2023	$	10,039	$	1,027	$	1,673	$	11,275	$	33	$	51	$	—	$	24,098

(3) The provision on credit losses for the six months ended June 30, 2024 does not include the credit on unfunded loan commitments of $36,000.

(4) The provision on credit losses for the six months ended June 30, 2023 does not include the credit on unfunded loan commitments of $1.3 million.

18

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following tables summarize, by loan portfolio segment, the amount of loans receivable evaluated individually and collectively for impairment as of June 30, 2024:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to  Permanent  - CRE		Total
June 30, 2024
Allowance for credit losses:
Individually evaluated loans	$	5,717	$	—	$	—	$	—	$	—	$	—	$	5,717
Collectively evaluated loans	2,241		678		1,215		5,133		5		—		9,272
Total allowance for credit losses	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	14,989
Loans receivable, gross:
Individually evaluated loans	$	27,675	$	172	$	5,686	$	—	$	—	$	2,357	$	35,890
Collectively evaluated loans	430,881		99,247		129,058		77,397		3,829		—		740,412
Total loans receivable, gross	$	458,556	$	99,419	$	134,744	$	77,397	$	3,829	$	2,357	$	776,302

The following tables presents the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment based on impairment method as of December 31, 2023:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Total
December 31, 2023
Allowance for credit losses:
Individually evaluated for impairment	$	3,813	$	—	$	392	$	—	$	—	$	—	$	4,205
Collectively evaluated for impairment	2,276		607		877		7,843		4		113		11,720
Total allowance for credit losses	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	15,925
Loans receivable, gross:
Individually evaluated for impairment	$	12,775	$	—	$	3,904	$	—	$	454	$	—	$	17,133
Collectively evaluated for impairment	459,318		106,783		159,661		99,688		3,812		2,464		831,726
Total loans receivable, gross	$	472,093	$	106,783	$	163,565	$	99,688	$	4,266	$	2,464	$	848,859

Patriot monitors the credit quality of its loans receivable on an ongoing basis. Credit quality is monitored by reviewing certain indicators, including cash flow from business operations, loan to value ratios, debt service coverage ratios, and credit scores.

Patriot employs a risk rating system as part of the risk assessment of its loan portfolio. At origination, credit officers are required to assign a risk rating to each loan in their portfolio, which is ratified or modified by the Loan Committee to which the loan is submitted for approval. If financial developments occur on a loan in the credit officer’s portfolio of responsibility, the risk rating is reviewed and adjusted, as applicable. In carrying out its oversight responsibilities, the Loan Committee can adjust a risk rating based on available information. In addition, the risk ratings on all commercial loans over $250,000 are reviewed by the Credit Department either annually or biannually, or every 4 years, depending upon the amount of the bank’s exposure and other credit metrics.

Additionally, Patriot retains an independent third-party loan review firm to perform a semi-annual analysis of the results of its risk rating process. The semi-annual review is based on a randomly selected sample of loans within established parameters (e.g., value, concentration), in order to assess and validate the risk ratings assigned to individual loans. Any changes to the assigned risk ratings, based on the semi-annual review, are required to be reported to the Audit Committee of the Board of Directors.

19

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

When assigning a risk rating to a loan, management utilizes the Bank’s internal eleven-point risk rating system. An asset is considered “special mention” when it has a potential weakness based on objective evidence, but does not currently expose the Company to sufficient risk to warrant classification in one of the following categories:

•Substandard: An asset is classified “substandard” if it is not adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Substandard assets have well defined weaknesses based on objective evidence, and are characterized by the distinct possibility that the Company will sustain some loss, if noted deficiencies are not corrected.

•Doubtful: Assets classified as “doubtful” have all of the weaknesses inherent in those classified as “substandard”, with the added characteristic that the identified weaknesses make collection or liquidation-in-full improbable, on the basis of currently existing facts, conditions, and values.

Charge-offs of loans to reduce the loan to its recoverable value that are solely collateral dependent, generally occur immediately upon confirmation of the partial loss amount. Loans that are cash flow dependent are modeled to reflect the expected cash flows through expected loan maturity, including any proceeds from refinancing or principal curtailment. A specific reserve is established for the amount by which the net investment in the loan exceeds the present value of discounted cash flows. Charge-offs on cash flow dependent loans also generally occur immediately upon confirmation of the partial loss amount. If either type of loan is classified as "Loss”, meaning full loss on the loan is expected, the full balance of the loan receivable is charged off, regardless of the potential recovery from a sale of the underlying collateral. Any amount that may be recovered on the sale of collateral underlying a loan is recognized as a “recovery” in the period in which the collateral is sold. In accordance with Federal Financial Institutions Examination Council published policies establishing uniform criteria for the classification of retail credit based on delinquency status, “Open-end” and “Closed-end” credits are charged off when 180 days and 90 days delinquent, respectively. Loans receivable that are part of the unsecured loan purchase program are charged-off in full when the loan is 90 days past due.

The allowance for credit losses may increase to reflect the decline in the performance of the loan portfolio and the higher level of incurred losses.

20

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Loan Portfolio Vintage Analysis

The following tables summarize loan amortized cost by vintage, credit quality indicator, class of loans and charge-offs based on year of origination as of June 30, 2024:

	Term of Loans by Origination
As of June 30, 2024:	2024		2023		2022		2021		2020		Prior		Revolving		Total Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	107,117	$	139,305	$	96,020	$	3,354	$	76,706	$	—	$	422,502
Special mention	—		—		6,461		901		—		445		—		7,807
Substandard	—		—		3,002		13,276		279		11,690		—		28,247
Total	—		107,117		148,768		110,197		3,633		88,841		—		458,556
Current period gross charge-offs	—		—		—		—		—		158		—		158
Residential Real Estate:
Pass	—		—		1,235		2,851		10,344		81,518		700		96,648
Special mention	—		—		—		—		1,053		1,416		—		2,469
Substandard	—		—		—		—		—		302		—		302
Total	—		—		1,235		2,851		11,397		83,236		700		99,419
Current period gross charge-offs	—		—		—		—		—		21		—		21
Commercial and Industrial:
Pass	678		1,591		14,917		21,394		1,064		8,215		77,076		124,935
Special mention	—		5		19		40		—		968		—		1,032
Substandard	—		268		622		844		5,725		1,214		104		8,777
Total	678		1,864		15,558		22,278		6,789		10,397		77,180		134,744
Current period gross charge-offs	—		—		—		—		—		814		—		814
Consumer and Other:
Pass	25		4,053		24,814		2,986		—		18,170		26,084		76,132
Substandard	—		112		386		23		—		429		315		1,265
Total	25		4,165		25,200		3,009		—		18,599		26,399		77,397
Current period gross charge-offs	—		185		3,812		375		—		—		—		4,372
Construction:
Pass	—		—		—		3,829		—		—		—		3,829
Total	—		—		—		3,829		—		—		—		3,829
Construction to Permanent - CRE:
Substandard	—		—		—		2,357		—		—		—		2,357
Total	—		—		—		2,357		—		—		—		2,357
Total loans	$	703	$	113,146	$	190,761	$	144,521	$	21,819	$	201,073	$	104,279	$	776,302
Total Current period gross charge-offs	$	—	$	185	$	3,812	$	375	$	—	$	993	$	—	$	5,365
Loans receivable, gross:
Pass	$	703	$	112,761	$	180,271	$	127,080	$	14,762	$	184,609	$	103,860	$	724,046
Special mention	—		5		6,480		941		1,053		2,829		—		11,308
Substandard	—		380		4,010		16,500		6,004		13,635		419		40,948
Total Loans receivable, gross	$	703	$	113,146	$	190,761	$	144,521	$	21,819	$	201,073	$	104,279	$	776,302
Current period gross charge-offs	$	—	$	185	$	3,812	$	375	$	—	$	993	$	—	$	5,365

21

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following tables summarize loan amortized cost by vintage, credit quality indicator, class of loans and charge-offs based on year of origination as of December 31, 2023:

	Term of Loans by Origination
As of December 31, 2023:	2023		2022		2021		2020		2019		Prior		Revolving		Total Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	104,683	$	138,091	$	111,308	$	3,401	$	31,832	$	63,526	$	—	$	452,841
Special mention	—		6,482		—		—		—		—		—		6,482
Substandard	—		1,799		—		280		10,000		691		—		12,770
Total	104,683		146,372		111,308		3,681		41,832		64,217		—		472,093
Current period gross charge-offs	—		—		—		—		6,341		5		—		6,346
Residential Real Estate:
Pass	—		1,251		2,975		11,577		15,770		74,596		614		106,783
Total	—		1,251		2,975		11,577		15,770		74,596		614		106,783
Current period gross charge-offs	—		—		—		—		—		515		—		515
Commercial and Industrial:
Pass	2,696		13,916		23,099		8,004		9,578		7,024		96,431		160,748
Special mention	6		348		—		—		37		11		104		506
Substandard	16		—		801		—		401		1,093		—		2,311
Total	2,718		14,264		23,900		8,004		10,016		8,128		96,535		163,565
Current period gross charge-offs	—		182		85		—		516		144		—		927
Consumer and Other:
Pass	6,470		36,668		4,724		—		5,590		14,314		30,945		98,711
Substandard	197		645		61		—		—		—		74		977
Total	6,667		37,313		4,785		—		5,590		14,314		31,019		99,688
Current period gross charge-offs	114		9,013		1,280		—		6		66		—		10,479
Construction:
Pass	—		—		3,812		—		—		—		—		3,812
Substandard	—		—		—		—		454		—		—		454
Total	—		—		3,812		—		454		—		—		4,266
Current period gross charge-offs	—		—		150		—		—		—		—		150
Construction to Permanent - CRE:
Special mention	—		—		2,464		—		—		—		—		2,464
Total	—		—		2,464		—		—		—		—		2,464
Total loans	$	114,068	$	199,200	$	149,244	$	23,262	$	73,662	$	161,255	$	128,168	$	848,859
Total Current period gross charge-offs	$	114	$	9,195	$	1,515	$	—	$	6,863	$	730	$	—	$	18,417
Loans receivable, gross:
Pass	$	113,849	$	189,926	$	145,918	$	22,982	$	62,770	$	159,460	$	127,990	$	822,895
Special mention	6		6,830		2,464		—		37		11		104		9,452
Substandard	213		2,444		862		280		10,855		1,784		74		16,512
Loans receivable, gross	$	114,068	$	199,200	$	149,244	$	23,262	$	73,662	$	161,255	$	128,168	$	848,859
Total Current period gross charge-offs	$	114	$	9,195	$	1,515	$	—	$	6,863	$	730	$	—	$	18,417

22

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Loan Portfolio Aging Analysis

The following tables summarize performing and non-performing (i.e., non-accruing) loans receivable by portfolio segment, by aging category, by delinquency status as of June 30, 2024.

(In thousands)	Performing (Accruing) Loans
As of June 30, 2024:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	7,540	$	6,748	$	—	$	14,288	$	404,989	$	419,277	$	3,225	$	422,502
Special mention	901		—		—		901		6,906		7,807		—		7,807
Substandard	589		—		1,178		1,767		2,029		3,796		24,451		28,247
	9,030		6,748		1,178		16,956		413,924		430,880		27,676		458,556
Residential Real Estate:
Pass	177		33		—		210		96,438		96,648		—		96,648
Special mention	—		—		—		—		2,469		2,469		—		2,469
Substandard	—		—		—		—		—		—		302		302
	177		33		—		210		98,907		99,117		302		99,419
Commercial and Industrial:
Pass	1,112		—		—		1,112		119,856		120,968		3,967		124,935
Special mention	—		—		—		—		1,032		1,032		—		1,032
Substandard	481		514		—		995		5,978		6,973		1,804		8,777
	1,593		514		—		2,107		126,866		128,973		5,771		134,744
Consumer and Other:
Pass	1,002		423		—		1,425		74,707		76,132		—		76,132
Substandard	—		—		—		—		—		—		1,265		1,265
	1,002		423		—		1,425		74,707		76,132		1,265		77,397
Construction:
Pass	—		—		—		—		3,829		3,829		—		3,829
Substandard	—		—		—		—		—		—		—		—
	—		—		—		—		3,829		3,829		—		3,829
Construction to Permanent - CRE:
Substandard	—		—		—		—		—		—		2,357		2,357
	—		—		—		—		—		—		2,357		2,357
Total	$	11,802	$	7,718	$	1,178	$	20,698	$	718,233	$	738,931	$	37,371	$	776,302
Loans receivable, gross:
Pass	$	9,831	$	7,204	$	—	$	17,035	$	699,819	$	716,854	$	7,192	$	724,046
Special mention	901		—		—		901		10,407		11,308		—		11,308
Substandard	1,070		514		1,178		2,762		8,007		10,769		30,179		40,948
Loans receivable, gross	$	11,802	$	7,718	$	1,178	$	20,698	$	718,233	$	738,931	$	37,371	$	776,302

23

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following tables summarize performing and non-performing loans (i.e., non-accruing) receivable by portfolio segment, by aging category, by delinquency status as of December 31, 2023.

(In thousands)	Performing (Accruing) Loans
As of December 31, 2023:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	2,274	$	231	$	—	$	2,505	$	448,707	$	451,212	$	1,629	$	452,841
Special mention	—		—		—		—		6,482		6,482		—		6,482
Substandard	—		—		—		—		1,624		1,624		11,146		12,770
	2,274		231		—		2,505		456,813		459,318		12,775		472,093
Residential Real Estate:
Pass	1,439		—		—		1,439		105,344		106,783		—		106,783
	1,439		—		—		1,439		105,344		106,783		—		106,783
Commercial and Industrial:
Pass	420		10		—		430		157,335		157,765		2,983		160,748
Special mention	—		348		—		348		158		506		—		506
Substandard	526		—		—		526		847		1,373		938		2,311
	946		358		—		1,304		158,340		159,644		3,921		163,565
Consumer and Other:
Pass	1,327		1,015		341		2,683		96,028		98,711		—		98,711
Substandard	—		—		—		—		—		—		977		977
	1,327		1,015		341		2,683		96,028		98,711		977		99,688
Construction:
Pass	—		—		—		—		3,812		3,812		—		3,812
Substandard	—		—		—		—		—		—		454		454
	—		—		—		—		3,812		3,812		454		4,266
Construction to Permanent - CRE:
Special mention	—		—		—		—		2,464		2,464		—		2,464
	—		—		—		—		2,464		2,464		—		2,464
Total	$	5,986	$	1,604	$	341	$	7,931	$	822,801	$	830,732	$	18,127	$	848,859
Loans receivable, gross:
Pass	$	5,460	$	1,256	$	341	$	7,057	$	811,226	$	818,283	$	4,612	$	822,895
Special mention	—		348		—		348		9,104		9,452		—		9,452
Substandard	526		—		—		526		2,471		2,997		13,515		16,512
Loans receivable, gross	$	5,986	$	1,604	$	341	$	7,931	$	822,801	$	830,732	$	18,127	$	848,859

24

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following tables summarize non-performing (i.e., non-accruing) loans by aging category and status, within the applicable loan portfolio segment as of June 30, 2024 and December 31, 2023:

(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of June 30, 2024:
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	1,653	$	1,572	$	3,225	$	—	$	3,225
Substandard	—		581		1,306		1,887		22,564		24,451
Residential Real Estate:
Substandard	—		—		302		302		—		302
Commercial and Industrial:
Pass	—		2,568		906		3,474		493		3,967
Substandard	—		273		1,253		1,526		278		1,804
Consumer and Other:
Substandard	—		—		1,202		1,202		63		1,265
Construction to permanent - CRE:
Substandard	2,357		—		—		2,357		—		2,357
Total non-accruing loans	$	2,357	$	5,075	$	6,541	$	13,973	$	23,398	$	37,371
As of December 31, 2023:
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	—	$	1,629	$	1,629	$	—	$	1,629
Substandard	—		770		439		1,209		9,937		11,146
Commercial and Industrial:
Pass	—		—		2,054		2,054		929		2,983
Substandard	—		371		535		906		32		938
Consumer and Other:
Substandard	—		16		887		903		74		977
Construction:
Substandard	—		—		—		—		454		454
Total non-accruing loans	$	—	$	1,157	$	5,544	$	6,701	$	11,426	$	18,127

The accrual of interest on loans is discontinued at the time the loan is 90 days past due for payment unless the loan is well-secured and in process of collection. Consumer loans are typically charged off when they become 120 days past due (180 days for open ended consumer credit). Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual status or charged-off, at an earlier date, if collection of principal or interest is considered doubtful.

All interest accrued, but not collected for loans that are placed on non-accrual status or charged off, is reversed against interest income. The interest on these loans is generally accounted for on the cash-basis method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, future payments are reasonably assured, after at least six months of timely payment history. The Bank considers loans under $100,000 and consumer installment loans to be pools of smaller homogeneous loan balances, and therefore are collectively evaluated for impairment, and not individually measured for impairment.

25

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

If non-accrual loans had been performing in accordance with the original contractual terms, additional interest income (net of cash collected) of approximately $933,000 and $1.5 million would have been recognized during the three and six months ended June 30, 2024, respectively. During the three and six months ended June 30, 2023, additional interest income (net of cash collected) of approximately $133,000 and $268,000 would have been recognized, respectively.

Interest income collected and recognized on non-accruing loans for the three and six months ended June 30, 2024 was $205,000 and $226,000, respectively. During the three and six months ended June 30, 2023, interest income collected and recognized on non-accruing loans was $193,000 and $336,000, respectively.

Individually Evaluated Loans

The following table reflects information about the individually evaluated loans by class as of June 30, 2024 and December 31, 2023:

(In thousands)	June 30, 2024						December 31, 2023
	Recorded Investment		Principal Outstanding		Related Allowance		Recorded Investment		Principal Outstanding		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	5,111	$	8,111	$	—	$	2,838	$	5,879	$	—
Residential Real Estate	172		171		—		—		—		—
Commercial and Industrial	5,685		10,611		—		2,266		2,899		—
Construction	—		—		—		454		461		—
Construction to permanent - CRE	2,357		2,476		—		—		—		—
	13,325		21,369		—		5,558		9,239		—
With a related allowance recorded:
Commercial Real Estate	22,564		23,197		5,717		9,937		10,137		3,813
Commercial and Industrial	1		1,388		—		1,638		3,159		392
	22,565		24,585		5,717		11,575		13,296		4,205
Individually evaluated loans, Total:
Commercial Real Estate	27,675		31,308		5,717		12,775		16,016		3,813
Residential Real Estate	172		171		—		—		—		—
Commercial and Industrial	5,686		11,999		—		3,904		6,058		392
Construction	—		—		—		454		461		—
Construction to permanent - CRE	2,357		2,476		—		—		—		—
Total	$	35,890	$	45,954	$	5,717	$	17,133	$	22,535	$	4,205

26

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following table summarizes additional information regarding individually evaluated loans by class for the three and six months ended June 30, 2024 and 2023.

	Three Month Ended June 30,								Six Months Ended June 30,
(In thousands)	2024				2023				2024				2023
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	5,107	$	—	$	387	$	—	$	5,108	$	—	$	680	$	—
Residential Real Estate	172		8		748		24		172		8		992		27
Commercial and Industrial	5,026		23		2,046		68		4,513		27		2,181		150
Consumer and Other	—		—		128		—		—		—		293		—
Construction	—		—		579		—		—		—		993		—
Construction to permanent - CRE	2,411		—		—		—		2,433		—		—		—
	12,716		31		3,888		92		12,226		35		5,139		177
With a related allowance recorded:
Commercial Real Estate	22,763		159		10,405		—		22,942		159		10,651		154
Residential Real Estate	—		—		1,352		—		—		—		1,468		—
Commercial and Industrial	217		—		4,052		98		577		—		4,341		139
Consumer and Other	—		—		18		—		—		—		10		—
	22,980		159		15,827		98		23,519		159		16,470		293
Individually evaluated loans, Total:
Commercial Real Estate	27,870		159		10,792		—		28,050		159		11,331		154
Residential Real Estate	172		8		2,100		24		172		8		2,460		27
Commercial and Industrial	5,243		23		6,098		166		5,090		27		6,522		289
Consumer and Other	—		—		146		—		—		—		303		—
Construction	—		—		579		—		—		—		993		—
Construction to permanent - CRE	2,411		—		—		—		2,433		—		—		—
Total	$	35,696	$	190	$	19,715	$	190	$	35,745	$	194	$	21,609	$	470

Credit losses for loans that no longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and estimated on an individual basis (individually evaluated loans). Individual evaluations are performed for nonaccrual loans in excess of $100,000 as well as selected substandard loans. Specific allowances were estimated based on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows.

For collateral dependent loans, appraisal reports of the underlying collateral have been obtained from independent licensed appraisal firms. For non-performing loans, the independently determined appraised values were first reduced by a 5.8% discount to reflect the Bank’s experience selling Other Real Estate Owned ("OREO") properties, and were further reduced by 8% in selling costs, in order to estimate the potential loss, if any, that may eventually be realized. Performing loans are monitored to determine when, if at all, additional credit loss reserves may be required for a loss of underlying collateral value. For cash flow dependent loans, the Bank determined the reserve based on the present value of expected future cash flows discounted at the loan's effective interest rate.

Loans not requiring specific reserves had fair values exceeding the total recorded investment, supporting the net investment in the loan which includes principal balance, unamortized fees and costs and accrued interest, if any. Once a borrower is in default, Patriot is under no obligation to advance additional funds on unused commitments.

27

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

On a case-by-case basis, Patriot may agree to modify the contractual terms of a borrower’s loan to assist customers who may be experiencing financial difficulty. Substantially all loan modifications involve lowering the monthly payments on such loans through either a reduction in interest rate below market rate, an extension of the term of the loan, or a combination of adjusting these two contractual attributes. Loan modifications may also result in the forgiveness of principal or accrued interest. In addition, when modifying commercial loans, Patriot frequently obtains additional collateral or guarantor support. If the borrower has performed under the existing contractual terms of the loan and Patriot’s underwriters 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 six months ended June 30, 2024 and 2023, 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 six months ended June 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. As of June 30, 2024 and December 31, 2023, 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 June 30, 2024, SBA loans held for sale was $4.4 million, consisting only of $4.4 million SBA commercial and industrial loans. There were $9.9 million of SBA loans held for sale at December 31, 2023, consisting of $3.5 million SBA commercial and industrial loans and $6.4 million SBA commercial real estate loans. During the three and six months ended June 30, 2024, $5.5 million SBA loans previously classified as held for sale were transferred to held for investment. No SBA held for sale loans were transferred to held for investment in the three and six months ended June 30, 2023.

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 amount of such loans serviced, but owned by a third party, amounted to approximately $44.2 million and $47.5 million at June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024 and December 31, 2023, the servicing asset has a carrying value of $790,000 and $857,000, respectively, and fair value of $873,000 and $932,000, respectively. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets. The servicing asset is included in other assets on the Consolidated Balance Sheets.

28

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following table presents an analysis of the activity in the SBA servicing assets for the three and six months ended June 30, 2024 and 2023:

(In thousands)	Three Month Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning balance	$	902	$	893	$	857	$	886
Servicing rights capitalized	9		24		73		58
Servicing rights amortized	(15)		(11)		(34)		(22)
Servicing rights disposed	(106)		(24)		(106)		(40)
Ending balance	$	790	$	882	$	790	$	882

Loans held for sale - Consumer Loans

Patriot Bank's Digital Payments Group has entered into a Program Management Agreement with a Buyer. Under the agreement, Patriot originates various types of consumer loans that are marketed by the buyer. As of June 30, 2024, the Bank had credit card loans held for sale totaling $8.4 million. The credit card loans 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 2024, the Bank reentered the residential mortgage business. The Residential Mortgage Division, located in Jacksonville, FL, generates the loans and typically sells them to third parties. As of June 30, 2024, the Company reported residential mortgage loans held for sale totaling $1.3 million. These loans are recorded at the lower of aggregate cost or market value. For the three and six months ended June 30, 2024, a total gain on sale of $10,000 was recorded and no servicing asset was recognized.

Note 6.    Deposits

The following table presents the balance of deposits held, by category as of June 30, 2024 and December 31, 2023.

(In thousands)	June 30, 2024		December 31, 2023
Non-interest bearing	$	93,736	$	110,056
Interest bearing:
Negotiable order of withdrawal accounts	26,354		33,035
Savings deposits	39,456		44,104
Interest bearing DDA	227,253		171,577
Money market	167,836		200,280
Certificates of deposit, $250,000 or less	162,361		175,988
Certificates of deposit, more than $250,000	62,704		64,745
Brokered deposits	21,202		40,526
Interest bearing, Total	707,166		730,255
Total Deposits	$	800,902	$	840,311

The deposits from Digital Payments division are included in the non-interest-bearing deposits, interest bearing DDA and money market deposits, and totaled approximately $255.8 million and $213.4 million as of June 30, 2024 and December 31, 2023, respectively.

29

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

As of June 30, 2024, contractual maturities of Certificates of Deposit (“CDs”), and brokered deposits is summarized as follows:

(In thousands)	Certificates of Deposit $250,000 or less		Certificates of Deposit more than $250,000		Brokered Deposits		Total
1 year or less	$	141,847	$	50,467	$	14,529	$	206,843
More than 1 year through 2 years	17,207		9,335		251		26,793
More than 2 years through 3 years	3,056		2,902		6,422		12,380
More than 3 years through 4 years	70		—		—		70
More than 4 years through 5 years	181		—		—		181
	$	162,361	$	62,704	$	21,202	$	246,267

Note 7.    Derivatives

Derivatives Not Designated in Hedge Relationships

Patriot is party to interest rate swap derivatives that are not designated as hedging instruments. Under a program, Patriot will execute interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Patriot executes with a third party, such that Patriot minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties.

As of June 30, 2024 and December 31, 2023, Patriot did not have any cash pledged for collateral on its interest rate swaps. No net gain or loss was recognized in other noninterest income on the Consolidated Statements of Operations during the three and six months ended June 30, 2024 and 2023.

Information about the valuation methods used to measure the fair value of derivatives is provided in Note 13 to the Consolidated Financial Statements.

The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):

(In thousands)	Notional Amount	Maturity (Years)	Fixed Rate		Variable Rate	Fair Value
June 30, 2024
Classified in Other Assets:
3rd party interest rate swap	1,309	5.00	4.38	%	1 Mo. SOFR + 2.00%	95
Classified in Other Liabilities:
Customer interest rate swap	1,309	5.00	4.38	%	1 Mo. SOFR + 2.00%	(95)
December 31, 2023
Classified in Other Assets:
3rd party interest rate swap	1,327	5.50	4.38	%	1 Mo. SOFR + 2.00%	74
Classified in Other Liabilities:
Customer interest rate swap	1,327	5.50	4.38	%	1 Mo. SOFR + 2.00%	(74)

30

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Note 8.     Share-Based Compensation and Employee Benefit Plan

In 2011, the Company adopted the Patriot National Bancorp, Inc. 2012 Stock Plan (the “2012 Plan”). The 2012 Plan was amended in 2020 and renamed as the Patriot National Bancorp, Inc. 2020 Restricted Stock Award Plan (the “2020 Plan”). A copy of the 2020 Plan was filed as Exhibit 10.1 to the Company’s Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2020 filed on April 30, 2021. The 2020 Plan provides an incentive to directors and employees of the Company by the grant of restricted stock awards (“RSA”).On November 10, 2022, the Board of Directors approved the Amendment and Restatement of the 2020 Plan (the “Amended and Restated 2020 Plan”), which was approved and ratified by shareholders of the Company on December 14, 2022.

The 2020 Plan was amended primarily to (i) reduce the total number of shares authorized for issuance thereunder from 3,000,000 shares to 400,000 shares; and (ii) limit the maximum number of shares of Company’s Common Stock granted during a single fiscal year to any non-employee director, together with any cash fees paid to such director, to be no more than a total value of $300,000. As of June 30, 2024, 127,665 shares of stock were available for issuance under the Plan. In accordance with the terms of the Plan, the vesting of RSAs may be accelerated at the discretion of the Compensation Committee of the Board of Directors. The Compensation Committee sets the terms and conditions applicable to the vesting of RSAs. RSAs granted to directors and employees generally vest in quarterly or annual installments over a three, four or five year period from the date of grant.

The following is a summary of the status of the Company’s restricted shares and changes for the three and six months ended June 30, 2024 and 2023:

Three months ended June 30, 2024:	Number of Shares Awarded	Weighted Average Grant Date Fair Value
Unvested at March 31, 2024	27,665	$5.24
Granted	81,174	$3.79
Unvested at June 30, 2024	108,839	$4.16
Six months ended June 30, 2024:
Unvested at December 31, 2023	17,506	$6.09
Granted	91,333	$3.79
Unvested at June 30, 2024	108,839	$4.16

Three months ended June 30, 2023	Number of Shares Awarded	Weighted Average Grant Date Fair Value
Unvested at March 31, 2023	22,660	$7.11
Unvested at June 30, 2023	22,660	$7.11
Six months ended June 30, 2023:
Unvested at December 31, 2022	22,660	$7.11
Unvested at June 30, 2023	22,660	$7.11

The Company recognizes compensation expense for all director and employee share-based compensation awards on a straight-line basis over the requisite service period, which is equal to the vesting schedule of each award, for each vesting portion of an award equal to its grant date fair value.

Unrecognized compensation expense attributable to the unvested restricted shares outstanding as of June 30, 2024 amounted to $464,000, which amount is expected to be recognized over the weighted average remaining life of the awards of 2.6 years.

31

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

For the three and six months ended June 30, 2024, the Company recognized total share-based compensation expense of $41,000 and $65,000, respectively. The share-based compensation attributable to employees of Patriot amounted to $30,000 and $45,000, respectively. Included in share-based compensation expense attributable to Patriot’s external directors, were $11,000 and $20,000, respectively. The directors received total compensation of $60,000 and $128,000 respectively, which amounts are included in other operating expenses in the consolidated statements of operations.

For the three and six months ended June 30, 2023, the Company recognized total share-based compensation expense of $23,000 and $46,000, respectively. The share-based compensation attributable to employees of Patriot amounted to $14,000 and $28,000, respectively. Included in share-based compensation expense were $9,000 and $18,000 attributable to Patriot’s external directors, who received total compensation of $53,000 and $108,000 for each of those periods, respectively.

Dividends

The Company has not paid any dividends since 2020 and has no present plans to pay dividends.

Retirement Plan

Patriot offers employees participation in the Patriot Bank, N.A. 401(k) Savings Plan (the "401(k) Plan") under Section 401(k) of the Internal Revenue Code, along with the ROTH feature to the Plan. The 401(k) Plan covers substantially all employees who have completed one month of service, are 21 years of age and who elect to participate. Under the terms of the 401(k) Plan, participants can contribute up to the maximum amount allowed, subject to Federal limitations. At its discretion, Patriot may match eligible participating employee contributions at the rate of 50% of the first 6% of the participants’ salary contributed to the 401(k) Plan. During the three and six months ended June 30, 2024, Patriot made matching contributions to the 401(k) Plan of $88,000 and $168,000, respectively. During the three and six months ended June 30, 2023, compensation expense under the 401(k) aggregated $82,000 and $157,000, respectively.

32

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Note 9.    Earnings per share

The Company is required to present basic earnings per share and diluted earnings per share in its Consolidated Statements of Operations. Basic earnings per share amounts are computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share reflects additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential shares of common stock that may be issued by the Company relate to outstanding unvested RSAs granted to directors and employees. The dilutive effect resulting from these potential shares is determined using the treasury stock method. The Company is also required to provide a reconciliation of the numerator and denominator used in the computation of both basic and diluted earnings per share.

The following table summarizes the computation of basic and diluted loss per share for the three and six months ended June 30, 2024 and 2023:

(Net loss in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Basis loss per share:
Net loss attributable to Common shareholders	$	(3,081)		$	(615)		$	(3,380)		$	(1,314)
Divided by:
Weighted average shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Basic loss per share of common stock	$	(0.77)		$	(0.16)		$	(0.85)		$	(0.33)
Diluted loss per share:
Net loss attributable to Common shareholders	$	(3,081)		$	(615)		$	(3,380)		$	(1,314)
Weighted average shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Effect of potentially dilutive restricted shares of common stock	—		(1)	—		(2)	—		(3)	—		(4)
Divided by:
Weighted average diluted shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Diluted loss per share of common stock	$	(0.77)		$	(0.16)		$	(0.85)		$	(0.33)

(1)	The weighted average diluted shares outstanding does not include 8,695 anti-dilutive restricted shares of common stock for the three months ended June 30, 2024.
(2)	The weighted average diluted shares outstanding does not include 1,528 anti-dilutive restricted shares of common stock for the three months ended June 30, 2023.
(3)	The weighted average diluted shares outstanding does not include 4,330 anti-dilutive restricted shares of common stock for the six months ended June 30, 2024.
(4)	The weighted average diluted shares outstanding does not include 427 anti-dilutive restricted shares of common stock for the six months ended June 30, 2023.

33

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Note 10. Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, Patriot is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet. The contractual amounts of these instruments reflect the extent of involvement Patriot has in particular classes of financial instruments.

The contractual amount of commitments to extend credit and standby letters of credit represents the maximum amount of potential accounting loss should: the contract be fully drawn upon; the customer default; and the value of any existing collateral become worthless. Patriot applies its credit policies to entering commitments and conditional obligations and, as with its lending activates, evaluates each customer’s creditworthiness on a case-by-case basis. Management believes that it effectively mitigates the credit risk of these financial instruments through its credit approval processes, establishing credit limits, monitoring the on-going creditworthiness of recipients and grantees, and the receipt of collateral as deemed necessary.

Financial instruments with credit risk at June 30, 2024 and December 31, 2023 are as follows:

(In thousands)	June 30, 2024		December 31, 2023
Commitments to extend credit:
Unused lines of credit	$	77,242	$	63,435
Undisbursed construction loans	861		2,607
Home equity lines of credit	25,806		26,488
	$	103,909	$	92,530

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments to extend credit generally have fixed expiration dates or other termination clauses, and may require payment of a fee by the borrower. Since these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary upon extending credit, is based on management’s credit evaluation of the customer. Collateral held varies, but may include commercial property, residential property, deposits and securities. Patriot has established an allowance for credit loss of $235,000 and $271,000 as of June 30, 2024 and December 31, 2023, respectively, which is included in accrued expenses and other liabilities.

Standby letters of credit are written commitments issued by Patriot to guarantee the performance of a customer to a third party. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loan facilities to customers. Guarantees that are not derivative contracts are recorded at fair value and included in the Consolidated Balance Sheet.

As of June 30, 2024, the Bank has an irrevocable stand-by letter of credit for a maximum of $35 million, issued by the Federal Home Loan Bank of Boston on behalf of the Bank, with Mastercard as the beneficiary, which expires on April 30, 2025.

34

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Note 11. Regulatory and Operational Matters

Federal and state regulatory authorities have adopted standards requiring financial institutions to maintain increased levels of capital. Effective January 1, 2015, federal banking agencies imposed four minimum capital requirements on a community bank’s risk-based capital ratios consisting of Total Capital, Tier 1 Capital, Common Equity Tier 1 (“CET1”) Capital, and a Tier 1 Leverage Capital ratio. The risk-based capital ratios measure the adequacy of a bank's capital against the riskiness of its on- and off-balance sheet assets and activities. Failure to maintain adequate capital is a basis for "prompt corrective action" or other regulatory enforcement action. In assessing a bank's capital adequacy, regulators also consider other factors such as interest rate risk exposure, liquidity, funding and market risks, quality and level of earnings, concentrations of credit, quality of loans and investments, nontraditional activity risk, policy effectiveness, and management's overall ability to monitor and control risk.

In September 2019, the community bank leverage ratio (“CBLR”) framework was jointly issued by the Federal Deposit Insurance Corporation ("FDIC"), the Office of the Comptroller of the Currency (“OCC”) and FRB. The final rule gives qualifying community banks the option to use a simplified measure of capital adequacy instead of risk based capital, beginning with their March 31, 2020 Call Report. Under the final rule a community bank may qualify for the CBLR framework if it has a Tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance sheet exposures and trading assets and liabilities. The CARES Act directed the federal banking agencies to issue an interim rule temporarily lowering the CBLR ratio to 8% which the agencies did with a transition back to 9% beginning January 1, 2022.

Capital adequacy is one of the most important factors used to determine the safety and soundness of individual banks and the banking system. A community bank which meets the leverage ratio requirement and other CBLR framework requirements will not be subject to other capital and leverage requirements and will be considered "well capitalized."

From September 2021 to September 30, 2023, the Company elected to adopt the CBLR framework. In the fourth quarter of 2023, the Company elected to use the instituted regulatory risk-based capital approach.

Under the instituted regulatory framework, to be considered “well capitalized”, a financial institution must generally have a Total Capital ratio of at least 10%, a Tier 1 Capital ratio of at least 8.0%, a CET1 Capital ratio at least 6.5%, and a Tier 1 Leverage Capital ratio of at least 5%. However, regardless of a financial institution’s ratios, the OCC may require increased capital ratios or impose dividend restrictions based on the other factors it considers in assessing a bank’s capital adequacy. Under the final capital rules that became effective on January 1, 2015, there was a requirement for a CET1 capital conservation buffer of 2.5% of risk-weighted assets, which is in addition to the other minimum risk-based capital standards in the rule. Institutions that do not maintain this required capital buffer become subject to progressively more stringent limitations on the percentage of earnings that may be distributed to shareholders or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital conversation buffer of 2.5% has been included in the minimum capital adequacy ratios as of June 30, 2024.

35

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The Company and Bank’s regulatory capital amounts and ratios at June 30, 2024 and December 31, 2023 are summarized as follows:

		June 30, 2024								December 31, 2023
		Patriot National Bancorp, Inc.				Patriot Bank, N.A.				Patriot National Bancorp, Inc.				Patriot Bank, N.A.
(Dollar amounts in thousands)		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to risk weighted assets):
Actual		$	84,432	9.84	%	$	96,204	11.21	%	$	89,727	10.00	%	$	100,683	11.22	%
To be Well Capitalized	(1)	—		—		85,784		10.00	%	—		—		89,732		10.00	%
For capital adequacy with Capital Buffer	(2)	—		—		90,073		10.50	%	—		—		94,218		10.50	%
For capital adequacy		68,647		8.00	%	68,627		8.00	%	71,788		8.00	%	71,785		8.00	%
Tier 1 Capital (to risk weighted assets):
Actual		65,705		7.66	%	87,477		10.20	%	73,282		8.17	%	94,238		10.50	%
To be Well Capitalized	(1)	—		—		68,627		8.00	%	—		—		71,785		8.00	%
For capital adequacy with Capital Buffer	(2)	—		—		72,916		8.50	%	—		—		76,272		8.50	%
For capital adequacy		51,485		6.00	%	51,470		6.00	%	53,841		6.00	%	53,839		6.00	%
Common Equity Tier 1 Capital (to risk weighted assets):
Actual		57,705		6.72	%	87,477		10.20	%	65,282		7.27	%	94,238		10.50	%
To be Well Capitalized	(1)	—		—		55,760		6.50	%	—		—		58,325		6.50	%
For capital adequacy with Capital Buffer	(2)	—		—		60,049		7.00	%	—		—		62,812		7.00	%
For capital adequacy		38,614		4.50	%	38,603		4.50	%	40,381		4.50	%	40,379		4.50	%
Tier 1 Leverage Capital (to average assets):
Actual		65,705		6.44	%	87,477		8.58	%	73,282		6.76	%	94,238		8.70	%
To be Well Capitalized	(1)	—		—		51,001		5.00	%	—		—		54,170		5.00	%
For capital adequacy		40,811		4.00	%	40,801		4.00	%	43,339		4.00	%	43,336		4.00	%

(1) Designation as "Well Capitalized" does not apply to bank holding companies - the Company. Such categorization of capital adequacy only applies to insured depository institutions - the Bank.

(2) The Capital Conservation Buffer implemented by the FDIC began to be phased in beginning January 1, 2016. It was not applicable to periods prior to that date and does not apply to bank holding companies - the Company.

On April 17, 2024, based on its supervisory profile, the Bank was notified by the OCC that it established individual minimum capital ratios (IMCR) for the Bank. Specifically, the Bank is required to maintain the following ratios: a common equity tier 1 capital ratio of 10.00%, a Tier 1 capital ratio of 10.00%, a Tier 1 leverage ratio of 9.00% and a total risk-based capital to risk-weighted assets of 11.50%.

As of June 30, 2024, the Bank did not meet all of its regulatory capital requirements. The common equity tier 1 capital was $87.5 million, or 10.20% of risk-weighted assets, exceeding the required level of 10.00%. The Tier 1 capital was $87.5 million, or 10.20% of risk-weighted assets, also above the required level of 10.00%. However, the Tier 1 leverage capital was $87.5 million, or 8.58% of average assets, falling short of the required 9.00%. The total risk-based capital was $96.2 million, or 11.21% of risk-weighted assets, below the required 11.50%. During the second quarter, the Bank significantly reduced its total and risk-based assets to work towards achieving the IMCR targets. This trend will continue into the remainder of 2024 with a goal of achieving exceeding the IMCR ratios by the end of 2024.

36

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Note 12. Fair Value and Interest Rate Risk

Patriot measures the carrying value of certain financial assets and liabilities at fair value, as required by its policies as a financial institution and by US GAAP. The carrying values of certain assets and liabilities are measured at fair value on a recurring basis, such as available-for-sale securities; while other assets and liabilities are measured at fair value on a non-recurring basis due to external factors requiring management’s judgment to estimate potential losses of value resulting in asset impairments or the establishment of valuation reserves. Measuring assets and liabilities at fair value may result in fluctuations to carrying value that have a significant impact on the results of operations or other comprehensive income for the period and period over period.

Following is a detailed summary of the guidance provided by US GAAP regarding the application of fair value measurements and Patriot’s application thereof. Additionally, the following information includes detailed summaries of the effects fair value measurements have on the carrying amounts of asset and liabilities presented in the Consolidated Financial Statements.

The objective of fair value measurement is to value an asset that may be sold or a liability that may be transferred at the estimated value which might be obtained in a transaction between unrelated parties under current market conditions. US GAAP establishes a framework for measuring assets and liabilities at fair value, as well as certain financial instruments classified in equity. The framework provides a fair value hierarchy, which prioritizes quoted prices in active markets for identical assets and liabilities and minimizes unobservable inputs, which are inputs for which market data are not available and that are developed by management using the best information available to develop assumptions about the value market participants might place on the asset to be sold or liability to be transferred.

The three levels of the fair value hierarchy consist of:

Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date (such as active exchange-traded equity securities and certain U.S. and government agency debt securities).

Level 2 - Observable inputs other than quoted prices included in Level 1, such as:

–Quoted prices for similar assets or liabilities in active markets (such as U.S. agency and government sponsored mortgage-backed securities)

–Quoted prices for identical or similar assets or liabilities in less active markets (such as certain U.S. and government agency debt securities, and corporate and municipal debt securities that trade infrequently)

–Other inputs that are observable for substantially the full term of the asset or liability (i.e. interest rates, yield curves, prepayment speeds, default rates, etc.).

Level 3 - Valuation techniques that require unobservable inputs that are supported by little or no market activity and are significant to the fair value measurement of the asset or liability (such as pricing and discounted cash flow models that typically reflect management’s estimates of the assumptions a market participant would use in pricing the asset or liability).

A description of the valuation methodologies used for assets and liabilities recorded at fair value, and for estimating fair value for financial and non-financial instruments not recorded at fair value, is set forth below.

Cash and due from banks, restricted cash, and accrued interest receivable and payable

The carrying amount is a reasonable estimate of fair value and accordingly these are classified as Level 1. These financial instruments are not recorded at fair value on a recurring basis.

Available-for-sale securities

The fair value of securities available for sale (carried at fair value) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities' relationship to other benchmark quoted prices, or using unobservable inputs employing various techniques and assumptions (Level 3).

37

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Other Investments

The Bank’s investment portfolio includes the Solomon Hess SBA Loan Fund, which is utilized by the Bank to satisfy its Community Reinvestment Act (“CRA”) lending requirements. As this fund operates as a private fund, shares in the fund are not publicly traded but may be redeemed with 60 days’ notice at cost. For that reason, the carrying amount was considered comparable to fair value at both June 30, 2024 and December 31, 2023 due to its short-term nature.

Federal Reserve Bank Stock and Federal Home Loan Bank Stock

Shares in the FRB and FHLB are purchased and redeemed based upon their $100 par value. The stocks are non-marketable equity securities, and as such, are considered restricted securities that are carried at cost.

Loans

The fair value of loan portfolio is estimated by discounting the future cash flows using the rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We estimate the fair value of our loan portfolio using an exit price notion resulting in prior periods no longer being comparable. The exit price notion requires determination of the price at which willing market participants would transact at the measurement date under current market conditions depending on facts and circumstances, such as origination rates, credit risk, transaction costs, liquidity, national and regional market trends and other adjustments, utilizing publicly available rates and indices. The application of an exit price notion requires the use of significant judgment.

Loans Held for Sale

The fair value of loans held for sale is estimated by using a market approach that includes prices for loans sold awaiting settlement and other observable inputs. The Company has determined that the inputs used to value the loans held for sale fall within Level 2 of the fair value hierarchy.

SBA Servicing Asset

Servicing assets do not trade in an active, open market with readily observable prices. The Company estimates the fair value of servicing assets using discounted cash flow models incorporating numerous assumptions from the perspective of a market participant including market discount rates and prepayment speeds. Due to the significant unobservable input related to the servicing rights, the SBA servicing asset is classified within Level 3 of the valuation hierarchy.

Other Real Estate Owned

The fair value of OREO the Bank may obtain is based on current appraised property value less estimated costs to sell. When fair value is based on unadjusted current appraised value, OREO is classified within Level 2 of the fair value hierarchy. Patriot classifies OREO within Level 3 of the fair value hierarchy when unobservable inputs are used to determine adjustments to appraised values. Patriot does not record OREO at fair value on a recurring basis, but rather initially records OREO at fair value on a non-recurring basis and then monitors property and market conditions that may indicate a change in value is warranted.

Derivative asset (liability) - Interest Rate Swaps

The Company’s derivative assets and liabilities consist of transactions as part of management’s strategy to manage interest rate risk. The valuation of interest rate swap agreements does not contain any counterparty risk. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Company has determined that the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy. See Note 8 for additional disclosures on derivatives.

38

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Deposits

The fair value of demand deposits, regular savings and certain money market deposits is the amount payable on demand at the reporting date.

The fair value of certificates of deposit and other time deposits is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities, estimated using local market data, to a schedule of aggregated expected maturities on such deposits. Patriot does not record deposits at fair value on a recurring basis.

Senior Notes, Subordinated Notes, and Junior Subordinated Debt and Note Payable

Patriot does not record senior notes at fair value on a recurring basis. The fair value of the senior notes was estimated by discounting future cash flows at rates at which similar notes would be made. The carrying value is considered comparable to fair value.

Patriot does not record subordinated notes at fair value on a recurring basis. The fair value of the subordinated notes was estimated by discounting future cash flows at rates at which similar notes would be made. The carrying value is considered comparable to fair value.

Patriot does not record junior subordinated debt at fair value on a recurring basis. Junior subordinated debt reprices quarterly, as a result, the carrying amount is considered a reasonable estimate of fair value.

The Company considers its own credit worthiness in determining the fair value of its senior notes, subordinated notes, notes payable and junior subordinated debt.

Federal Home Loan Bank Borrowings

The fair value of FHLB advances is estimated using a discounted cash flow calculation that applies current FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances. Patriot does not record FHLB advances at fair value on a recurring basis.

Off-balance sheet financial instruments

Off-balance sheet financial instruments are based on interest rate changes and fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Patriot does not record the off-balance-sheet financial instruments (i.e., commitments to extend credit) at fair value on a recurring basis.

39

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following table provides a comparison of the carrying amounts and estimated fair values of Patriot’s financial assets and liabilities as of June 30, 2024 and December 31, 2023:

(In thousands)		June 30, 2024				December 31, 2023
	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and noninterest bearing balances due from banks	Level 1	$	2,514	$	2,514	$	2,195	$	2,195
Interest-bearing deposits due from banks	Level 1	91,097		91,097		50,322		50,322
Restricted cash	Level 1	41		41		14,019		14,019
Available-for-sale securities	Level 2	76,302		76,302		78,925		78,925
Available-for-sale securities	Level 3	10,365		10,365		10,262		10,262
Other investments	Level 2	4,450		4,450		4,450		4,450
Federal Reserve Bank stock	Level 2	2,193		2,193		2,090		2,090
Federal Home Loan Bank stock	Level 2	3,571		3,571		4,202		4,202
Loans receivable, net	Level 3	761,313		735,140		832,934		812,856
Loans held for sale	Level 2	14,092		14,245		20,767		21,557
SBA servicing assets	Level 3	790		873		857		932
Other real estate owned	Level 2	2,843		2,843		2,843		2,843
Accrued interest receivable	Level 2	6,452		6,452		7,219		7,219
Interest rate swap receivable	Level 2	95		95		74		74
Financial assets, total		$	976,118	$	950,181	$	1,031,159	$	1,011,946
Financial Liabilities:
Demand deposits	Level 2	$	93,736	$	93,736	$	110,056	$	110,056
Negotiable order of withdrawal accounts	Level 2	26,354		26,354		33,035		33,035
Savings deposits	Level 2	39,456		39,456		44,104		44,104
Interest bearing DDA	Level 2	227,253		227,253		171,577		171,577
Money market deposits	Level 2	167,836		167,836		200,280		200,280
Time deposits	Level 2	225,065		221,396		240,733		239,655
Brokered deposits	Level 1	21,202		21,157		40,526		40,453
FHLB, FRB and correspondent bank borrowings	Level 2	156,900		156,693		171,000		170,171
Senior notes	Level 2	11,792		11,425		11,723		11,397
Subordinated debt	Level 2	9,883		9,792		9,869		10,102
Junior subordinated debt owed to unconsolidated trust	Level 2	8,142		8,142		8,137		8,137
Note payable	Level 3	270		265		376		362
Accrued interest payable	Level 2	3,105		3,105		1,235		1,235
Interest rate swap liability	Level 2	95		95		74		74
Financial liabilities, total		$	991,089	$	986,705	$	1,042,725	$	1,040,638

The carrying amount of cash and noninterest bearing balances due from banks, restricted cash, interest-bearing deposits due from banks, and demand deposits approximates fair value, due to the short-term nature and high turnover of these balances. These amounts are included in the table above for informational purposes.

40

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

In the normal course of its operations, Patriot assumes interest rate risk (i.e., the risk that general interest rate levels will fluctuate). As a result, the fair value of Patriot’s financial assets and liabilities are affected when interest market rates change, which change may be either favorable or unfavorable. Management attempts to mitigate interest rate risk by matching the maturities of its financial assets and liabilities. However, borrowers with fixed rate obligations are less likely to prepay their obligations in a rising interest rate environment and more likely to prepay their obligations in a falling interest rate environment. Conversely, depositors receiving fixed rates are more likely to withdraw funds before maturity in a rising interest rate environment and less likely to do so in a falling interest rate environment. Management monitors market rates of interest and the maturities of its financial assets and financial liabilities, adjusting the terms of new loans and deposits in an attempt to minimize interest rate risk. Additionally, management mitigates its overall interest rate risk through its available funds investment strategy.

The following tables detail the financial assets measured at fair value on a recurring basis and the valuation techniques utilized relative to the fair value hierarchy, as of June 30, 2024 and December 31, 2023:

(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	—	$	64,287	$	—	$	64,287
Corporate bonds	—		3,518		10,365		13,883
Subordinated notes	—		4,327		—		4,327
SBA loan pools	—		3,703		—		3,703
Municipal bonds	—		467		—		467
Available-for-sale securities	$	—	$	76,302	$	10,365	$	86,667
Interest rate swap receivable	$	—	$	95	$	—	$	95
Interest rate swap liability	$	—	$	95	$	—	$	95
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	—	$	65,671	$	—	$	65,671
Corporate bonds	—		3,504		10,262		13,766
Subordinated notes	—		4,227		—		4,227
SBA loan pools	—		5,037		—		5,037
Municipal bonds	—		486		—		486
Available-for-sale securities	$	—	$	78,925	$	10,262	$	89,187
Interest rate swap receivable	$	—	$	74	$	—	$	74
Interest rate swap liability	$	—	$	74	$	—	$	74

Patriot measures certain financial assets and financial liabilities at fair value on a non-recurring basis. When circumstances dictate (e.g., impairment of long-lived assets, other than temporary impairment of collateral value), the carrying values of such financial assets and financial liabilities are adjusted to fair value or fair value less costs to sell, as may be appropriate.

As of June 30, 2024 and December 31, 2023, four corporate bonds were classified as Level 3 instruments. The fair values of these securities were determined using a present value approach. The discount rate assumed was determined based on unobservable inputs in a pricing model. During the three and six months ended June 30, 2024 and 2023, the Company had no transfers into or out of Levels 1, 2 or 3.

41

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The reconciliation of the beginning and ending balances during the three and six months ended June 30, 2024 and 2023 for Level 3 available-for-sale securities is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Level 3 fair value, beginning of period	$	10,189	$	10,205	$	10,262	$	9,427
Purchases	—		—		—		—
Realized gain (loss)	—		—		—		—
Unrealized (loss) gain	176		(323)		103		455
Transfers in and /or out of Level 3	—		—		—		—
Level 3 fair value, end of period	$	10,365	$	9,882	$	10,365	$	9,882

The table below presents the valuation methodology and unobservable inputs for level 3 assets measured at fair value on a non-recurring basis as of June 30, 2024 and December 31, 2023:

(In thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
June 30, 2024:
Individually evaluated loans, net	$	30,173	Real Estate Appraisals	Discount for appraisal type	5.8	%	-	20%
SBA servicing assets	873		Discounted Cash Flows	Market discount rates	14.73	%	-	14.90%
December 31, 2023:
Impaired loans, net	$	12,928	Real Estate Appraisals	Discount for appraisal type	5.8	%	-	20%
SBA servicing assets	932		Discounted Cash Flows	Market discount rates	14.73	%	-	14.90%

Patriot discloses fair value information about financial instruments, whether or not recognized in the consolidated balance sheet, for which it is practicable to estimate that value. Certain financial instruments are excluded from disclosure requirements and, accordingly, the aggregate fair value amounts presented do not necessarily represent the complete underlying value of financial instruments included in the consolidated financial statements.

The estimated fair value amounts have been measured as of June 30, 2024 and December 31, 2023, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of the financial instruments measured may be different than if they had been subsequently valued.

The information presented should not be interpreted as an estimate of the total fair value of Patriot’s assets and liabilities, since only a portion of Patriot’s assets and liabilities are required to be measured at fair value for financial reporting purposes. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between Patriot’s fair value disclosures and those of other bank holding companies may not be meaningful.

Note 13.    Subsequent Events

The Company has evaluated all events or transactions that occurred through the date the Company issued these financial statements. During this period, the Company did not have any material recognizable or non-recognizable subsequent events.

42

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

"Safe Harbor" Statement Under Private Securities Litigation Reform Act of 1995

This Quarterly Report on Form 10-Q contains statements that relate to future events and expectations and, as such, constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements, other than purely historical information, including estimates, projections, statements relating to our strategies, outlook, business and financial prospects, business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Forward-looking statements are not guarantees of future performance. Although Patriot believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, these expectations may not be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and changes in circumstances, many of which are beyond Patriot’s control.

Many possible events or factors could affect Patriot’s future financial results and performance and could cause the actual results, performance or achievements of Patriot to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others:

(1)changes in prevailing interest rates which would affect the interest earned on the Company’s interest earning assets and the interest paid on its interest bearing liabilities;

(2)the timing of re-pricing of the Company’s interest earning assets and interest bearing liabilities;

(3)the effect of changes in governmental monetary policy;

(4)the effect of changes in regulations applicable to the Company and the Bank and the conduct of its business;

(5)changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks;

(6)the ability of competitors that are larger than the Company to provide products and services which it is impracticable for the Company to provide;

(7)the state of the economy and real estate values in the Company’s market areas, and the consequent effect on the quality of the Company’s loans;

(8)demand for loans and deposits in our market area;

(9)recent governmental initiatives that are expected to have a profound effect on the financial services industry and could dramatically change the competitive environment of the Company;

(10)other legislative or regulatory changes, including those related to residential mortgages, changes in accounting standards, and Federal Deposit Insurance Corporation (“FDIC”) premiums that may adversely affect the Company;

(11)the application of generally accepted accounting principles in the United States of America (“U.S. GAAP”), consistently applied;

(12)the fact that one period of reported results may not be indicative of future periods;

(13)the state of the economy in the greater New York metropolitan area and its particular effect on the Company's customers, vendors and communities and other such factors, including risk factors, as may be described in the Company’s other filings with the Securities and Exchange Commission (the “SEC”);

(14)political, social, legal and economic instability, civil unrest, war, catastrophic events, acts of terrorism;

(15)possible future outbreaks of infectious diseases, including the ongoing novel coronavirus (COVID-19) outbreak;

(16)changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for c losses;

(17)our ability to access cost-effective funding;

(18)our ability to implement and change our business strategies;

(19)changes in the quality or composition of our loan or investment portfolios;

(20)technological changes that may be more difficult or expensive than expected;

(21)our ability to manage market risk, credit risk and operational risk in the current economic environment;

(22)our ability to enter new markets successfully and capitalize on growth opportunities;

(23)changes in consumer spending, borrowing and savings habits;

(24)our ability to retain key employees;

(25)our compensation expense associated with equity allocated or awarded to our employees; and

(26)the premiums paid for the guaranteed portion of SBA loans by third party investors.

43

The risks and uncertainties included here are not exhaustive. In addition to those included herein further information concerning our business, including additional factors that could materially affect our financial results, is included in our other filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). Further, it is not possible to assess the effect of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this report.

Critical Accounting Policies

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates. Management has identified the accounting for the allowance for credit losses, the analysis and valuation of its investment securities, the valuation of deferred tax assets, the valuation of derivatives, and the valuation of servicing assets as certain of the Company’s most critical accounting policies and estimates in that they are important to the portrayal of the Company’s financial condition and results of operations. They require management’s most subjective and complex judgment as a result of the need to make estimates about the effect of matters that are inherently uncertain. Refer to the 2023 Form 10-K for additional information.

Summary

The Company reported net loss of $3.1 million ($0.77 basic and diluted loss per share) for the quarter ended June 30, 2024, compared to a net loss of $615,000 ($0.16 basic and diluted loss per share) for the quarter ended June 30, 2023.

For the six months ended June 30, 2024, net loss was $3.4 million, or $0.85 basic and diluted loss per share, compared to a net loss of $1.3 million, ($0.33 basic and diluted loss per share) for the six months ended June 30, 2023.

The financial results for the six months ended June 30, 2024 were adversely impacted by an elevated provision for credit losses of $3.8 million, compared to provision of $3.5 million for loan losses recorded for the first half year of 2023.

FINANCIAL CONDITION

Total assets decreased $54.4 million to $1.04 billion as of June 30, 2024, compared to $1.09 billion at December 31, 2023, primarily due to the decline in loans receivable of $72.6 million as of June 30, 2024.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash increased from $66.5 million at December 31, 2023 to $93.7 million at June 30, 2024. The increase in 2024 reflects the intention to boost balance sheet liquidity.

44

Investments

The following table is a summary of the Company’s investment securities portfolio, at fair value, at the dates shown:

	June 30,		December 31,		Increase /(Decrease)
(In thousands)	2024		2023		($)		(%)
U. S. Government agency and mortgage-backed securities	$	64,287	$	65,671	$	(1,384)	-2.11	%
Corporate bonds	13,883		13,766		117		0.85	%
Subordinated notes	4,327		4,227		100		2.37	%
SBA loan pools	3,703		5,037		(1,334)		-26.48	%
Municipal bonds	467		486		(19)		-3.91	%
Total available-for-sale securities, at fair value	86,667		89,187		(2,520)		-2.83	%
Other investments, at cost	4,450		4,450		—		—	%
Total investment securities	$	91,117	$	93,637	$	(2,520)	-2.69	%

Total investments decreased by $2.5 million, from $93.6 million at December 31, 2023 to $91.1 million at June 30, 2024. The decrease in the six months ended June 30, 2024 was primarily attributable to sale and repayment of available-for-sale securities totaling $4.3 million, which was partially offset by an increase in purchase of available-for-sale securities of $2.3 million. During the six months ended June 30, 2024, the Bank sold available-for-sale securities of $2.3 million and recognized a net loss of $24,000.

Loans held for investment

The following table provides the composition of the Company’s loan held for investment portfolio as of June 30, 2024 and December 31, 2023:

(In thousands)	June 30, 2024				December 31, 2023
	Amount		%		Amount		%
Loan portfolio segment:
Commercial Real Estate	$	458,556	59.07	%	$	472,093	55.62	%
Residential Real Estate	99,419		12.81	%	106,783		12.58	%
Commercial and Industrial	134,744		17.36	%	163,565		19.27	%
Consumer and Other	77,397		9.97	%	99,688		11.74	%
Construction	3,829		0.49	%	4,266		0.50	%
Construction to permanent - CRE	2,357		0.30	%	2,464		0.29	%
Loans receivable, gross	776,302		100.00	%	848,859		100.00	%
Allowance for credit losses	(14,989)				(15,925)
Loans receivable, net	$	761,313			$	832,934

The Company’s loan portfolio decreased $72.6 million, from $848.9 million at December 31, 2023 to $776.3 million at June 30, 2024. The Company has continued the trend of restricting loan growth and allowing loans to pay down as the balance sheet is reduced in order to strengthen capital ratios.

SBA loans held for investment were included in the commercial real estate loans and commercial and industrial loan classifications above. As of June 30, 2024 and December 31, 2023, SBA loans included in the commercial and industrial loans were $13.0 million and $17.1 million, respectively. SBA loans included in the commercial real estate loans were $18.8 million and $12.9 million, respectively.

45

At June 30, 2024, the net loan to deposit ratio was 95.1% and the net loan to total assets ratio was 73.3%. At December 31, 2023, these ratios were 99.1% and 76.2%, respectively.

Allowance for Credit Losses on Loans

The allowance for credit losses on loans was $15.0 million as of June 30, 2024, compared to $15.9 million as of December 31, 2023. The decrease in allowance was mainly due to reduction in loan balances and the recognition of charge-offs on the unsecured consumer loan portfolio. Based upon the overall assessment and evaluation of the loan portfolio at June 30, 2024, management believes $15.0 million in the allowance for credit losses, which represented 1.93% of gross loans outstanding, is adequate under prevailing economic conditions to absorb existing losses in the loan portfolio.

The following table provides detail of activity in the allowance for credit losses on loans for the three and six months ended June 30, 2024 and 2023:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2024			2023			2024			2023
Balance at beginning of the period	$	13,777		$	24,780		$	15,925		$	10,310
Charge-offs:
Commercial Real Estate	—			—			(158)			—
Residential Real Estate	—			—			(21)			—
Commercial and Industrial	(404)			(4)			(814)			(6)
Consumer and Other	(1,849)			(2,516)			(4,372)			(4,312)
Total charge-offs	(2,253)			(2,670)			(5,365)			(4,468)
Recoveries:
Residential Real Estate	—			11			—			11
Commercial and Industrial	72			9			78			16
Consumer and Other	260			260			565			433
Total recoveries	332			280			643			460
Net charge-offs	(1,921)			(2,390)			(4,722)			(4,008)
Impact of CECL adoption	—			—			—			13,001
Provision for credit losses	3,133			1,708			3,786			4,795
Balance at end of the period	$	14,989		$	24,098		$	14,989		$	24,098
Ratios:
Net charge-offs to average loans	(0.24)		%	(0.26)		%	(0.57)		%	(0.45)		%
Allowance for credit losses to total loans	1.93		%	2.59		%	1.93		%	2.59		%

46

The following table provides an allocation of allowance for credit losses on loans by portfolio segment:

(In thousands)	June 30, 2024				December 31, 2023
	Allowance for credit losses		Percent of loans in each category to total loans		Allowance for credit losses		Percent of loans in each category to total loans
Commercial Real Estate	$	7,958	59.07	%	$	6,089	55.62	%
Residential Real Estate	678		12.81	%	607		12.58	%
Commercial and Industrial	1,215		17.36	%	1,269		19.27	%
Consumer and Other	5,133		9.97	%	7,843		11.74	%
Construction	5		0.49	%	4		0.50	%
Construction to permanent - CRE	—		0.30	%	113		0.29	%
Total Allowance for credit losses	$	14,989	100.00	%	$	15,925	100.00	%

Non-performing Assets

The following table presents non-performing assets as of June 30, 2024 and December 31, 2023:

	June 30, 2024			December 31, 2023
Non-accruing loans:
Commercial Real Estate	$	27,676		$	12,775
Residential Real Estate	302			—
Commercial and Industrial	5,771			3,921
Consumer and Other	1,265			977
Construction	—			454
Construction to Permanent - CRE	2,357			—
Total non-accruing loans	37,371			18,127
Loans past due over 90 days and still accruing	1,178			341
Other real estate owned	$	2,843		$	2,843
Total nonperforming assets	$	41,392		$	21,311
Nonperforming assets to total assets	3.98		%	1.95		%
Nonperforming loans to total loans, net	5.06		%	2.22		%

As of June 30, 2024, the $37.4 million of non-accrual loans were individually evaluated for impairment, and a specific reserve of $5.7 million was established for them. For collateral dependent loans, the Bank has obtained appraisal reports from independent licensed appraisal firms and discounted those values based on the Bank’s experience selling OREO properties and for estimated selling costs to determine estimated impairment. For cash flow dependent loans, the Bank determined the reserve based on the present value of expected future cash flows discounted at the loan's effective interest rate.

47

Loans held for sale

SBA loans held for sale totaled $4.4 million and $9.9 million as of June 30, 2024 and December 31, 2023, respectively. SBA loans held for sale represent the guaranteed portion of SBA loans and are reflected at the lower of aggregate cost or market value. SBA loans held for sale at June 30, 2024 consisted of $4.4 million SBA commercial and industrial loans. SBA loans held for sale at December 31, 2023, consisted of $3.5 million SBA commercial and industrial loans and $6.4 million SBA commercial real estate loans, respectively.

As of June 30, 2024, the credit card loans held for sale from Digital Payments division totaled $8.4 million. The credit card loans expected to be held for no longer than three days before being sold. The credit card receivable are fully cash-secured by deposits at Patriot. The credit card loans are sold to the third party as a whole loan sale transaction, priced at Par, thus there is no servicing asset or gain or loss on sale.

In 2024, the Bank reentered the residential mortgage business. The Residential Mortgage Division, located in Jacksonville, FL, generates the loans and typically sells them to third parties. As of June 30, 2024, the Company reported residential mortgage loans held for sale totaling $1.3 million. These loans are recorded at the lower of aggregate cost or market value. For the three and six months ended June 30, 2024, a total gain on sale of $10,000 was recorded and no servicing asset was recognized.

Deferred Taxes

Deferred tax assets were $25.1 million and $24.1 million at June 30, 2024 and December 31, 2023, respectively. Deferred tax assets consist predominately of state net operating losses, capitalized costs and allowances for credit losses.

The effective tax benefit rate for the three and six months ended June 30, 2024 was (23.07)% and (20.25)%, compared to the effective tax benefit rate of (27.30)% and (27.08)% for the three and six months ended June 30, 2023. The Company’s effective rates for both periods was affected by state taxes and non-deductible expenses.

Patriot anticipates utilizing the state net operating loss carry forwards to reduce income taxes otherwise payable on future years taxable income.

Patriot evaluates its ability to realize its net deferred tax assets on a quarterly basis. In doing so, management considers all available evidence, both positive and negative, to determine whether it is more likely than not that the deferred tax assets will be realized. In addition, management assesses tax attributes including available tax planning strategies and state net operating loss carry-forwards that do not begin to expire until the year of 2030. No valuation allowance was recorded as of June 30, 2024 and December 31, 2023. The Company will continue to evaluate its ability to realize its net deferred tax assets. If future evidence suggests that it is more likely than not that additional deferred tax assets will not be realized, the valuation allowance will be adjusted.

48

Deposits

The following table is a summary of the Company’s deposits at the dates shown:

(In thousands)	June 30,			December 31,			Increase/(Decrease)
	2024			2023			$		%
Non-interest bearing:
Non-interest bearing	$	79,933		$	95,109		$	(15,176)	(15.96)	%
Non-interest bearing DDA- Digital Payments	13,803			14,947			(1,144)		(7.65)	%
Total non-interest bearing	93,736			110,056			(16,320)		(14.83)	%
Interest bearing:
Negotiable order of withdrawal accounts (NOW)	26,354			33,035			(6,681)		(20.22)	%
Savings	39,456			44,104			(4,648)		(10.54)	%
Interest bearing DDA	18,758			7,127			11,631		163.20	%
Interest bearing DDA - Digital Payments	208,495			164,450			44,045		26.78	%
Money market	134,285			166,294			(32,009)		(19.25)	%
Money market - Digital Payments	33,551			33,986			(435)		(1.28)	%
Certificates of deposit, $250,000 or less	162,361			175,988			(13,627)		(7.74)	%
Certificates of deposit, more than $250,000	62,704			64,745			(2,041)		(3.15)	%
Brokered deposits	21,202			40,526			(19,324)		(47.68)	%
Total Interest bearing	707,166			730,255			(23,089)		(3.16)	%
Total Deposits	$	800,902		$	840,311		$	(39,409)	(4.69)	%
Total Digital Payments deposits	$	255,849		$	213,383		$	42,466	19.90	%
Total retail branch bank deposits	$	391,353		$	394,819		$	(3,466)	(0.88)	%
Total uninsured deposits	262,683			334,300			(71,617)		(21.42)	%
Uninsured deposits to total deposits	32.80		%	39.78		%
Uninsured deposits to total deposits excluding Digital Payments deposits	16.95		%	20.06		%

Borrowings

Total borrowings were $187.0 million and $201.1 million as of June 30, 2024 and December 31, 2023, respectively. Borrowings consist primarily of FHLB advances, senior notes, subordinated notes, junior subordinated debentures and a note payable. The senior notes, subordinated notes and junior subordinated debentures contain affirmative covenants that require the Company to maintain its and its subsidiaries’ legal entity and tax status, pay its income tax obligations on a timely basis, and comply with SEC and FDIC reporting requirements.

Federal Home Loan Bank borrowings

The Company is a member of the Federal Home Loan Bank of Boston ("FHLB-B"). Borrowings from the FHLB-B are limited to a percentage of the value of qualified collateral, as defined on the FHLB-B Statement of Products Policy. Qualified collateral, as defined, primarily consists of mortgage-backed securities and loans receivable that are required to be free and clear of liens and encumbrances, and may not be pledged for any other purposes.

FHLB-B advances are structured to facilitate the Bank’s management of its balance sheet and liquidity requirements. Outstanding advances from the FHLB-B decreased from $101.0 million at December 31, 2023 to $87.9 million at June 30, 2024.

49

At June 30, 2024, the FHLB-B advances bore fixed rates of interest ranging from 2.40% to 5.54% with maturities ranging from 1 day to 2 months, 16 days, and have a weighted average interest rate of 4.49%.

At June 30, 2024, collateral for FHLB-B borrowings consisted of a mixture of real estate loans and securities with book value of $235.9 million. Remaining unused borrowing capacity under this line totaled $27.9 million at June 30, 2024.

In addition, Patriot has a $2.0 million revolving line of credit with the FHLB-B. For the three and six months ended June 30, 2024 and 2023, no funds had been borrowed under the line of credit.

Interest expense incurred for the three and six months ended June 30, 2024 were $362,000 and $721,000, respectively. Interest expense incurred for the three and six months ended June 30, 2023 were $1.7 million and $3.0 million, respectively.

Correspondent Bank - Line of Credit

Patriot has entered into unsecured federal funds sweep and federal funds line of credit facility agreements with certain correspondent banks. Borrowings available under the agreements totaled $22.0 million at both June 30, 2024 and December 31, 2023. The purpose of the agreements is to provide a credit facility intended to satisfy overnight federal account balance requirements and to provide for daily settlement of FRB, Automated Clearing House (ACH), and other clearinghouse transactions.

There was no outstanding balance under the agreements at June 30, 2024 and December 31, 2023. Interest expense incurred for the three and six months ended June 30, 2024 was $0 and $2,000, respectively. For three and six months ended June 30, 2023, interest expense incurred was $54,000 and $117,000, respectively.

Other Borrowing

The Federal Reserve Bank of New York (“FRBNY”) accepts loan pledges from qualifying depository institutions to secure borrowings from the Discount Window. Patriot has pledged eligible loans as collateral to support its borrowing capacity at the FRBNY. As of June 30, 2024, the book value of the pledged loans totaled $14.3 million, with a collateral value of $10.5 million. No funds were borrowed from the Discount Window under the FRBNY's Borrower-in-Custody ('BIC") program, and no interest expense was incurred for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, a total of $12.0 million was borrowed, and interest expense incurred was $5,000.

In July 2023, the Bank established a collateralized funding line of $73.8 million at par value under the Federal Reserve's newly established Bank Term Funding Program ("BTFP"). The program provided additional funding to eligible depository institutions, assuring they can meet the needs of all their depositors. The program served as an additional source of liquidity against high-quality securities, eliminating the need of an institution to quickly sell those securities in times of stress. The line allowed for a fixed rate borrowing at market rates, for up to one year, with repayment permitted at any time without penalty. The BTFP ceased allowing any new advances after March 11, 2024. As of June 30, 2024, the collateral value of the pledged securities was $69.9 million. Patriot borrowed a total of $69.0 million under the BTFP. Interest expense incurred for the three and six months ended June 30, 2024 was $852,000 and $1.7 million, respectively. No interest expense was incurred for the three and six months ended June 30, 2023.

Senior notes

On December 22, 2016, the Company issued $12 million of senior notes ("2016 Senior Notes") bearing interest at 7% per annum. On November 17, 2021, the original maturity date of the 2016 Senior Notes was extended from December 22, 2021 to June 30, 2022.

On June 22, 2022, the Company amended and restated the 2016 Senior Notes. The maturity date of the Senior Notes was further extended to December 31, 2022, and the interest rate increased from (i) 7% to 7.25% from July 1, 2022 until September 30, 2022 and (ii) from 7.25% to 7.50% thereafter. The 2016 Senior Notes was repaid in December 2022.

50

On December 21, 2022, the Company completed an issuance and sale of $12 million in aggregate principal amount of 8.50% fixed rate senior notes due January 15, 2026 (“2022 Senior Notes”). In connection with the issuance of the 2022 Senior Notes, the Company incurred $326,000 of costs, which are being amortized over the term of the 2022 Senior Notes to recognize a constant rate of interest expense. At June 30, 2024 and December 31, 2023, $208,000 and $277,000 of unamortized debt issuance costs were deducted from the face amount of the 2022 Subordinated Notes included in the Consolidated Balance Sheet, respectively.

The 2022 Senior Note Purchase Agreement contains certain customary representations, warranties, and covenants made by each of the Company and the Purchasers. The 2022 Senior Notes are not subject to any sinking fund and are not convertible into or exchangeable for any other securities or assets of the Company or any of its subsidiaries. The 2022 Senior Notes are not subject to redemption at the option of the holders. Principal and interest on the 2022 Senior Notes are subject to acceleration only in limited circumstances. The 2022 Senior Notes are an unsecured, unsubordinated obligation and ranks equally in right of payment to all of the Company’s existing and future unsecured indebtedness, liabilities and other obligations that are not subordinated in right of payment to the Senior Note, and will be effectively subordinated to any of the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing such indebtedness. The 2022 Senior Notes are the obligations of the Company only and are not obligations of, and are not guaranteed by, any of the Company’s affiliates.

For the three and six months ended June 30, 2024, the Company recognized interest expense of $289,000 and $579,000, respectively. Interest expense incurred for the three and six months ended June 30, 2023 was $289,000 and $579,000, respectively.

Subordinated notes

On June 29, 2018, the Company entered into certain subordinated note purchase agreements with two institutional accredited investors and completed a private placement of $10 million of fixed-to-floating rate subordinated notes with the maturity date of September 30, 2028 (the “Subordinated Notes”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.

The Subordinated Notes initially bore interest at 6.25% per annum, from and including June 29, 2018, to but excluding, June 30, 2023, payable semi-annually in arrears. From and including June 30, 2023, until but excluding June 30, 2028 or an early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month LIBOR, which was replaced by SOFR in 2023 (but not less than zero) plus 332.5 basis points, payable quarterly in arrears. The Company may, at its option, beginning on June 30, 2023 and on any scheduled interest payment date thereafter, redeem the Subordinated Notes.

In connection with the issuance of the Subordinated Notes, the Company incurred $291,000 of debt issuance costs, which are being amortized over the term of the Subordinated Notes to recognize a constant rate of interest expense. At June 30, 2024 and December 31, 2023, $117,000 and $131,000 of unamortized debt issuance costs were deducted from the face amount of the Subordinated Notes included in the consolidated balance sheet, respectively.

For the three and six months ended June 30, 2024, the Company recognized interest expense of $224,000 and $451,000, respectively. Interest expense incurred for the three and six months ended June 30, 2023 was $164,000 and $327,000, respectively.

Junior subordinated debt owed to unconsolidated trust

In 2003, the Patriot National Statutory Trust I (“the Trust”), which has no independent assets and is wholly-owned by the Company, issued $8.0 million of trust preferred securities. The proceeds, net of a $240,000 placement fee, were invested in junior subordinated debentures issued by the Company, which invested the proceeds in the Bank. The Bank used the proceeds to fund its operations.

Trust preferred securities currently qualify for up to 25% of the Company’s Tier I Capital, with the excess qualifying as Tier 2 Capital.

The junior subordinated debentures are unsecured obligations of the Company. The debentures are subordinate and junior in right of payment to all present and future senior indebtedness of the Company. In addition to its obligations under the junior subordinated debentures and in conjunction with the Trust, the Company issued an unconditional guarantee of the trust preferred securities.

51

The junior subordinated debentures bear interest at three-month SOFR plus 3.15% and mature on March 26, 2033, at which time the principal amount borrowed will be due. The placement fee of $240,000 is amortized and included as a component of the periodic interest expense on the junior subordinated debentures, in order to produce a constant rate of interest expense. As of June 30, 2024 and December 31, 2023, the unamortized placement fee deducted from the face amount of the junior subordinated debt owed to the unconsolidated trust amounted to $106,000 and $111,000, respectively, and accrued interest on the junior subordinated debentures was $10,000 and $12,000, respectively.

For the three and six months ended June 30, 2024, the Company recognized interest expense of $180,000 and $359,000, respectively. Interest expense incurred for the three and six months ended June 30, 2023 was $169,000 and $332,000, respectively.

At its option, exercisable on a quarterly basis, the Company may redeem the junior subordinated debentures from the Trust, which would then redeem the trust preferred securities.

Note Payable

In September 2015, the Bank purchased the property in which its Fairfield, Connecticut branch is located for approximately $2.0 million, a property it had been leasing until that date. The purchase price was primarily satisfied by issuing the seller a $2.0 million, nine-year, promissory note bearing interest at a fixed rate of 1.75% per annum. As of June 30, 2024 and December 31, 2023, the note had a balance outstanding of $270,000 and $376,000, respectively. The note matures in August 2024 and requires a balloon payment of approximately $234,000 at that time. The note is secured by a first Mortgage Deed and Security Agreement on the purchased property.

For the three and six months ended June 30, 2024, the Company recognized interest expense of $2,000 and $3,000, respectively. Interest expense incurred for the three and six months ended June 30, 2023 was $3,000 and $5,000, respectively.

Derivatives

As of June 30, 2024, Patriot has two interest rate swaps (“swaps”). One swap is with a loan customer to provide a facility to mitigate the fluctuations in the variable rate on the respective loan. The other swap is with an outside third party. The customer interest rate swap is matched in offsetting terms to the third party interest rate swap. The swaps are reported at fair value in other assets or other liabilities on the consolidated balance sheets. Patriot’s swaps are derivatives, but are not designated as hedging instruments, thus any net gain or loss resulting from changes in the fair value is recognized in other noninterest income. The Company recognized no gain on the swaps for the three and six months ended June 30, 2024 and 2023.

Further discussion of the fair value of derivatives is set forth in Note 8 to the consolidated financial statements.

Equity

Equity decreased $3.9 million, from $44.4 million at December 31, 2023 to $40.5 million at June 30, 2024, primarily due to a net loss of $3.4 million for the six months ended June 30, 2024, and a net unrealized holding loss for investment portfolio of $541,000.

Off-Balance Sheet Commitments

The Company’s off-balance sheet commitments primarily consist of commitments to lend of $103.9 million and $92.5 million as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024, the Bank has an irrevocable stand-by letter of credit for a maximum of $35 million, issued by the Federal Home Loan Bank of Boston on behalf of the Bank, with Mastercard as the beneficiary, which expires on April 30, 2025.

52

Average Balances

The following tables present daily average balance sheets, interest income, interest expense and the corresponding yields earned and rates paid for the three and six months ended June 30, 2024 and 2023:

(In thousands)	Three Months Ended June 30,
	2024						2023
	Average Balance		Interest		Yield		Average Balance		Interest		Yield
ASSETS
Interest Earning Assets:
Loans	$	805,682	$	11,993	5.97	%	$	916,321	$	14,052	6.15	%
Investments	94,956		710		1.50	%	104,551		858		1.64	%
Cash equivalents and other	39,422		514		5.23	%	25,435		399		6.29	%
Total interest earning assets	940,060		13,217		5.64	%	1,046,307		15,309		5.87	%
Cash and due from banks	12,949						2,348
Allowance for credit losses	(12,980)						(23,587)
OREO	2,843						—
Other assets	59,418						67,711
Total Assets	$	1,002,290					$	1,092,779
Liabilities
Interest bearing liabilities:
Deposits	$	706,327	$	6,285	3.57	%	$	721,917	$	5,248	2.92	%
Borrowings	112,335		1,214		4.33	%	147,374		1,723		4.69	%
Senior notes	11,770		289		4.91	%	11,631		289		4.97	%
Subordinated debt	18,019		404		8.99	%	17,980		333		7.43	%
Note Payable	286		2		2.80	%	496		3		2.43	%
Total interest bearing liabilities	848,737		8,194		3.87	%	899,398		7,596		3.39	%
Demand deposits	103,158						136,975
Other liabilities	7,038						6,644
Total Liabilities	958,933						1,043,017
Shareholders' equity	43,357						49,762
Total Liabilities and Shareholders' Equity	$	1,002,290					$	1,092,779
Net interest income			$	5,023					$	7,713
Interest margin					2.14	%					2.96	%
Interest spread					1.77	%					2.48	%

53

(In thousands)	Six Months Ended June 30,
	2024						2023
	Average Balance		Interest		Yield		Average Balance		Interest		Yield
ASSETS
Interest Earning Assets:
Loans	$	823,380	$	24,641	6.00	%	$	888,461	$	26,602	6.04	%
Investments	95,984		1,442		3.00	%	102,139		1,673		3.28	%
Cash equivalents and restricted cash	43,079		1,135		5.28	%	26,518		680		5.17	%
Total interest earning assets	962,443		27,218		5.67	%	1,017,118		28,955		5.74	%
Cash and due from banks	7,814						3,856
Allowance for credit losses	(13,868)						(23,135)
OREO	2,843						—
Other assets	64,608						69,102
Total Assets	$	1,023,840					$	1,066,941
Liabilities
Interest bearing liabilities:
Deposits	$	726,214	12,971		3.58	%	$	673,440	8,827		2.64	%
Borrowings	112,204		2,428		4.34	%	142,215		3,159		4.48	%
Senior notes	11,752		579		9.85	%	11,625		579		9.96	%
Subordinated debt	18,014		810		9.02	%	17,976		659		7.39	%
Note Payable	312		3		1.93	%	522		5		1.93	%
Total interest bearing liabilities	868,496		16,791		3.88	%	845,778		13,229		3.15	%
Demand deposits	104,485						163,844
Other liabilities	6,795						7,546
Total Liabilities	979,776						1,017,168
Shareholders' equity	44,064						49,773
Total Liabilities and Shareholders' Equity	$	1,023,840					$	1,066,941
Net interest income			$	10,427					$	15,726
Interest margin					2.17	%					3.12	%
Interest spread					1.79	%					2.59	%

54

The following table presents the change in interest-earning assets and interest-bearing liabilities by major category and the related change in the interest income earned and interest expense incurred thereon attributable to the change in transactional volume in the financial instruments and the rates of interest applicable thereto, comparing the three and six months ended June 30, 2024 and 2023.

	Three Months Ended June 30,						Six Months Ended June 30,
	2024 compared to 2023						2024 compared to 2023
(In thousands)	Increase/(Decrease)						Increase/(Decrease)
	Volume		Rate		Total		Volume		Rate		Total
Interest Earning Assets:
Loans	$	(1,832)	$	(227)	$	(2,059)	$	(2,040)	$	79	$	(1,961)
Investments	(121)		(27)		(148)		(176)		(55)		(231)
Cash equivalents and other	219		(104)		115		429		26		455
Total interest earning assets	(1,734)		(358)		(2,092)		(1,787)		50		(1,737)
Interest bearing liabilities:
Deposit	758		279		1,037		2,389		1,755		4,144
Borrowings	(431)		(78)		(509)		(671)		(60)		(731)
Senior notes	3		(3)		—		6		(6)		—
Subordinated debt	—		71		71		—		151		151
Note payable and other	(1)		—		(1)		(2)		—		(2)
Total interest bearing liabilities	329		269		598		1,722		1,840		3,562
Increase (decrease) in net interest income	$	(2,063)	$	(627)	$	(2,690)	$	(3,509)	$	(1,790)	$	(5,299)

Results of Operations

For the three months ended June 30, 2024, interest income and dividend income was $13.2 million, which decreased $2.1 million as compared to $15.3 million for the quarter ended June 30, 2023. Total interest expense was $8.2 million for the three months ended June 30, 2024, which increased $598,000 as compared to $7.6 million for the three months ended June 30, 2023. Net interest income decreased $2.7 million from $7.7 million for the three months ended June 30, 2023 to $5.0 million for the three months ended June 30, 2024. The decline in 2024 reflects a lower loan balance and narrower net interest margin due to higher deposit costs.

For the six months ended June 30, 2024, interest income and dividend income was $27.2 million, which decreased $1.7 million as compared to $29.0 million for the six months ended June 30, 2023. Total interest expense was $16.8 million, which increased $3.6 million as compared to $13.2 million for the six months ended June 30, 2023. Net interest income was $10.4 million for the six months ended June 30, 2024, which decreased $5.3 million from $15.7 million for the six months ended June 30, 2023.

The net interest margin was 2.14% for the quarter ended June 30, 2024, compared with 2.96% for the quarter ended June 30, 2023. For the six months ended June 30, 2024 and 2023, the net interest margin was 2.17% and 3.12%, respectively. The decline in interest margins for the three and six months ended June 30, 2024 compared to the same periods in 2023, was primarily associated with an increase in the cost of deposits and other borrowings due to the significant rise in market interest rates and a decline in loan interest income due to the declining loan balance and the increase in nonaccrual loans., partially mitigated by the rise in variable rate interest earning assets.

55

Provision for Credit Losses

For the three months ended June 30, 2024, the provision for credit losses was $3.1 million, consisting of a $3.1 million loan provision and a $41,000 credit for off-balance-sheet exposure reserves. In comparison, for the three months ended June 30, 2023, the provision for credit losses was $1.3 million, including a $1.7 million loan provision and a $382,000 credit for off-balance-sheet exposure reserves. The higher provision in the second quarter was primarily due to the decline in classification of a single CRE loan along with the impact of a decline in valuation of a previously classified CRE loan.

For the six months ended June 30, 2024, the provision for credit losses was $3.8 million, which included a $3.8 million loan provision and a $36,000 credit for off-balance-sheet exposure reserves. For the six months ended June 30, 2023, the provision was $3.5 million, consisting of a $4.8 million provision and a $1.3 million credit for off-balance-sheet exposure reserves.

Non-interest income

Non-interest income for the three months ended June 30, 2024 was $2.1 million, compared to $829,000 for the three months ended June 30, 2023. For the six months ended June 30, 2024 and 2023, non-interest income was $4.3 million and $1.7 million, respectively. The increase was primarily attributable to higher non-interest income from the Bank's Digital Payments division.

Non-interest expense

Non-interest expense for the three months ended June 30, 2024 decreased to $8.0 million, compared to $8.1 million for the three months ended June 30, 2023. Non-interest expense for the six months ended June 30, 2024 was $15.2 million, compared to $15.6 million for the six months ended June 30, 2023.

Provision for income taxes

The Company reported a benefit for income taxes of $924,000 and $858,000 for the three and six months ended June 30, 2024, respectively, compared to a benefit for income taxes of $231,000 and $488,000 for the three and six months ended June 30, 2023, respectively.

Liquidity

The Company’s balance sheet liquidity was 12.4% of total assets at June 30, 2024, compared to 8.7% at December 31, 2023. Liquidity including readily available off-balance sheet funding sources was 17.6% of total assets at June 30, 2024, compared to 18.6% at December 31, 2023. The readily available liquidity ratio remained well above the Company's 10% policy minimum.

The following categories of assets are considered balance sheet liquidity: cash and due from banks, federal funds sold (if any), short-term investments (if any), loans held for sale, and unpledged available-for-sale securities. In addition, off balance sheet funding sources include collateral-based borrowing available from the FHLB, correspondent bank borrowing lines, and brokered deposits subject to internal limitations.

Liquidity is a measure of the Company’s ability to generate adequate cash to meet its financial obligations. The principal cash requirements of a financial institution are to cover downward fluctuations in deposit accounts. Management believes the Company’s liquid assets provide sufficient coverage to satisfy loan demand, cover potential fluctuations in deposit accounts, and to meet other anticipated operational cash requirements.

Management manages its capital resources by seeking to maintain a capital structure that will ensure an adequate level of capital to support anticipated asset growth and absorb potential losses while effectively leveraging capital to enhance profitability and return to shareholders. Dividends have not been paid to shareholders since 2020 but may resume in future periods.

The primary source of liquidity at the Company is returns of capital from the Bank. These capital returns are subject to OCC approval and are needed periodically to provide funds needed to service debt payments at the Company.

56

Capital

The following tables illustrate the Company’s and the Bank’s regulatory capital ratios at June 30, 2024 and December 31, 2023:                                                

	June 30, 2024								December 31, 2023
	Patriot National Bancorp, Inc.				Patriot Bank, N.A.				Patriot National Bancorp, Inc.				Patriot Bank, N.A.
(Dollar amounts in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to risk weighted assets)	$	84,432	9.84	%	$	96,204	11.21	%	$	89,727	10.00	%	$	100,683	11.22	%
Tier 1 Capital (to risk weighted assets)	65,705		7.66	%	87,477		10.20	%	73,282		8.17	%	94,238		10.50	%
Common Equity Tier 1 Capital (to risk weighted assets)	57,705		6.72	%	87,477		10.20	%	65,282		7.27	%	94,238		10.50	%
Tier 1 Leverage Capital (to average assets)	65,705		6.44	%	87,477		8.58	%	73,282		6.76	%	94,238		8.70	%

Capital adequacy is one of the most important factors used to determine the safety and soundness of individual banks and the banking system. From September 2021 to September 30, 2023, the Company elected to adopt the CBLR framework. In the fourth quarter of 2023, the Company elected to use the instituted regulatory risk-based capital approach.

Under the regulatory framework for prompt correction action, to be considered “well capitalized,” an institution must generally have a leverage capital ratio of at least 5.0%, CET1 capital ratio at least 6.5%, a Tier 1 risk-based capital ratio of at least 8.0% and a total risk-based capital ratio of at least 10%. However, the OCC has the discretion to require increased capital ratios. Management continuously assesses the adequacy of the Bank’s capital with the goal to maintain a “well capitalized” classification.

On April 17, 2024, based on its supervisory profile, the Bank was notified by the OCC that it established individual minimum capital ratios (IMCR) for the Bank. Specifically, the Bank is required to maintain the following ratios: a common equity tier 1 capital ratio of 10.00%, a Tier 1 capital ratio of 10.00%, a Tier 1 leverage ratio of 9.00% and a total risk-based capital to risk-weighted assets of 11.50%.

As of June 30, 2024, the Bank did not meet all of its regulatory capital requirements. The common equity tier 1 capital was $87.5 million, or 10.20% of risk-weighted assets, exceeding the required level of 10.00%. The Tier 1 capital was $87.5 million, or 10.20% of risk-weighted assets, also above the required level of 10.00%. However, the Tier 1 leverage capital was $87.5 million, or 8.58% of average assets, falling short of the required 9.00%. The total risk-based capital was $96.2 million, or 11.21% of risk-weighted assets, below the required 11.50%. During the second quarter, the Bank significantly reduced its total and risk-based assets to work towards achieving the IMCR targets. This trend will continue into the remainder of 2024 with a goal of achieving exceeding the IMCR ratios by the end of 2024.

Impact of Inflation and Changing Prices

The Company’s Consolidated Financial Statements have been prepared in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the effect of general levels of inflation. Interest rates do not necessarily move in the same direction or with the same magnitude as the prices of goods and services. Notwithstanding this, inflation can directly affect the value of loan collateral, in particular, real estate. Inflation, deflation or disinflation could significantly affect the Company’s earnings in future periods.

57

Item 3: Quantitative and Qualitative Disclosures about Market Risk

Market risk is defined as the sensitivity of income to fluctuations in interest rates, foreign exchange rates, equity prices, commodity prices and other market-driven rates or prices. The Company’s market risk is primarily limited to interest rate risk.

The Company’s goal is to maximize long term profitability while minimizing its exposure to interest rate fluctuations. The first priority is to structure and price the Company’s assets and liabilities to maintain an acceptable interest rate spread while reducing the net effect of changes in interest rates. In order to accomplish this, the focus is on maintaining a proper balance between the timing and volume of assets and liabilities re-pricing within the balance sheet. One method of achieving this balance is to originate variable rate loans for the portfolio and purchase short-term investments to offset the increasing short-term re-pricing of the liability side of the balance sheet. In fact, a number of the interest-bearing deposit products have no contractual maturity. Therefore, deposit balances may run off unexpectedly due to changing market conditions. Additionally, loans and investments with longer term rate adjustment frequencies can be matched against longer term deposits and borrowings to lock in a desirable spread.

The exposure to interest rate risk is monitored by the Management Asset and Liability Committee consisting of senior management personnel. The Committee reviews the interrelationships within the balance sheet to maximize net interest income within acceptable levels of risk. This Committee reports to the Board of Directors. In addition to the Management Asset and Liability Committee, there is a Board Asset and Liability Committee (“ALCO”), which meets quarterly. ALCO monitors the interest rate risk analyses, reviews investment transactions during the period and determines compliance with the Company’s Investment, ALCO and Liquidity policies.

Management analyzes the Company’s interest rate sensitivity position to manage the risk associated with interest rate movements through the use of interest income simulation and gap analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest sensitive.” An asset or liability is said to be interest sensitive within a specific time period if it will mature or reprice within that time period.

Management’s goal is to manage asset and liability positions to moderate the effects of interest rate fluctuations on net interest income. Interest income simulations are completed quarterly and presented to ALCO. The simulations provide an estimate of the impact of changes in interest rates on net interest income under a range of assumptions. Changes to these assumptions can significantly affect the results of the simulations. The simulation incorporates assumptions regarding the potential timing in the repricing of certain assets and liabilities when market rates change and the changes in spreads between different market rates.

Simulation analysis is only an estimate of the Company’s interest rate risk exposure at a particular point in time. Management regularly reviews the potential effect changes in interest rates could have on the repayment of rate-sensitive assets and funding requirements of rate-sensitive liabilities.

58

The tables below set forth examples of changes in estimated net interest income and the estimated net portfolio value based on projected scenarios of interest rate increases and decreases. The analyses indicate the rate risk embedded in the Company’s portfolio at the dates indicated should all interest rates instantaneously rise or fall. The results of these changes are added to or subtracted from the base case; however, there are certain limitations to these types of analyses. Rate changes are rarely instantaneous and these analyses may therefore overstate the impact of short-term repricings. In certain low interest rate environments, the calculated effects of the 100 and 200 basis point downward shocks cannot absolutely reflect the risk to earnings and equity, since the interest rates on certain balance sheet items have approached their minimums. Therefore, it is not possible for the analyses to fully measure the true impact of these downward shocks.

	Net Portfolio Value - Performance Summary
(In thousands)	As of June 30, 2024						As of December 31, 2023
Projected Interest Rate Scenario	Estimated Value		Change from Base ($)		Change from Base (%)		Estimated Value		Change from Base ($)		Change from Base (%)
+200	$	91,535	$	(10,699)	(10.47)	%	$	107,524	$	(5,779)	(5.10)	%
+100	98,413		(3,821)		(3.74)	%	112,036		(1,267)		(1.12)	%
BASE	102,234		—		—		113,303		—		—
-100	105,365		3,131		3.06	%	114,032		729		0.64	%
-200	102,058		(176)		(0.17)	%	106,718		(6,585)		(5.81)	%

	Net Interest Income - Performance Summary
(In thousands)	June 30, 2024						December 31, 2023
Projected Interest Rate Scenario	Estimated Value		Change from Base ($)		Change from Base (%)		Estimated Value		Change from Base ($)		Change from Base (%)
+200	$	22,666	$	(3,096)	(12.02)	%	$	34,529	$	483	1.42	%
+100	24,353		(1,409)		(5.47)	%	34,425		379		1.11	%
BASE	25,762		—		—		34,046		—		—
-100	27,316		1,554		6.03	%	34,120		74		0.22	%
-200	29,002		3,240		12.58	%	34,595		549		1.61	%

59

Item 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Patriot maintains disclosure controls and procedures that are designed to provide reasonable assurance that information that is required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and accumulated and communicated to management in a timely fashion.

Patriot’s management, with the participation of its Chief Executive Officer and its Chief Financial Officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of its disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e). Based on this evaluation, Patriot’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, Patriot’s disclosure controls and procedures, as defined in Rule 13a-15(e), were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting during the Company’s fiscal quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations on the Effectiveness of Controls

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. In addition, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and/or procedures may deteriorate.

60

PART II - OTHER INFORMATION

Item 1: Legal Proceedings

Patriot does not have any pending legal proceedings, other than ordinary routine litigation, incidental to its business, to which Patriot is a party or any of its property is subject. Management is of the opinion that the ultimate disposition of these routine legal matters will not have a material adverse effect on the consolidated financial condition, results of operations, or liquidity of Patriot.

Item 5: Other Information

None.

61

ITEM 6: Exhibits

The exhibits marked with the section symbol (#) are interactive data files.

No.	Description
3(i)	Certificate of Incorporation of Patriot National Bancorp, Inc. (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed on December 1, 1999).
3(i)(A)	Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp, Inc. dated July 16, 2004 (incorporated by reference to Exhibit 3(i)(A) to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2004 filed on March 25, 2005).
3(i)(B)	Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp, Inc. dated June 15, 2006 (incorporated by reference to Exhibit 3(i)(B) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 filed on November 14, 2006).
3(i) (C)	Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp Inc. dated October 6, 2010 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 21, 2010)
3(ii)	Amended and Restated By-laws of Patriot National Bancorp, Inc. (incorporated by reference to Exhibit 3(ii) to the Company’s Current Report on Form 8-K filed on November 1, 2010)
31(1)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31(2)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32*	Section 1350 Certifications
101.INS#	Inline XBRL Instance Document
101.SCH#	Inline XBRL Schema Document
101.CAL#	Inline XBRL Calculation Linkbase Document
101.LAB#	Inline XBRL Labels Linkbase Document
101.PRE#	Inline XBRL Presentation Linkbase Document
101.DEF#	Inline XBRL Definition Linkbase Document
104	Cover Page Interactive Data File (embedded with the Inline XBRL and contained in Exhibit 101)

The exhibits marked with the section symbol (#) are interactive data files.

*The certification is being furnished and shall not be deemed filed.

62

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 9, 2024	Patriot National Bancorp, Inc. (Registrant)
	By:	/s/ Joseph D. Perillo
		Joseph D. Perillo
		Executive Vice President and Chief Financial Officer
	By:	/s/ David Lowery
		David Lowery
		President and Chief Executive Officer

63

EX-31.1

EXHIBIT 31 (1)

CERTIFICATION

BY CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14

I, David Lowery, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Patriot National Bancorp, Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ David Lowery
	David Lowery
	(Principal Executive Officer)
August 9, 2024

EX-31.2

EXHIBIT 31 (2)

CERTIFICATION

BY PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13A-14

I, Joseph D. Perillo, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Patriot National Bancorp, Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Joseph D. Perillo
	Joseph D. Perillo
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)
August 9, 2024

EX-32

EXHIBIT 32

CERTIFICATION PURSUANTTO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANTTO

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Patriot National Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, David Lowery and Joseph D. Perillo, the Chief Executive Officer and the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ David Lowery
	David Lowery
	Chief Executive Officer
	/s/ Joseph D. Perillo
	Joseph D. Perillo
	Chief Financial Officer
August 9, 2024

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission and shall not be considered filed as part of the Report.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2024	Aug. 09, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	000-29599
Entity Registrant Name	PATRIOT NATIONAL BANCORP INC
Entity Incorporation, State or Country Code	CT
Entity Tax Identification Number	06-1559137
Entity Address, Address Line One	900 Bedford Street
Entity Address, City or Town	Stamford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06901
City Area Code	203
Local Phone Number	252-5900
Title of 12(b) Security	Common Stock
Trading Symbol	PNBK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		3,976,073
Entity Central Index Key	0001098146
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Cash and due from banks:
Noninterest bearing deposits and cash	$ 2,514	$ 2,195
Interest bearing deposits	91,097	50,322
Restricted cash	41	14,019
Total cash, cash equivalents and restricted cash	93,652	66,536
Investment securities:
Available-for-sale securities, at fair value	86,667	89,187
Other investments, at cost	4,450	4,450
Total investment securities	91,117	93,637
Federal Reserve Bank (FRB) stock, at cost	2,193	2,090
Federal Home Loan Bank (FHLB) stock, at cost	3,571	4,202
Loans receivable (net of allowance for credit losses: 2024: $(14,989) and 2023: $(15,925))	761,313	832,934
Loans held for sale	14,092	20,767
Accrued interest and dividends receivable	6,452	7,219
Premises and equipment, net	29,338	29,875
Other real estate owned	2,843	2,843
Deferred tax asset	25,104	24,134
Core deposit intangible, net	179	203
Other assets	9,158	8,985
Total assets	1,039,012	1,093,425
Deposits:
Noninterest bearing deposits	93,736	110,056
Interest bearing deposits	707,166	730,255
Total deposits	800,902	840,311
FHLB, FRB and correspondent bank borrowings	156,900	171,000
Senior notes, net	11,792	11,723
Subordinated debt, net	9,883	9,869
Junior subordinated debt owed to unconsolidated trust, net	8,142	8,137
Note payable	270	376
Advances from borrowers for taxes and insurance	2,768	1,164
Accrued expenses and other liabilities	7,828	6,462
Total liabilities	998,485	1,049,042
Commitments and Contingencies
Shareholders' equity
Preferred stock, no par value; 1,000,000 shares authorized, no shares issued and outstanding	0	0
Common stock, $.01 par value, 100,000,000 shares authorized; As of June 30, 2024: 4,049,814 shares issued; 3,976,073 shares outstanding; As of December 31, 2023: 4,049,814 shares issued; 3,976,073 shares outstanding.	106,735	106,670
Accumulated deficit	(50,406)	(47,026)
Accumulated other comprehensive loss	(15,802)	(15,261)
Total shareholders' equity	40,527	44,383
Total liabilities and shareholders' equity	$ 1,039,012	$ 1,093,425

XML

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance for credit loss	$ (14,989)	$ (15,925)
Preferred stock, par value (usd per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	4,049,814	4,049,814
Common stock, shares outstanding (in shares)	3,976,073	3,976,073

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Interest and Dividend Income
Interest and fees on loans	$ 11,993	$ 14,052	$ 24,641	$ 26,602
Interest on investment securities	632	687	1,293	1,367
Dividends on investment securities	78	171	149	306
Other interest income	514	399	1,135	680
Total interest and dividend income	13,217	15,309	27,218	28,955
Interest Expense
Interest on deposits	6,285	5,248	12,971	8,827
Interest on FHLB, FRB and correspondent bank borrowings	1,214	1,723	2,428	3,159
Interest on senior debt	289	289	579	579
Interest on subordinated debt	404	333	810	659
Interest on note payable	2	3	3	5
Total interest expense	8,194	7,596	16,791	13,229
Net interest income	5,023	7,713	10,427	15,726
Provision for credit losses	3,092	1,325	3,750	3,545
Net interest income after provision for credit losses	1,931	6,388	6,677	12,181
Non-interest Income
Loan application, inspection and processing fees	90	121	292	244
Deposit fees and service charges	239	74	320	142
Gains on sales of loans	54	85	321	166
Rental income	130	105	151	224
(Loss) gain on sale of investment securities, net	0	0	(24)	24
Digital Payments income	1,212	405	2,176	766
Other income	338	39	1,074	98
Total non-interest income	2,063	829	4,310	1,664
Non-interest Expense
Salaries and benefits	4,623	4,661	8,779	8,928
Occupancy and equipment expense	862	839	1,679	1,723
Data processing expense	336	316	660	610
Professional and other outside services	737	727	1,578	1,641
Project expenses, net	0	66	0	93
Advertising and promotional expense	88	77	134	162
Loan administration and processing expense	52	103	60	154
Regulatory assessments	285	317	504	499
Insurance expense, net	73	68	149	145
Communications, stationary and supplies	220	241	369	432
Other operating expense	723	648	1,313	1,260
Total non-interest expense	7,999	8,063	15,225	15,647
Loss before income taxes	(4,005)	(846)	(4,238)	(1,802)
Benefit for income taxes	(924)	(231)	(858)	(488)
Net loss	$ (3,081)	$ (615)	$ (3,380)	$ (1,314)
Basic loss per share (usd per share)	$ (0.77)	$ (0.16)	$ (0.85)	$ (0.33)
Diluted loss per share (usd per share)	$ (0.77)	$ (0.16)	$ (0.85)	$ (0.33)

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (3,081)	$ (615)	$ (3,380)	$ (1,314)
Other comprehensive loss
Unrealized holding loss on securities	(29)	(2,211)	(629)	(507)
Income tax effect	8	570	168	131
Reclassification for realized loss (gain) on sale of investment securities	0	0	24	(24)
Income tax effect	0	0	(6)	6
Impact of update to effective tax rate	(49)	0	(98)	0
Total other comprehensive loss	(70)	(1,641)	(541)	(394)
Comprehensive loss	$ (3,151)	$ (2,256)	$ (3,921)	$ (1,708)

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Loss
Balance (in shares) at Dec. 31, 2022	3,965,186
Balance at Dec. 31, 2022	$ 59,583	$ (11,510)	$ 106,565	$ (31,337)	$ (11,510)	$ (15,645)
Comprehensive loss:
Net loss	(1,314)			(1,314)
Unrealized holding loss on available-for-sale securities, net of tax	(394)					(394)
Comprehensive loss	(1,708)			(1,314)		(394)
Share-based compensation expense	$ 46		46
Balance (in shares) at Jun. 30, 2023	3,965,186
Balance at Jun. 30, 2023	$ 46,411		106,611	(44,161)		(16,039)
Balance (in shares) at Mar. 31, 2023	3,965,186
Balance at Mar. 31, 2023	$ 48,644		106,588	(43,546)		(14,398)
Comprehensive loss:
Net loss	(615)			(615)
Unrealized holding loss on available-for-sale securities, net of tax	(1,641)					(1,641)
Comprehensive loss	(2,256)			(615)		(1,641)
Share-based compensation expense	$ 23		23
Balance (in shares) at Jun. 30, 2023	3,965,186
Balance at Jun. 30, 2023	$ 46,411		106,611	(44,161)		(16,039)
Balance (in shares) at Dec. 31, 2023	3,976,073
Balance at Dec. 31, 2023	$ 44,383		106,670	(47,026)		(15,261)
Comprehensive loss:
Net loss	(3,380)			(3,380)
Unrealized holding loss on available-for-sale securities, net of tax	(541)					(541)
Comprehensive loss	(3,921)			(3,380)		(541)
Share-based compensation expense	$ 65		65
Balance (in shares) at Jun. 30, 2024	3,976,073
Balance at Jun. 30, 2024	$ 40,527		106,735	(50,406)		(15,802)
Balance (in shares) at Mar. 31, 2024	3,976,073
Balance at Mar. 31, 2024	$ 43,637		106,694	(47,325)		(15,732)
Comprehensive loss:
Net loss	(3,081)			(3,081)
Unrealized holding loss on available-for-sale securities, net of tax	(70)					(70)
Comprehensive loss	(3,151)			(3,081)		(70)
Share-based compensation expense	$ 41		41
Balance (in shares) at Jun. 30, 2024	3,976,073
Balance at Jun. 30, 2024	$ 40,527		$ 106,735	$ (50,406)		$ (15,802)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash Flows from Operating Activities:
Net loss	$ (3,380)	$ (1,314)
Adjustments to reconcile net loss to net cash provided by operating activities:
Accretion of investment premiums and discounts, net	(68)	(52)
Amortization and accretion of purchase loan premiums and discounts, net	76	1,227
Amortization of debt issuance costs	88	87
Amortization of core deposit intangible	24	23
Amortization of servicing assets of sold SBA loans	140	62
Provision for credit losses	3,750	3,545
Depreciation and amortization	557	615
Loss (gain) on sales of available-for-sale securities	24	(24)
Gain on sale of premises and equipment	(3)	0
Share-based compensation	65	46
Increase in deferred income taxes, net	(906)	(494)
Originations of loans held for sale, net	(274,325)	(3,578)
Proceeds from sale of loans held for sale	280,134	3,095
Gains on sale of loans held for sale, net	(321)	(166)
Changes in assets and liabilities:
Decrease (increase) in accrued interest and dividends receivable	767	(361)
(Increase) decrease in other assets	(260)	1,984
Increase (decrease) in accrued expenses and other liabilities	1,484	(899)
Net cash provided by operating activities	7,846	3,796
Cash Flows from Investing Activities:
Proceeds from maturity or sales on available-for-sale securities	2,281	1,780
Principal repayments on available-for-sale securities	1,997	2,153
Purchases of available-for-sale securities	(2,319)	(10,415)
(Purchases) Redemptions of FRB stock	(103)	104
Redemptions (purchases) of FHLB stock	631	(4,198)
Origination of loans receivable	(23,081)	(132,611)
Purchases of loans receivable	(86)	(16,443)
Payments received on loans receivable	92,039	61,343
Purchases of premises and equipment	(91)	(230)
Proceeds from sale of premises and equipment	13	0
Net cash provided by (used in) investing activities	71,281	(98,517)
Cash Flows from Financing Activities:
(Decrease) increase in deposits, net	(39,409)	2,933
(Decrease) increase in FHLB, FRB and correspondent bank borrowings	(14,100)	122,000
Principal repayments of note payable	(106)	(104)
Increase in advances from borrowers for taxes and insurance	1,604	2,208
Net cash (used in) provided by financing activities	(52,011)	127,037
Net increase in cash, cash equivalents and restricted cash	27,116	32,316
Cash, cash equivalents and restricted cash at beginning of period	66,536	38,493
Cash, cash equivalents and restricted cash at end of period	93,652	70,809
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	14,832	12,609
Cash paid for income taxes	500	44
Non-cash transactions:
Net change in unrealized loss on available-for-sale securities	541	394
Transfers of loans held for sale to loans receivable	5,526	0
Transfers of loans receivable to loans held for sale	(4,339)	0
Capitalized servicing assets	74	58
Operating lease right-of-use assets / liabilities	138	16
Decrease in interest rate swaps	21	41
Increase in other assets for premises and equipment	71	0
Expected credit loss for loans - ASC 326 adoption	0	13,001
Expected credit loss for unfunded loan commitments - ASC 326 adoption	0	2,737
Deferred tax assets - ASC 326 adoption	$ 0	$ (4,228)

XML

Basis of Financial Statement Presentation

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Financial Statement Presentation

Basis of Financial Statement Presentation

The accompanying unaudited interim condensed Consolidated Financial Statements of Patriot National Bancorp, Inc. (the “Company” or “PNBK”) and its wholly-owned subsidiaries, Patriot Bank, N.A. (the “Bank”), Patriot National Statutory Trust I and PinPat Acquisition Corporation (collectively, “Patriot”), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted. The accompanying unaudited interim condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included on the Annual Report on Form 10-K for the year ended December 31, 2023.

The Consolidated Balance Sheet at December 31, 2023 presented herein has been derived from the audited Consolidated Financial Statements of the Company at that date, but does not include all of the information and footnotes required by US GAAP for complete financial statements.

The preparation of consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates. Management has identified accounting for the allowance for credit losses, the analysis and valuation of its investment securities, the valuation of deferred tax assets, the valuation of derivatives, and the valuation of servicing assets as certain of the Company’s more significant accounting policies and estimates, in that they are critical to the presentation of the Company’s consolidated financial condition and results of operations. As they concern matters that are inherently uncertain, these estimates require management to make subjective and complex judgments in the preparation of the Company’s Consolidated Financial Statements.

The information furnished reflects, in the opinion of management, all normal recurring adjustments necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results of operations that may be expected for the remainder of 2024.

Certain prior period amounts have been reclassified to conform to current year presentation.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Please refer to the summary of Significant Accounting Policies included in the Company’s 2023 Annual Report on Form 10-K for a list of all policies in effect as of December 31, 2023.

Recently Issued Accounting Standards

Recently issued Accounting Pronouncements not yet Adopted

ASU 2023-06

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in this Update modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years later. The amendments in this Update should be applied prospectively. For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The adoption of ASU 2023-06 is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures. The Company will continue to monitor for SEC action, and plan accordingly for adoption.

ASU 2023-07

In November, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Additionally, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and define other disclosure requirements. A public entity must apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this standard is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures.

ASU 2023-09

In December 2023, the FASB issued ASU 2023‑09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires more detailed disclosures of income taxes paid net of refunds received, income from continuing operations before income tax expense or benefit, and income tax expense from continuing operations. This standard is to be applied on a prospective basis, with retrospective application permitted, and will be effective for the Company for annual periods beginning on January 1, 2025. We do not expect adoption of this standard to have a material impact on the Company’s Consolidated Financial Statements but will likely result in additional disclosures.

XML

Available-for-Sale Securities

6 Months Ended

Jun. 30, 2024

Investments [Abstract]

Available-for-Sale Securities

Available-for-Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale securities at June 30, 2024 and December 31, 2023 are as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	79,854	$	—	$	(15,567)	$	64,287
Corporate bonds	17,996		—		(4,113)		13,883
Subordinated notes	5,000		—		(673)		4,327
SBA loan pools	4,733		—		(1,030)		3,703
Municipal bonds	558		—		(91)		467
Total available-for-sale securities	$	108,141	$	—	$	(21,474)	$	86,667
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	80,500	$	—	$	(14,829)	$	65,671
Corporate bonds	17,995		—		(4,229)		13,766
Subordinated notes	5,000		—		(773)		4,227
SBA loan pools	6,002		—		(965)		5,037
Municipal bonds	559		—		(73)		486
Total available-for-sale securities	$	110,056	$	—	$	(20,869)	$	89,187

The following table presents the available-for-sale securities’ gross unrealized losses and fair value, aggregated by the length of time the individual securities have been in a continuous loss position as of June 30, 2024 and December 31, 2023:

(In thousands)	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	4,236	$	(132)	$	60,051	$	(15,435)	$	64,287	$	(15,567)
Corporate bonds	—		—		13,883		(4,113)		13,883		(4,113)
Subordinated notes	—		—		4,327		(673)		4,327		(673)
SBA loan pools	—		—		3,703		(1,030)		3,703		(1,030)
Municipal bonds	—		—		467		(91)		467		(91)
Total available-for-sale securities	$	4,236	$	(132)	$	82,431	$	(21,342)	$	86,667	$	(21,474)
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	9,984	$	(286)	$	55,687	$	(14,543)	$	65,671	$	(14,829)
Corporate bonds	—		—		13,766		(4,229)		13,766		(4,229)
Subordinated notes	—		—		4,227		(773)		4,227		(773)
SBA loan pools	—		—		5,037		(965)		5,037		(965)
Municipal bonds	—		—		486		(73)		486		(73)
Total available-for-sale securities	$	9,984	$	(286)	$	79,203	$	(20,583)	$	89,187	$	(20,869)

As of June 30, 2024 and December 31, 2023, forty-nine of forty-nine and fifty of fifty available-for-sale securities had unrealized losses with an aggregate decline of (19.9)% and (19.0)% from the amortized cost of those securities, respectively.

At June 30, 2024, no allowance for credit losses has been recognized on available for sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available for sale debt securities. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities. The Company does not intend to sell these debt securities and it is more likely than not that the Company will not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity. The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased.

With regard to U.S. mortgage-backed securities and municipal bonds issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities.

With regard to corporate bonds, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, and (iv) internal forecasts. Securities under the U.S. Small Business Administration (“SBA”) government guaranteed loan pools program were purchased at a premium and the impairment was attributable primarily to increased prepayment speeds. The timely payment of principal and interest on these securities is guaranteed by the U.S. Government agency. The contractual terms of the subordinated notes do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Furthermore, as of June 30, 2024, there were no past due principal or interest payments associated with these securities. Based upon (i) the issuer’s strong bond ratings and (ii) a zero historical loss rate, no allowance for credit losses has been recorded for available-for-sale securities at June 30, 2024. All debt securities in an unrealized loss position as of June 30, 2024 continue to perform as scheduled and the Company does not believe there is a possible credit loss or that an allowance for credit loss on these debt securities is necessary.

As of June 30, 2024 and December 31, 2023, available-for-sale securities of $63.9 million and $68.5 million, respectively, were pledged to the Federal Home Loan Bank ("FHLB") and Federal Reserve Bank (“FRB”). The securities were pledged primarily to secure borrowings from the FHLB and FRB.

The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of June 30, 2024 and December 31, 2023. The mortgages underlying the mortgage-backed securities are not due at a single maturity date. Additionally, these mortgages often are and generally may be pre-paid without penalty, creating a degree of uncertainty that such investments can be held until maturity. For convenience, mortgage-backed securities have been included in the summary as a separate line item.

(In thousands)	Amortized Cost								Fair Value
	Due Within 5 years		Due After 5 years through 10 years		Due After 10 years		Total		Due Within 5 years		Due After 5 years through 10 years		Due After 10 years		Total
June 30, 2024:
Corporate bonds	$	2,000	$	15,996	$	—	$	17,996	$	1,957	$	11,926	$	—	$	13,883
Subordinated notes	3,000		2,000		—		5,000		2,550		1,777		—		4,327
SBA loan pools	—		—		4,733		4,733		—		—		3,703		3,703
Municipal bonds	153		405		—		558		136		331		—		467
Available-for-sale securities with stated maturity dates	5,153		18,401		4,733		28,287		4,643		14,034		3,703		22,380
U. S. Government agency and mortgage-backed securities	—		5,184		74,670		79,854		—		4,109		60,178		64,287
Total available-for-sale securities	$	5,153	$	23,585	$	79,403	$	108,141	$	4,643	$	18,143	$	63,881	$	86,667
December 31, 2023:
Corporate bonds	$	2,000	$	15,995	$	—	$	17,995	$	1,947	$	11,819	$	—	$	13,766
Subordinated notes	3,000		2,000		—		5,000		2,527		1,700		—		4,227
SBA loan pools	—		1,096		4,906		6,002		—		1,084		3,953		5,037
Municipal bonds	153		406		—		559		140		346		—		486
Available-for-sale securities with stated maturity dates	5,153		19,497		4,906		29,556		4,614		14,949		3,953		23,516
U. S. Government agency and mortgage-backed securities	—		5,222		75,278		80,500		—		4,237		61,434		65,671
Total available-for-sale securities	$	5,153	$	24,719	$	80,184	$	110,056	$	4,614	$	19,186	$	65,387	$	89,187

XML

Loans Receivable and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2024

Credit Loss [Abstract]

Loans Receivable and Allowance for Credit Losses

Loans Receivable and Allowance for Credit Losses

As of June 30, 2024 and December 31, 2023, loans receivable, net, consisted of the following:

(In thousands)	June 30, 2024		December 31, 2023
Loan portfolio segment:
Commercial Real Estate	$	458,556	$	472,093
Residential Real Estate	99,419		106,783
Commercial and Industrial	134,744		163,565
Consumer and Other	77,397		99,688
Construction	3,829		4,266
Construction to Permanent - CRE	2,357		2,464
Loans receivable, gross	776,302		848,859
Allowance for credit losses	(14,989)		(15,925)
Loans receivable, net	$	761,313	$	832,934

Patriot's lending activities are conducted principally in Fairfield and New Haven Counties in Connecticut and Westchester County in New York, and the five Boroughs of New York City. Patriot originates commercial real estate loans, commercial business loans, a variety of consumer loans, and construction loans, and has purchased residential loans since 2016. All 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 is dependent to some degree on the status of the regional economy as well as upon the regional real estate market. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio and the recovery of a substantial portion of any resulting real estate acquired is susceptible to changes in market conditions.

Patriot has established credit policies applicable to each type of lending activity in which it engages and evaluates the creditworthiness of each borrower. Unless extenuating circumstances exist, Patriot limits the extension of credit on commercial real estate loans to 75% of the market value of the underlying collateral. Patriot’s loan origination policy for multi-family residential real estate is limited to 80% of the market value of the underlying collateral. In the case of construction loans, the maximum loan-to-value is 75% of the “as completed” appraised value of the real estate project. Management monitors the appraised value of collateral on an on-going basis and additional collateral is requested when warranted. Real estate is the primary form of collateral, although other forms of collateral do exist and may include such assets as accounts receivable, inventory, marketable securities, time deposits, and other business assets.

Risk characteristics of the Company’s portfolio classes include the following:

Commercial Real Estate Loans

In underwriting commercial real estate loans, Patriot evaluates both the prospective borrower’s ability to make timely payments on the loan and the value of the property securing the loans. Repayment of such loans may be negatively impacted should the borrower default, the value of the property collateralizing the loan substantially decline, or there are declines in general economic conditions. Where the owner occupies the property, Patriot also evaluates the business’ ability to repay the loan on a timely basis and may require personal guarantees, lease assignments, and/or the guarantee of the operating company.

During the three and six months ended June 30, 2024 and 2023, Patriot did not purchase any commercial real estate loans.

Residential Real Estate Loans

Patriot’s residential real estate loan portfolio consists primarily of purchased residential loans. The repayment of residential real estate loans, as well as the loans secured by residential real estate, may be negatively impacted if borrowers experience financial difficulties, if there is a significant decline in the value of the property securing the loan, or if there are declines in general economic conditions. In addition, during the second quarter of 2024 Patriot began originating mortgage loans through its mortgage origination unit based Jacksonville, Florida. During the three and six months ended June 30, 2024, Patriot purchased $38,000 and $86,000 residential real estate loans, respectively. During the three and six months ended 2023, Patriot did not purchase any residential real estate loans.

Commercial and Industrial Loans

Patriot’s commercial and industrial loan portfolio consists primarily of commercial business loans and lines of credit to businesses and professionals. These loans are generally for the financing of accounts receivable, purchases of inventory, purchases of new or used equipment, or for other short- or long-term working capital purposes. These loans are generally secured by business assets but are also occasionally offered on an unsecured basis. In granting these types of loans, Patriot considers the borrower’s cash flow as the primary source of repayment, supported by the value of collateral, if any, and personal guarantees, as applicable. Repayment of commercial and industrial loans may be negatively impacted by adverse changes in economic conditions, ineffective management, claims on the borrower’s assets by others that are superior to Patriot’s claims, a loss of demand for the borrower’s products or services, or the death or disability of the borrower or other key management personnel.

Patriot’s syndicated and leveraged loan portfolio totaled $5.7 million at both June 30, 2024 and December 31, 2023. The syndicated and leveraged loan is included in the commercial and industrial loan classification and is comprised of loan transaction led by a major financial institution, which is the Agent Bank or Lead Arranger, and is referred to as a syndicated loan or "Shared National Credit (SNC)". The SNC loan was determined to be complementary to the Bank’s existing commercial and industrial loan portfolio and product offerings. Further originations in this loan class are not expected.

Consumer and Other Loans

Patriot offers individual consumers various forms of credit including installment loans, credit cards, overdraft protection, auto loans and reserve lines of credit. Repayments of such loans are generally dependent on the personal income of the borrower, which may be negatively impacted by adverse changes in economic conditions. The Company does not place a high emphasis on originating these types of loans.

The Company has purchased unsecured consumer loans from a third party which are higher yielding loans of 2-5 year terms that are expected to incur an increased level of charge-offs. Loans outstanding under this program at June 30, 2024 and December 31, 2023 totaled $32.3 million and $48.5 million, respectively. No loans were purchased under this program for three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, the Bank purchased $4.3 million and $13.6 million unsecured consumer loans, respectively.

The Company does not originate any lending programs commonly referred to as subprime lending. Subprime lending generally targets borrowers with weakened credit histories that are typically characterized by payment delinquencies, previous charge-offs, judgments against the consumer, a history of bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burdened ratios.

During the three and six months ended June 30, 2024, Patriot did not purchase any home equity line of credit loans (“HELOC”). During the three and six months ended June 30, 2023, the Bank purchased HELOC loans of $1.5 million and $2.9 million, respectively.

Construction Loans

Construction loans are of a short-term nature, generally of eighteen months or less, that are secured by land and improvements intended for commercial, residential, or mixed-use development. Loan proceeds may be used for the acquisition of or improvements to the land under development and funds are generally disbursed as phases of construction are completed.

Included in this category are loans to construct single family homes where no contract of sale exists, based upon the experience and financial strength of the builder, the type and location of the property, and other factors. Construction loans tend to be personally guaranteed by the principal(s). Repayment of such loans may be negatively impacted by an inability to complete construction, a downturn in the market for new construction, by a significant increase in interest rates, or by decline in general economic conditions. The construction loans outstanding at June 30, 2024 and December 31, 2023 totaled $3.8 million and $4.3 million, respectively.

Construction to Permanent - Commercial Real Estate ("CRE")

Construction to permanent loans represent a one-time close of a construction facility with simultaneous conversion to an amortizing mortgage loan. Construction to permanent loans combine a short-term period similar to a construction loan, generally with a variable rate, and a longer term commercial real estate loan typically 20-25 years, resetting every five years to the Federal Home Loan Bank (“FHLB”) rate.

Close of the permanent facility typically occurs when events dictate, such as receipt of a certificate of occupancy and property stabilization, which is defined as cash flow sufficient to support a pre-defined minimum debt coverage ratio and other conditions and covenants particular to the loan. Construction facilities are typically variable rate instruments that, upon conversion to an amortizing mortgage loan, reset to a fixed rate instrument that is the greater of the in-force variable rate plus a predetermined spread over a reference rate (e.g., prime) or a minimum interest rate.

SBA Loans

Patriot originates SBA 7(a) loans, on which the SBA has historically provided guarantees of 75% of the principal balance. However, during the pandemic in 2021, the SBA temporarily increased the guarantees to 90% and reverted to 75% on October 1, 2021. The guaranteed portion of the Company’s SBA loans is generally sold in the secondary market with the unguaranteed portion held in the portfolio as a loan held for investment. SBA loans are for the purpose of providing working capital, financing the purchase of equipment, inventory, or commercial real estate and for other business purposes. Loans are guaranteed by the businesses' major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. SBA loans held for investment are included in the commercial real estate loans and commercial and industrial loan classifications, which totaled $31.8 million and $30.0 million as of June 30, 2024 and December 31, 2023, respectively. During the six months ended June 30, 2024, $5.5 million SBA loans previously classified as held for sale were transferred to held for investment. No held for sale SBA loans were transferred to held for investment during the six months ended June 30, 2023.

Small Business Administration Paycheck Protection Program

Under the Paycheck Protection Program of the CARES Act, small business loans were authorized to pay payroll and group health costs, salaries and commissions, mortgage and rent payments, utilities, and interest on other debt. The loans are provided through participating financial institutions that process loan applications and service the loans. The Bank participated in the SBA’s Paycheck Protection Program in 2021. Paycheck Protection Program loans totaled $131,000 and $133,000 as of June 30, 2024 and December 31, 2023, respectively, which are included in the commercial and industrial loan classifications.

Allowance for Credit Losses

The Company adopted ASU 2016-13 on January 1, 2023, which introduced the current expected credit loss ("CECL") methodology for estimating all expected losses over the life of a financial asset. Under the CECL methodology, the ACL is measured on a collective basis for pools of loans with similar risk characteristics. For loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. For all loan segments collectively evaluated, losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable forecast period losses are reverted to long-term historical averages. The estimated credit losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.

The Company estimates expected credit losses for pooled loans using a modeling method that incorporates probability of default and loss given default. The PD model employs a quarterly risk-rating transition method to estimate the probability of default by simulating loan downgrades and assigning increasing default probabilities to each loan. This captures the likelihood that borrowers will be unable to repay their loans according to the original terms. The LGD calculation considers characteristics such as collateral value and vintage, underlying collateral characteristics (e.g., CRE vs. residential, owner-occupied vs. investment), a floor for the LGD calculation (minimum loss in event of default regardless of collateral protection), and other relevant underwriting characteristics. Also calculated is the exposure at default. The probability of default is multiplied by the loss given default and the exposure at default. This calculation is forecasted for every year remaining in the life of each loan, and the results are aggregated to determine the necessary level of ACL for the pooled loans. Forecasted exposure at default can be influenced by prepayments speeds, which management elected to discount in part to reflect the expectation of slower voluntary prepayments in the face of an increasing interest rate environment.

Commercial and industrial loans include risks associated with borrower’s cash flow, debt service coverage and management’s expertise. These loans are subject to the risk that the Company may have difficulty converting collateral to a liquid asset if necessary, as well as risks associated with degree of specialization, mobility and general collectability in a default situation. These commercial loans may be subject to many different types of risks, including fraud, bankruptcy, economic downturn, deteriorated or non-existent collateral, and changes in interest rates.

Real estate construction loans include risks associated with the borrower’s credit-worthiness, contractor’s qualifications, borrower and contractor performance, and the overall risk and complexity of the proposed project. Construction lending is also subject to risks associated with sub-market dynamics, including population, employment trends and household income. During times of economic stress, this type of loan has typically had a greater degree of risk than other loan types.

Real estate mortgage loans consist of loans secured by commercial and residential real estate. Commercial real estate lending is divided into Investment CRE and Owner-Occupied CRE. Investment CRE is dependent upon 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 is utilized by a business for the purpose of providing the space needs for that business and the running of its operations. Repayment is dependent on the cash flow and successful operations of the business. Repayment of these loans may be adversely affected by conditions in the specific owner’s industry. Also, commercial real estate loans typically involve relatively large loan balances to a single borrower. Residential real estate lending risks are generally less significant than those of other loans. Real estate lending risks include fluctuations in the value of real estate, bankruptcies, economic downturn and customer financial problems.

Consumer loans carry a moderate degree of risk compared to other loans. They are generally more risky than traditional residential real estate loans, and carry generally low relative balances across a diverse borrowing pool. Risk of default is assessed based on FICO scores, debt to income ratios, historical loss rates other common consumer loan metrics. For the pool of purchased unsecured consumer loans, the risk of default and necessary ACL is assessed on an individual loan basis using a customized model that heavily weights payment/delinquency status, FICO scores, and remaining loan life until maturity.

The Company maintains an ACL for credit losses on unfunded lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a drawdown on the commitment. The ACL on unfunded loan commitments is classified as a liability account on the Consolidated Balance Sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of provision for credit losses. The allowance for credit losses on unfunded commitments was $235,000 at June 30, 2024 and $271,000 at December 31, 2023, respectively.

The following tables summarize the activity in the allowance for credit losses, allocated to segments of the loan portfolio, for the three and six months ended June 30, 2024 and 2023:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
Three Months Ended June 30, 2024
Allowance for credit losses:
March 31, 2024	$	5,620	$	671	$	1,199	$	6,280	$	7	$	—	$	—	$	13,777
Charge-offs	—		—		(404)		(1,849)		—		—		—		(2,253)
Recoveries	—		—		72		260		—		—		—		332
Provisions (credits)	2,338		7		348		442		(2)		—		—		3,133		(1)
June 30, 2024	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	—	$	14,989
Three Months Ended June 30, 2023
Allowance for credit losses:
March 31, 2023	$	9,809	$	853	$	1,799	$	12,251	$	21	$	47	$	—	$	24,780
Charge-offs	—		—		(4)		(2,516)		(150)		—		—		(2,670)
Recoveries	—		11		9		260		—		—		—		280
Provisions (credits)	230		163		(131)		1,280		162		4		—		1,708		(2)
June 30, 2023	$	10,039	$	1,027	$	1,673	$	11,275	$	33	$	51	$	—	$	24,098

(1) The provision on credit losses included in the above table for the three months ended June 30, 2024 does not include the credit on unfunded loan commitments of $41,000.

(2) The provision on credit losses included in the above table for the three months ended June 30, 2023 does not include the credit on unfunded loan commitments of $383,000.

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
Six Months Ended June 30, 2024
Allowance for credit losses:
December 31, 2023	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	—	$	15,925
Impact of ASC 326 Adoption	—		—		—		—		—		—		—		—
Charge-offs	(158)		(21)		(814)		(4,372)		—		—		—		(5,365)
Recoveries	—		—		78		565		—		—		—		643
Provisions (credits)	2,027		92		682		1,097		1		(113)		—		3,786		(3)
June 30, 2024	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	—	$	14,989
Six Months Ended June 30, 2023
Allowance for credit losses:
December 31, 2022	$	6,966	$	665	$	1,403	$	1,207	$	24	$	10	$	35	$	10,310
Charge-offs	—		—		(6)		(4,312)		(150)		—		—		(4,468)
Recoveries	—		11		16		433		—		—		—		460
Provisions (credits)	1,447		162		41		2,970		163		12		—		4,795		(4)
June 30, 2023	$	10,039	$	1,027	$	1,673	$	11,275	$	33	$	51	$	—	$	24,098

(3) The provision on credit losses for the six months ended June 30, 2024 does not include the credit on unfunded loan commitments of $36,000.

(4) The provision on credit losses for the six months ended June 30, 2023 does not include the credit on unfunded loan commitments of $1.3 million.

The following tables summarize, by loan portfolio segment, the amount of loans receivable evaluated individually and collectively for impairment as of June 30, 2024:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to  Permanent  - CRE		Total
June 30, 2024
Allowance for credit losses:
Individually evaluated loans	$	5,717	$	—	$	—	$	—	$	—	$	—	$	5,717
Collectively evaluated loans	2,241		678		1,215		5,133		5		—		9,272
Total allowance for credit losses	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	14,989
Loans receivable, gross:
Individually evaluated loans	$	27,675	$	172	$	5,686	$	—	$	—	$	2,357	$	35,890
Collectively evaluated loans	430,881		99,247		129,058		77,397		3,829		—		740,412
Total loans receivable, gross	$	458,556	$	99,419	$	134,744	$	77,397	$	3,829	$	2,357	$	776,302

The following tables presents the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment based on impairment method as of December 31, 2023:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Total
December 31, 2023
Allowance for credit losses:
Individually evaluated for impairment	$	3,813	$	—	$	392	$	—	$	—	$	—	$	4,205
Collectively evaluated for impairment	2,276		607		877		7,843		4		113		11,720
Total allowance for credit losses	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	15,925
Loans receivable, gross:
Individually evaluated for impairment	$	12,775	$	—	$	3,904	$	—	$	454	$	—	$	17,133
Collectively evaluated for impairment	459,318		106,783		159,661		99,688		3,812		2,464		831,726
Total loans receivable, gross	$	472,093	$	106,783	$	163,565	$	99,688	$	4,266	$	2,464	$	848,859

Patriot monitors the credit quality of its loans receivable on an ongoing basis. Credit quality is monitored by reviewing certain indicators, including cash flow from business operations, loan to value ratios, debt service coverage ratios, and credit scores.

Patriot employs a risk rating system as part of the risk assessment of its loan portfolio. At origination, credit officers are required to assign a risk rating to each loan in their portfolio, which is ratified or modified by the Loan Committee to which the loan is submitted for approval. If financial developments occur on a loan in the credit officer’s portfolio of responsibility, the risk rating is reviewed and adjusted, as applicable. In carrying out its oversight responsibilities, the Loan Committee can adjust a risk rating based on available information. In addition, the risk ratings on all commercial loans over $250,000 are reviewed by the Credit Department either annually or biannually, or every 4 years, depending upon the amount of the bank’s exposure and other credit metrics.

Additionally, Patriot retains an independent third-party loan review firm to perform a semi-annual analysis of the results of its risk rating process. The semi-annual review is based on a randomly selected sample of loans within established parameters (e.g., value, concentration), in order to assess and validate the risk ratings assigned to individual loans. Any changes to the assigned risk ratings, based on the semi-annual review, are required to be reported to the Audit Committee of the Board of Directors.

When assigning a risk rating to a loan, management utilizes the Bank’s internal eleven-point risk rating system. An asset is considered “special mention” when it has a potential weakness based on objective evidence, but does not currently expose the Company to sufficient risk to warrant classification in one of the following categories:

•Substandard: An asset is classified “substandard” if it is not adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Substandard assets have well defined weaknesses based on objective evidence, and are characterized by the distinct possibility that the Company will sustain some loss, if noted deficiencies are not corrected.

•Doubtful: Assets classified as “doubtful” have all of the weaknesses inherent in those classified as “substandard”, with the added characteristic that the identified weaknesses make collection or liquidation-in-full improbable, on the basis of currently existing facts, conditions, and values.

Charge-offs of loans to reduce the loan to its recoverable value that are solely collateral dependent, generally occur immediately upon confirmation of the partial loss amount. Loans that are cash flow dependent are modeled to reflect the expected cash flows through expected loan maturity, including any proceeds from refinancing or principal curtailment. A specific reserve is established for the amount by which the net investment in the loan exceeds the present value of discounted cash flows. Charge-offs on cash flow dependent loans also generally occur immediately upon confirmation of the partial loss amount. If either type of loan is classified as "Loss”, meaning full loss on the loan is expected, the full balance of the loan receivable is charged off, regardless of the potential recovery from a sale of the underlying collateral. Any amount that may be recovered on the sale of collateral underlying a loan is recognized as a “recovery” in the period in which the collateral is sold. In accordance with Federal Financial Institutions Examination Council published policies establishing uniform criteria for the classification of retail credit based on delinquency status, “Open-end” and “Closed-end” credits are charged off when 180 days and 90 days delinquent, respectively. Loans receivable that are part of the unsecured loan purchase program are charged-off in full when the loan is 90 days past due.

The allowance for credit losses may increase to reflect the decline in the performance of the loan portfolio and the higher level of incurred losses.

Loan Portfolio Vintage Analysis

The following tables summarize loan amortized cost by vintage, credit quality indicator, class of loans and charge-offs based on year of origination as of June 30, 2024:

	Term of Loans by Origination
As of June 30, 2024:	2024		2023		2022		2021		2020		Prior		Revolving		Total Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	107,117	$	139,305	$	96,020	$	3,354	$	76,706	$	—	$	422,502
Special mention	—		—		6,461		901		—		445		—		7,807
Substandard	—		—		3,002		13,276		279		11,690		—		28,247
Total	—		107,117		148,768		110,197		3,633		88,841		—		458,556
Current period gross charge-offs	—		—		—		—		—		158		—		158
Residential Real Estate:
Pass	—		—		1,235		2,851		10,344		81,518		700		96,648
Special mention	—		—		—		—		1,053		1,416		—		2,469
Substandard	—		—		—		—		—		302		—		302
Total	—		—		1,235		2,851		11,397		83,236		700		99,419
Current period gross charge-offs	—		—		—		—		—		21		—		21
Commercial and Industrial:
Pass	678		1,591		14,917		21,394		1,064		8,215		77,076		124,935
Special mention	—		5		19		40		—		968		—		1,032
Substandard	—		268		622		844		5,725		1,214		104		8,777
Total	678		1,864		15,558		22,278		6,789		10,397		77,180		134,744
Current period gross charge-offs	—		—		—		—		—		814		—		814
Consumer and Other:
Pass	25		4,053		24,814		2,986		—		18,170		26,084		76,132
Substandard	—		112		386		23		—		429		315		1,265
Total	25		4,165		25,200		3,009		—		18,599		26,399		77,397
Current period gross charge-offs	—		185		3,812		375		—		—		—		4,372
Construction:
Pass	—		—		—		3,829		—		—		—		3,829
Total	—		—		—		3,829		—		—		—		3,829
Construction to Permanent - CRE:
Substandard	—		—		—		2,357		—		—		—		2,357
Total	—		—		—		2,357		—		—		—		2,357
Total loans	$	703	$	113,146	$	190,761	$	144,521	$	21,819	$	201,073	$	104,279	$	776,302
Total Current period gross charge-offs	$	—	$	185	$	3,812	$	375	$	—	$	993	$	—	$	5,365
Loans receivable, gross:
Pass	$	703	$	112,761	$	180,271	$	127,080	$	14,762	$	184,609	$	103,860	$	724,046
Special mention	—		5		6,480		941		1,053		2,829		—		11,308
Substandard	—		380		4,010		16,500		6,004		13,635		419		40,948
Total Loans receivable, gross	$	703	$	113,146	$	190,761	$	144,521	$	21,819	$	201,073	$	104,279	$	776,302
Current period gross charge-offs	$	—	$	185	$	3,812	$	375	$	—	$	993	$	—	$	5,365

The following tables summarize loan amortized cost by vintage, credit quality indicator, class of loans and charge-offs based on year of origination as of December 31, 2023:

	Term of Loans by Origination
As of December 31, 2023:	2023		2022		2021		2020		2019		Prior		Revolving		Total Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	104,683	$	138,091	$	111,308	$	3,401	$	31,832	$	63,526	$	—	$	452,841
Special mention	—		6,482		—		—		—		—		—		6,482
Substandard	—		1,799		—		280		10,000		691		—		12,770
Total	104,683		146,372		111,308		3,681		41,832		64,217		—		472,093
Current period gross charge-offs	—		—		—		—		6,341		5		—		6,346
Residential Real Estate:
Pass	—		1,251		2,975		11,577		15,770		74,596		614		106,783
Total	—		1,251		2,975		11,577		15,770		74,596		614		106,783
Current period gross charge-offs	—		—		—		—		—		515		—		515
Commercial and Industrial:
Pass	2,696		13,916		23,099		8,004		9,578		7,024		96,431		160,748
Special mention	6		348		—		—		37		11		104		506
Substandard	16		—		801		—		401		1,093		—		2,311
Total	2,718		14,264		23,900		8,004		10,016		8,128		96,535		163,565
Current period gross charge-offs	—		182		85		—		516		144		—		927
Consumer and Other:
Pass	6,470		36,668		4,724		—		5,590		14,314		30,945		98,711
Substandard	197		645		61		—		—		—		74		977
Total	6,667		37,313		4,785		—		5,590		14,314		31,019		99,688
Current period gross charge-offs	114		9,013		1,280		—		6		66		—		10,479
Construction:
Pass	—		—		3,812		—		—		—		—		3,812
Substandard	—		—		—		—		454		—		—		454
Total	—		—		3,812		—		454		—		—		4,266
Current period gross charge-offs	—		—		150		—		—		—		—		150
Construction to Permanent - CRE:
Special mention	—		—		2,464		—		—		—		—		2,464
Total	—		—		2,464		—		—		—		—		2,464
Total loans	$	114,068	$	199,200	$	149,244	$	23,262	$	73,662	$	161,255	$	128,168	$	848,859
Total Current period gross charge-offs	$	114	$	9,195	$	1,515	$	—	$	6,863	$	730	$	—	$	18,417
Loans receivable, gross:
Pass	$	113,849	$	189,926	$	145,918	$	22,982	$	62,770	$	159,460	$	127,990	$	822,895
Special mention	6		6,830		2,464		—		37		11		104		9,452
Substandard	213		2,444		862		280		10,855		1,784		74		16,512
Loans receivable, gross	$	114,068	$	199,200	$	149,244	$	23,262	$	73,662	$	161,255	$	128,168	$	848,859
Total Current period gross charge-offs	$	114	$	9,195	$	1,515	$	—	$	6,863	$	730	$	—	$	18,417

Loan Portfolio Aging Analysis

The following tables summarize performing and non-performing (i.e., non-accruing) loans receivable by portfolio segment, by aging category, by delinquency status as of June 30, 2024.

(In thousands)	Performing (Accruing) Loans
As of June 30, 2024:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	7,540	$	6,748	$	—	$	14,288	$	404,989	$	419,277	$	3,225	$	422,502
Special mention	901		—		—		901		6,906		7,807		—		7,807
Substandard	589		—		1,178		1,767		2,029		3,796		24,451		28,247
	9,030		6,748		1,178		16,956		413,924		430,880		27,676		458,556
Residential Real Estate:
Pass	177		33		—		210		96,438		96,648		—		96,648
Special mention	—		—		—		—		2,469		2,469		—		2,469
Substandard	—		—		—		—		—		—		302		302
	177		33		—		210		98,907		99,117		302		99,419
Commercial and Industrial:
Pass	1,112		—		—		1,112		119,856		120,968		3,967		124,935
Special mention	—		—		—		—		1,032		1,032		—		1,032
Substandard	481		514		—		995		5,978		6,973		1,804		8,777
	1,593		514		—		2,107		126,866		128,973		5,771		134,744
Consumer and Other:
Pass	1,002		423		—		1,425		74,707		76,132		—		76,132
Substandard	—		—		—		—		—		—		1,265		1,265
	1,002		423		—		1,425		74,707		76,132		1,265		77,397
Construction:
Pass	—		—		—		—		3,829		3,829		—		3,829
Substandard	—		—		—		—		—		—		—		—
	—		—		—		—		3,829		3,829		—		3,829
Construction to Permanent - CRE:
Substandard	—		—		—		—		—		—		2,357		2,357
	—		—		—		—		—		—		2,357		2,357
Total	$	11,802	$	7,718	$	1,178	$	20,698	$	718,233	$	738,931	$	37,371	$	776,302
Loans receivable, gross:
Pass	$	9,831	$	7,204	$	—	$	17,035	$	699,819	$	716,854	$	7,192	$	724,046
Special mention	901		—		—		901		10,407		11,308		—		11,308
Substandard	1,070		514		1,178		2,762		8,007		10,769		30,179		40,948
Loans receivable, gross	$	11,802	$	7,718	$	1,178	$	20,698	$	718,233	$	738,931	$	37,371	$	776,302

The following tables summarize performing and non-performing loans (i.e., non-accruing) receivable by portfolio segment, by aging category, by delinquency status as of December 31, 2023.

(In thousands)	Performing (Accruing) Loans
As of December 31, 2023:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	2,274	$	231	$	—	$	2,505	$	448,707	$	451,212	$	1,629	$	452,841
Special mention	—		—		—		—		6,482		6,482		—		6,482
Substandard	—		—		—		—		1,624		1,624		11,146		12,770
	2,274		231		—		2,505		456,813		459,318		12,775		472,093
Residential Real Estate:
Pass	1,439		—		—		1,439		105,344		106,783		—		106,783
	1,439		—		—		1,439		105,344		106,783		—		106,783
Commercial and Industrial:
Pass	420		10		—		430		157,335		157,765		2,983		160,748
Special mention	—		348		—		348		158		506		—		506
Substandard	526		—		—		526		847		1,373		938		2,311
	946		358		—		1,304		158,340		159,644		3,921		163,565
Consumer and Other:
Pass	1,327		1,015		341		2,683		96,028		98,711		—		98,711
Substandard	—		—		—		—		—		—		977		977
	1,327		1,015		341		2,683		96,028		98,711		977		99,688
Construction:
Pass	—		—		—		—		3,812		3,812		—		3,812
Substandard	—		—		—		—		—		—		454		454
	—		—		—		—		3,812		3,812		454		4,266
Construction to Permanent - CRE:
Special mention	—		—		—		—		2,464		2,464		—		2,464
	—		—		—		—		2,464		2,464		—		2,464
Total	$	5,986	$	1,604	$	341	$	7,931	$	822,801	$	830,732	$	18,127	$	848,859
Loans receivable, gross:
Pass	$	5,460	$	1,256	$	341	$	7,057	$	811,226	$	818,283	$	4,612	$	822,895
Special mention	—		348		—		348		9,104		9,452		—		9,452
Substandard	526		—		—		526		2,471		2,997		13,515		16,512
Loans receivable, gross	$	5,986	$	1,604	$	341	$	7,931	$	822,801	$	830,732	$	18,127	$	848,859

The following tables summarize non-performing (i.e., non-accruing) loans by aging category and status, within the applicable loan portfolio segment as of June 30, 2024 and December 31, 2023:

(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of June 30, 2024:
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	1,653	$	1,572	$	3,225	$	—	$	3,225
Substandard	—		581		1,306		1,887		22,564		24,451
Residential Real Estate:
Substandard	—		—		302		302		—		302
Commercial and Industrial:
Pass	—		2,568		906		3,474		493		3,967
Substandard	—		273		1,253		1,526		278		1,804
Consumer and Other:
Substandard	—		—		1,202		1,202		63		1,265
Construction to permanent - CRE:
Substandard	2,357		—		—		2,357		—		2,357
Total non-accruing loans	$	2,357	$	5,075	$	6,541	$	13,973	$	23,398	$	37,371
As of December 31, 2023:
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	—	$	1,629	$	1,629	$	—	$	1,629
Substandard	—		770		439		1,209		9,937		11,146
Commercial and Industrial:
Pass	—		—		2,054		2,054		929		2,983
Substandard	—		371		535		906		32		938
Consumer and Other:
Substandard	—		16		887		903		74		977
Construction:
Substandard	—		—		—		—		454		454
Total non-accruing loans	$	—	$	1,157	$	5,544	$	6,701	$	11,426	$	18,127

The accrual of interest on loans is discontinued at the time the loan is 90 days past due for payment unless the loan is well-secured and in process of collection. Consumer loans are typically charged off when they become 120 days past due (180 days for open ended consumer credit). Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual status or charged-off, at an earlier date, if collection of principal or interest is considered doubtful.

All interest accrued, but not collected for loans that are placed on non-accrual status or charged off, is reversed against interest income. The interest on these loans is generally accounted for on the cash-basis method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, future payments are reasonably assured, after at least six months of timely payment history. The Bank considers loans under $100,000 and consumer installment loans to be pools of smaller homogeneous loan balances, and therefore are collectively evaluated for impairment, and not individually measured for impairment.

If non-accrual loans had been performing in accordance with the original contractual terms, additional interest income (net of cash collected) of approximately $933,000 and $1.5 million would have been recognized during the three and six months ended June 30, 2024, respectively. During the three and six months ended June 30, 2023, additional interest income (net of cash collected) of approximately $133,000 and $268,000 would have been recognized, respectively.

Interest income collected and recognized on non-accruing loans for the three and six months ended June 30, 2024 was $205,000 and $226,000, respectively. During the three and six months ended June 30, 2023, interest income collected and recognized on non-accruing loans was $193,000 and $336,000, respectively.

Individually Evaluated Loans

The following table reflects information about the individually evaluated loans by class as of June 30, 2024 and December 31, 2023:

(In thousands)	June 30, 2024						December 31, 2023
	Recorded Investment		Principal Outstanding		Related Allowance		Recorded Investment		Principal Outstanding		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	5,111	$	8,111	$	—	$	2,838	$	5,879	$	—
Residential Real Estate	172		171		—		—		—		—
Commercial and Industrial	5,685		10,611		—		2,266		2,899		—
Construction	—		—		—		454		461		—
Construction to permanent - CRE	2,357		2,476		—		—		—		—
	13,325		21,369		—		5,558		9,239		—
With a related allowance recorded:
Commercial Real Estate	22,564		23,197		5,717		9,937		10,137		3,813
Commercial and Industrial	1		1,388		—		1,638		3,159		392
	22,565		24,585		5,717		11,575		13,296		4,205
Individually evaluated loans, Total:
Commercial Real Estate	27,675		31,308		5,717		12,775		16,016		3,813
Residential Real Estate	172		171		—		—		—		—
Commercial and Industrial	5,686		11,999		—		3,904		6,058		392
Construction	—		—		—		454		461		—
Construction to permanent - CRE	2,357		2,476		—		—		—		—
Total	$	35,890	$	45,954	$	5,717	$	17,133	$	22,535	$	4,205

The following table summarizes additional information regarding individually evaluated loans by class for the three and six months ended June 30, 2024 and 2023.

	Three Month Ended June 30,								Six Months Ended June 30,
(In thousands)	2024				2023				2024				2023
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	5,107	$	—	$	387	$	—	$	5,108	$	—	$	680	$	—
Residential Real Estate	172		8		748		24		172		8		992		27
Commercial and Industrial	5,026		23		2,046		68		4,513		27		2,181		150
Consumer and Other	—		—		128		—		—		—		293		—
Construction	—		—		579		—		—		—		993		—
Construction to permanent - CRE	2,411		—		—		—		2,433		—		—		—
	12,716		31		3,888		92		12,226		35		5,139		177
With a related allowance recorded:
Commercial Real Estate	22,763		159		10,405		—		22,942		159		10,651		154
Residential Real Estate	—		—		1,352		—		—		—		1,468		—
Commercial and Industrial	217		—		4,052		98		577		—		4,341		139
Consumer and Other	—		—		18		—		—		—		10		—
	22,980		159		15,827		98		23,519		159		16,470		293
Individually evaluated loans, Total:
Commercial Real Estate	27,870		159		10,792		—		28,050		159		11,331		154
Residential Real Estate	172		8		2,100		24		172		8		2,460		27
Commercial and Industrial	5,243		23		6,098		166		5,090		27		6,522		289
Consumer and Other	—		—		146		—		—		—		303		—
Construction	—		—		579		—		—		—		993		—
Construction to permanent - CRE	2,411		—		—		—		2,433		—		—		—
Total	$	35,696	$	190	$	19,715	$	190	$	35,745	$	194	$	21,609	$	470

Credit losses for loans that no longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and estimated on an individual basis (individually evaluated loans). Individual evaluations are performed for nonaccrual loans in excess of $100,000 as well as selected substandard loans. Specific allowances were estimated based on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows.

For collateral dependent loans, appraisal reports of the underlying collateral have been obtained from independent licensed appraisal firms. For non-performing loans, the independently determined appraised values were first reduced by a 5.8% discount to reflect the Bank’s experience selling Other Real Estate Owned ("OREO") properties, and were further reduced by 8% in selling costs, in order to estimate the potential loss, if any, that may eventually be realized. Performing loans are monitored to determine when, if at all, additional credit loss reserves may be required for a loss of underlying collateral value. For cash flow dependent loans, the Bank determined the reserve based on the present value of expected future cash flows discounted at the loan's effective interest rate.

Loans not requiring specific reserves had fair values exceeding the total recorded investment, supporting the net investment in the loan which includes principal balance, unamortized fees and costs and accrued interest, if any. Once a borrower is in default, Patriot is under no obligation to advance additional funds on unused commitments.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

On a case-by-case basis, Patriot may agree to modify the contractual terms of a borrower’s loan to assist customers who may be experiencing financial difficulty. Substantially all loan modifications involve lowering the monthly payments on such loans through either a reduction in interest rate below market rate, an extension of the term of the loan, or a combination of adjusting these two contractual attributes. Loan modifications may also result in the forgiveness of principal or accrued interest. In addition, when modifying commercial loans, Patriot frequently obtains additional collateral or guarantor support. If the borrower has performed under the existing contractual terms of the loan and Patriot’s underwriters 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 six months ended June 30, 2024 and 2023, 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 six months ended June 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. As of June 30, 2024 and December 31, 2023, there were no commitments to advance additional funds under the modified loans.

XML

Loans Held for Sale

6 Months Ended

Jun. 30, 2024

Receivables [Abstract]

Loans Held for Sale

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 June 30, 2024, SBA loans held for sale was $4.4 million, consisting only of $4.4 million SBA commercial and industrial loans. There were $9.9 million of SBA loans held for sale at December 31, 2023, consisting of $3.5 million SBA commercial and industrial loans and $6.4 million SBA commercial real estate loans. During the three and six months ended June 30, 2024, $5.5 million SBA loans previously classified as held for sale were transferred to held for investment. No SBA held for sale loans were transferred to held for investment in the three and six months ended June 30, 2023.

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 amount of such loans serviced, but owned by a third party, amounted to approximately $44.2 million and $47.5 million at June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024 and December 31, 2023, the servicing asset has a carrying value of $790,000 and $857,000, respectively, and fair value of $873,000 and $932,000, respectively. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets. The servicing asset is included in other assets on the Consolidated Balance Sheets.

The following table presents an analysis of the activity in the SBA servicing assets for the three and six months ended June 30, 2024 and 2023:

(In thousands)	Three Month Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning balance	$	902	$	893	$	857	$	886
Servicing rights capitalized	9		24		73		58
Servicing rights amortized	(15)		(11)		(34)		(22)
Servicing rights disposed	(106)		(24)		(106)		(40)
Ending balance	$	790	$	882	$	790	$	882

Loans held for sale - Consumer Loans

Patriot Bank's Digital Payments Group has entered into a Program Management Agreement with a Buyer. Under the agreement, Patriot originates various types of consumer loans that are marketed by the buyer. As of June 30, 2024, the Bank had credit card loans held for sale totaling $8.4 million. The credit card loans 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 2024, the Bank reentered the residential mortgage business. The Residential Mortgage Division, located in Jacksonville, FL, generates the loans and typically sells them to third parties. As of June 30, 2024, the Company reported residential mortgage loans held for sale totaling $1.3 million. These loans are recorded at the lower of aggregate cost or market value. For the three and six months ended June 30, 2024, a total gain on sale of $10,000 was recorded and no servicing asset was recognized.

XML

Deposits

6 Months Ended

Jun. 30, 2024

Deposits [Abstract]

Deposits

Deposits

The following table presents the balance of deposits held, by category as of June 30, 2024 and December 31, 2023.

(In thousands)	June 30, 2024		December 31, 2023
Non-interest bearing	$	93,736	$	110,056
Interest bearing:
Negotiable order of withdrawal accounts	26,354		33,035
Savings deposits	39,456		44,104
Interest bearing DDA	227,253		171,577
Money market	167,836		200,280
Certificates of deposit, $250,000 or less	162,361		175,988
Certificates of deposit, more than $250,000	62,704		64,745
Brokered deposits	21,202		40,526
Interest bearing, Total	707,166		730,255
Total Deposits	$	800,902	$	840,311

The deposits from Digital Payments division are included in the non-interest-bearing deposits, interest bearing DDA and money market deposits, and totaled approximately $255.8 million and $213.4 million as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024, contractual maturities of Certificates of Deposit (“CDs”), and brokered deposits is summarized as follows:

(In thousands)	Certificates of Deposit $250,000 or less		Certificates of Deposit more than $250,000		Brokered Deposits		Total
1 year or less	$	141,847	$	50,467	$	14,529	$	206,843
More than 1 year through 2 years	17,207		9,335		251		26,793
More than 2 years through 3 years	3,056		2,902		6,422		12,380
More than 3 years through 4 years	70		—		—		70
More than 4 years through 5 years	181		—		—		181
	$	162,361	$	62,704	$	21,202	$	246,267

XML

Derivatives

6 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

Derivatives Not Designated in Hedge Relationships

Patriot is party to interest rate swap derivatives that are not designated as hedging instruments. Under a program, Patriot will execute interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Patriot executes with a third party, such that Patriot minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties.

As of June 30, 2024 and December 31, 2023, Patriot did not have any cash pledged for collateral on its interest rate swaps. No net gain or loss was recognized in other noninterest income on the Consolidated Statements of Operations during the three and six months ended June 30, 2024 and 2023.

Information about the valuation methods used to measure the fair value of derivatives is provided in Note 13 to the Consolidated Financial Statements.

The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):

(In thousands)	Notional Amount	Maturity (Years)	Fixed Rate		Variable Rate	Fair Value
June 30, 2024
Classified in Other Assets:
3rd party interest rate swap	1,309	5.00	4.38	%	1 Mo. SOFR + 2.00%	95
Classified in Other Liabilities:
Customer interest rate swap	1,309	5.00	4.38	%	1 Mo. SOFR + 2.00%	(95)
December 31, 2023
Classified in Other Assets:
3rd party interest rate swap	1,327	5.50	4.38	%	1 Mo. SOFR + 2.00%	74
Classified in Other Liabilities:
Customer interest rate swap	1,327	5.50	4.38	%	1 Mo. SOFR + 2.00%	(74)

XML

Share-based Compensation and Employee Benefit Plan

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation and Employee Benefit Plan

Share-Based Compensation and Employee Benefit Plan

In 2011, the Company adopted the Patriot National Bancorp, Inc. 2012 Stock Plan (the “2012 Plan”). The 2012 Plan was amended in 2020 and renamed as the Patriot National Bancorp, Inc. 2020 Restricted Stock Award Plan (the “2020 Plan”). A copy of the 2020 Plan was filed as Exhibit 10.1 to the Company’s Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2020 filed on April 30, 2021. The 2020 Plan provides an incentive to directors and employees of the Company by the grant of restricted stock awards (“RSA”).On November 10, 2022, the Board of Directors approved the Amendment and Restatement of the 2020 Plan (the “Amended and Restated 2020 Plan”), which was approved and ratified by shareholders of the Company on December 14, 2022.

The 2020 Plan was amended primarily to (i) reduce the total number of shares authorized for issuance thereunder from 3,000,000 shares to 400,000 shares; and (ii) limit the maximum number of shares of Company’s Common Stock granted during a single fiscal year to any non-employee director, together with any cash fees paid to such director, to be no more than a total value of $300,000. As of June 30, 2024, 127,665 shares of stock were available for issuance under the Plan. In accordance with the terms of the Plan, the vesting of RSAs may be accelerated at the discretion of the Compensation Committee of the Board of Directors. The Compensation Committee sets the terms and conditions applicable to the vesting of RSAs. RSAs granted to directors and employees generally vest in quarterly or annual installments over a three, four or five year period from the date of grant.

The following is a summary of the status of the Company’s restricted shares and changes for the three and six months ended June 30, 2024 and 2023:

Three months ended June 30, 2024:	Number of Shares Awarded	Weighted Average Grant Date Fair Value
Unvested at March 31, 2024	27,665	$5.24
Granted	81,174	$3.79
Unvested at June 30, 2024	108,839	$4.16
Six months ended June 30, 2024:
Unvested at December 31, 2023	17,506	$6.09
Granted	91,333	$3.79
Unvested at June 30, 2024	108,839	$4.16

Three months ended June 30, 2023	Number of Shares Awarded	Weighted Average Grant Date Fair Value
Unvested at March 31, 2023	22,660	$7.11
Unvested at June 30, 2023	22,660	$7.11
Six months ended June 30, 2023:
Unvested at December 31, 2022	22,660	$7.11
Unvested at June 30, 2023	22,660	$7.11

The Company recognizes compensation expense for all director and employee share-based compensation awards on a straight-line basis over the requisite service period, which is equal to the vesting schedule of each award, for each vesting portion of an award equal to its grant date fair value.

Unrecognized compensation expense attributable to the unvested restricted shares outstanding as of June 30, 2024 amounted to $464,000, which amount is expected to be recognized over the weighted average remaining life of the awards of 2.6 years.

For the three and six months ended June 30, 2024, the Company recognized total share-based compensation expense of $41,000 and $65,000, respectively. The share-based compensation attributable to employees of Patriot amounted to $30,000 and $45,000, respectively. Included in share-based compensation expense attributable to Patriot’s external directors, were $11,000 and $20,000, respectively. The directors received total compensation of $60,000 and $128,000 respectively, which amounts are included in other operating expenses in the consolidated statements of operations.

For the three and six months ended June 30, 2023, the Company recognized total share-based compensation expense of $23,000 and $46,000, respectively. The share-based compensation attributable to employees of Patriot amounted to $14,000 and $28,000, respectively. Included in share-based compensation expense were $9,000 and $18,000 attributable to Patriot’s external directors, who received total compensation of $53,000 and $108,000 for each of those periods, respectively.

Dividends

The Company has not paid any dividends since 2020 and has no present plans to pay dividends.

Retirement Plan

Patriot offers employees participation in the Patriot Bank, N.A. 401(k) Savings Plan (the "401(k) Plan") under Section 401(k) of the Internal Revenue Code, along with the ROTH feature to the Plan. The 401(k) Plan covers substantially all employees who have completed one month of service, are 21 years of age and who elect to participate. Under the terms of the 401(k) Plan, participants can contribute up to the maximum amount allowed, subject to Federal limitations. At its discretion, Patriot may match eligible participating employee contributions at the rate of 50% of the first 6% of the participants’ salary contributed to the 401(k) Plan. During the three and six months ended June 30, 2024, Patriot made matching contributions to the 401(k) Plan of $88,000 and $168,000, respectively. During the three and six months ended June 30, 2023, compensation expense under the 401(k) aggregated $82,000 and $157,000, respectively.

XML

Earnings per share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Earnings per share

Earnings per share

The Company is required to present basic earnings per share and diluted earnings per share in its Consolidated Statements of Operations. Basic earnings per share amounts are computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share reflects additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential shares of common stock that may be issued by the Company relate to outstanding unvested RSAs granted to directors and employees. The dilutive effect resulting from these potential shares is determined using the treasury stock method. The Company is also required to provide a reconciliation of the numerator and denominator used in the computation of both basic and diluted earnings per share.

The following table summarizes the computation of basic and diluted loss per share for the three and six months ended June 30, 2024 and 2023:

(Net loss in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Basis loss per share:
Net loss attributable to Common shareholders	$	(3,081)		$	(615)		$	(3,380)		$	(1,314)
Divided by:
Weighted average shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Basic loss per share of common stock	$	(0.77)		$	(0.16)		$	(0.85)		$	(0.33)
Diluted loss per share:
Net loss attributable to Common shareholders	$	(3,081)		$	(615)		$	(3,380)		$	(1,314)
Weighted average shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Effect of potentially dilutive restricted shares of common stock	—		(1)	—		(2)	—		(3)	—		(4)
Divided by:
Weighted average diluted shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Diluted loss per share of common stock	$	(0.77)		$	(0.16)		$	(0.85)		$	(0.33)

(1)	The weighted average diluted shares outstanding does not include 8,695 anti-dilutive restricted shares of common stock for the three months ended June 30, 2024.
(2)	The weighted average diluted shares outstanding does not include 1,528 anti-dilutive restricted shares of common stock for the three months ended June 30, 2023.
(3)	The weighted average diluted shares outstanding does not include 4,330 anti-dilutive restricted shares of common stock for the six months ended June 30, 2024.
(4)	The weighted average diluted shares outstanding does not include 427 anti-dilutive restricted shares of common stock for the six months ended June 30, 2023.

XML

Financial Instruments With Off-balance Sheet Risk

6 Months Ended

Jun. 30, 2024

Risks and Uncertainties [Abstract]

Financial Instruments with Off-Balance-Sheet Risk

Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, Patriot is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet. The contractual amounts of these instruments reflect the extent of involvement Patriot has in particular classes of financial instruments.

The contractual amount of commitments to extend credit and standby letters of credit represents the maximum amount of potential accounting loss should: the contract be fully drawn upon; the customer default; and the value of any existing collateral become worthless. Patriot applies its credit policies to entering commitments and conditional obligations and, as with its lending activates, evaluates each customer’s creditworthiness on a case-by-case basis. Management believes that it effectively mitigates the credit risk of these financial instruments through its credit approval processes, establishing credit limits, monitoring the on-going creditworthiness of recipients and grantees, and the receipt of collateral as deemed necessary.

Financial instruments with credit risk at June 30, 2024 and December 31, 2023 are as follows:

(In thousands)	June 30, 2024		December 31, 2023
Commitments to extend credit:
Unused lines of credit	$	77,242	$	63,435
Undisbursed construction loans	861		2,607
Home equity lines of credit	25,806		26,488
	$	103,909	$	92,530

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments to extend credit generally have fixed expiration dates or other termination clauses, and may require payment of a fee by the borrower. Since these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary upon extending credit, is based on management’s credit evaluation of the customer. Collateral held varies, but may include commercial property, residential property, deposits and securities. Patriot has established an allowance for credit loss of $235,000 and $271,000 as of June 30, 2024 and December 31, 2023, respectively, which is included in accrued expenses and other liabilities.

Standby letters of credit are written commitments issued by Patriot to guarantee the performance of a customer to a third party. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loan facilities to customers. Guarantees that are not derivative contracts are recorded at fair value and included in the Consolidated Balance Sheet.

XML

Regulatory and Operational Matters

6 Months Ended

Jun. 30, 2024

Regulatory Capital Requirements under Banking Regulations [Abstract]

Regulatory and Operational Matters

Regulatory and Operational Matters

Federal and state regulatory authorities have adopted standards requiring financial institutions to maintain increased levels of capital. Effective January 1, 2015, federal banking agencies imposed four minimum capital requirements on a community bank’s risk-based capital ratios consisting of Total Capital, Tier 1 Capital, Common Equity Tier 1 (“CET1”) Capital, and a Tier 1 Leverage Capital ratio. The risk-based capital ratios measure the adequacy of a bank's capital against the riskiness of its on- and off-balance sheet assets and activities. Failure to maintain adequate capital is a basis for "prompt corrective action" or other regulatory enforcement action. In assessing a bank's capital adequacy, regulators also consider other factors such as interest rate risk exposure, liquidity, funding and market risks, quality and level of earnings, concentrations of credit, quality of loans and investments, nontraditional activity risk, policy effectiveness, and management's overall ability to monitor and control risk.

In September 2019, the community bank leverage ratio (“CBLR”) framework was jointly issued by the Federal Deposit Insurance Corporation ("FDIC"), the Office of the Comptroller of the Currency (“OCC”) and FRB. The final rule gives qualifying community banks the option to use a simplified measure of capital adequacy instead of risk based capital, beginning with their March 31, 2020 Call Report. Under the final rule a community bank may qualify for the CBLR framework if it has a Tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance sheet exposures and trading assets and liabilities. The CARES Act directed the federal banking agencies to issue an interim rule temporarily lowering the CBLR ratio to 8% which the agencies did with a transition back to 9% beginning January 1, 2022.

Capital adequacy is one of the most important factors used to determine the safety and soundness of individual banks and the banking system. A community bank which meets the leverage ratio requirement and other CBLR framework requirements will not be subject to other capital and leverage requirements and will be considered "well capitalized."

From September 2021 to September 30, 2023, the Company elected to adopt the CBLR framework. In the fourth quarter of 2023, the Company elected to use the instituted regulatory risk-based capital approach.

Under the instituted regulatory framework, to be considered “well capitalized”, a financial institution must generally have a Total Capital ratio of at least 10%, a Tier 1 Capital ratio of at least 8.0%, a CET1 Capital ratio at least 6.5%, and a Tier 1 Leverage Capital ratio of at least 5%. However, regardless of a financial institution’s ratios, the OCC may require increased capital ratios or impose dividend restrictions based on the other factors it considers in assessing a bank’s capital adequacy. Under the final capital rules that became effective on January 1, 2015, there was a requirement for a CET1 capital conservation buffer of 2.5% of risk-weighted assets, which is in addition to the other minimum risk-based capital standards in the rule. Institutions that do not maintain this required capital buffer become subject to progressively more stringent limitations on the percentage of earnings that may be distributed to shareholders or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital conversation buffer of 2.5% has been included in the minimum capital adequacy ratios as of June 30, 2024.

The Company and Bank’s regulatory capital amounts and ratios at June 30, 2024 and December 31, 2023 are summarized as follows:

		June 30, 2024								December 31, 2023
		Patriot National Bancorp, Inc.				Patriot Bank, N.A.				Patriot National Bancorp, Inc.				Patriot Bank, N.A.
(Dollar amounts in thousands)		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to risk weighted assets):
Actual		$	84,432	9.84	%	$	96,204	11.21	%	$	89,727	10.00	%	$	100,683	11.22	%
To be Well Capitalized	(1)	—		—		85,784		10.00	%	—		—		89,732		10.00	%
For capital adequacy with Capital Buffer	(2)	—		—		90,073		10.50	%	—		—		94,218		10.50	%
For capital adequacy		68,647		8.00	%	68,627		8.00	%	71,788		8.00	%	71,785		8.00	%
Tier 1 Capital (to risk weighted assets):
Actual		65,705		7.66	%	87,477		10.20	%	73,282		8.17	%	94,238		10.50	%
To be Well Capitalized	(1)	—		—		68,627		8.00	%	—		—		71,785		8.00	%
For capital adequacy with Capital Buffer	(2)	—		—		72,916		8.50	%	—		—		76,272		8.50	%
For capital adequacy		51,485		6.00	%	51,470		6.00	%	53,841		6.00	%	53,839		6.00	%
Common Equity Tier 1 Capital (to risk weighted assets):
Actual		57,705		6.72	%	87,477		10.20	%	65,282		7.27	%	94,238		10.50	%
To be Well Capitalized	(1)	—		—		55,760		6.50	%	—		—		58,325		6.50	%
For capital adequacy with Capital Buffer	(2)	—		—		60,049		7.00	%	—		—		62,812		7.00	%
For capital adequacy		38,614		4.50	%	38,603		4.50	%	40,381		4.50	%	40,379		4.50	%
Tier 1 Leverage Capital (to average assets):
Actual		65,705		6.44	%	87,477		8.58	%	73,282		6.76	%	94,238		8.70	%
To be Well Capitalized	(1)	—		—		51,001		5.00	%	—		—		54,170		5.00	%
For capital adequacy		40,811		4.00	%	40,801		4.00	%	43,339		4.00	%	43,336		4.00	%

(1) Designation as "Well Capitalized" does not apply to bank holding companies - the Company. Such categorization of capital adequacy only applies to insured depository institutions - the Bank.

(2) The Capital Conservation Buffer implemented by the FDIC began to be phased in beginning January 1, 2016. It was not applicable to periods prior to that date and does not apply to bank holding companies - the Company.

On April 17, 2024, based on its supervisory profile, the Bank was notified by the OCC that it established individual minimum capital ratios (IMCR) for the Bank. Specifically, the Bank is required to maintain the following ratios: a common equity tier 1 capital ratio of 10.00%, a Tier 1 capital ratio of 10.00%, a Tier 1 leverage ratio of 9.00% and a total risk-based capital to risk-weighted assets of 11.50%.

As of June 30, 2024, the Bank did not meet all of its regulatory capital requirements. The common equity tier 1 capital was $87.5 million, or 10.20% of risk-weighted assets, exceeding the required level of 10.00%. The Tier 1 capital was $87.5 million, or 10.20% of risk-weighted assets, also above the required level of 10.00%. However, the Tier 1 leverage capital was $87.5 million, or 8.58% of average assets, falling short of the required 9.00%. The total risk-based capital was $96.2 million, or 11.21% of risk-weighted assets, below the required 11.50%. During the second quarter, the Bank significantly reduced its total and risk-based assets to work towards achieving the IMCR targets. This trend will continue into the remainder of 2024 with a goal of achieving exceeding the IMCR ratios by the end of 2024.

XML

Fair Value and Interest Rate Risk

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value and Interest Rate Risk

Fair Value and Interest Rate Risk

Patriot measures the carrying value of certain financial assets and liabilities at fair value, as required by its policies as a financial institution and by US GAAP. The carrying values of certain assets and liabilities are measured at fair value on a recurring basis, such as available-for-sale securities; while other assets and liabilities are measured at fair value on a non-recurring basis due to external factors requiring management’s judgment to estimate potential losses of value resulting in asset impairments or the establishment of valuation reserves. Measuring assets and liabilities at fair value may result in fluctuations to carrying value that have a significant impact on the results of operations or other comprehensive income for the period and period over period.

Following is a detailed summary of the guidance provided by US GAAP regarding the application of fair value measurements and Patriot’s application thereof. Additionally, the following information includes detailed summaries of the effects fair value measurements have on the carrying amounts of asset and liabilities presented in the Consolidated Financial Statements.

The objective of fair value measurement is to value an asset that may be sold or a liability that may be transferred at the estimated value which might be obtained in a transaction between unrelated parties under current market conditions. US GAAP establishes a framework for measuring assets and liabilities at fair value, as well as certain financial instruments classified in equity. The framework provides a fair value hierarchy, which prioritizes quoted prices in active markets for identical assets and liabilities and minimizes unobservable inputs, which are inputs for which market data are not available and that are developed by management using the best information available to develop assumptions about the value market participants might place on the asset to be sold or liability to be transferred.

The three levels of the fair value hierarchy consist of:

Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date (such as active exchange-traded equity securities and certain U.S. and government agency debt securities).

Level 2 - Observable inputs other than quoted prices included in Level 1, such as:

–Quoted prices for similar assets or liabilities in active markets (such as U.S. agency and government sponsored mortgage-backed securities)

–Quoted prices for identical or similar assets or liabilities in less active markets (such as certain U.S. and government agency debt securities, and corporate and municipal debt securities that trade infrequently)

–Other inputs that are observable for substantially the full term of the asset or liability (i.e. interest rates, yield curves, prepayment speeds, default rates, etc.).

Level 3 - Valuation techniques that require unobservable inputs that are supported by little or no market activity and are significant to the fair value measurement of the asset or liability (such as pricing and discounted cash flow models that typically reflect management’s estimates of the assumptions a market participant would use in pricing the asset or liability).

A description of the valuation methodologies used for assets and liabilities recorded at fair value, and for estimating fair value for financial and non-financial instruments not recorded at fair value, is set forth below.

Cash and due from banks, restricted cash, and accrued interest receivable and payable

The carrying amount is a reasonable estimate of fair value and accordingly these are classified as Level 1. These financial instruments are not recorded at fair value on a recurring basis.

Available-for-sale securities

The fair value of securities available for sale (carried at fair value) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities' relationship to other benchmark quoted prices, or using unobservable inputs employing various techniques and assumptions (Level 3).

Other Investments

The Bank’s investment portfolio includes the Solomon Hess SBA Loan Fund, which is utilized by the Bank to satisfy its Community Reinvestment Act (“CRA”) lending requirements. As this fund operates as a private fund, shares in the fund are not publicly traded but may be redeemed with 60 days’ notice at cost. For that reason, the carrying amount was considered comparable to fair value at both June 30, 2024 and December 31, 2023 due to its short-term nature.

Federal Reserve Bank Stock and Federal Home Loan Bank Stock

Shares in the FRB and FHLB are purchased and redeemed based upon their $100 par value. The stocks are non-marketable equity securities, and as such, are considered restricted securities that are carried at cost.

Loans

The fair value of loan portfolio is estimated by discounting the future cash flows using the rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We estimate the fair value of our loan portfolio using an exit price notion resulting in prior periods no longer being comparable. The exit price notion requires determination of the price at which willing market participants would transact at the measurement date under current market conditions depending on facts and circumstances, such as origination rates, credit risk, transaction costs, liquidity, national and regional market trends and other adjustments, utilizing publicly available rates and indices. The application of an exit price notion requires the use of significant judgment.

Loans Held for Sale

The fair value of loans held for sale is estimated by using a market approach that includes prices for loans sold awaiting settlement and other observable inputs. The Company has determined that the inputs used to value the loans held for sale fall within Level 2 of the fair value hierarchy.

SBA Servicing Asset

Servicing assets do not trade in an active, open market with readily observable prices. The Company estimates the fair value of servicing assets using discounted cash flow models incorporating numerous assumptions from the perspective of a market participant including market discount rates and prepayment speeds. Due to the significant unobservable input related to the servicing rights, the SBA servicing asset is classified within Level 3 of the valuation hierarchy.

Other Real Estate Owned

The fair value of OREO the Bank may obtain is based on current appraised property value less estimated costs to sell. When fair value is based on unadjusted current appraised value, OREO is classified within Level 2 of the fair value hierarchy. Patriot classifies OREO within Level 3 of the fair value hierarchy when unobservable inputs are used to determine adjustments to appraised values. Patriot does not record OREO at fair value on a recurring basis, but rather initially records OREO at fair value on a non-recurring basis and then monitors property and market conditions that may indicate a change in value is warranted.

Derivative asset (liability) - Interest Rate Swaps

The Company’s derivative assets and liabilities consist of transactions as part of management’s strategy to manage interest rate risk. The valuation of interest rate swap agreements does not contain any counterparty risk. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Company has determined that the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy. See Note 8 for additional disclosures on derivatives.

Deposits

The fair value of demand deposits, regular savings and certain money market deposits is the amount payable on demand at the reporting date.

The fair value of certificates of deposit and other time deposits is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities, estimated using local market data, to a schedule of aggregated expected maturities on such deposits. Patriot does not record deposits at fair value on a recurring basis.

Senior Notes, Subordinated Notes, and Junior Subordinated Debt and Note Payable

Patriot does not record senior notes at fair value on a recurring basis. The fair value of the senior notes was estimated by discounting future cash flows at rates at which similar notes would be made. The carrying value is considered comparable to fair value.

Patriot does not record subordinated notes at fair value on a recurring basis. The fair value of the subordinated notes was estimated by discounting future cash flows at rates at which similar notes would be made. The carrying value is considered comparable to fair value.

Patriot does not record junior subordinated debt at fair value on a recurring basis. Junior subordinated debt reprices quarterly, as a result, the carrying amount is considered a reasonable estimate of fair value.

The Company considers its own credit worthiness in determining the fair value of its senior notes, subordinated notes, notes payable and junior subordinated debt.

Federal Home Loan Bank Borrowings

The fair value of FHLB advances is estimated using a discounted cash flow calculation that applies current FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances. Patriot does not record FHLB advances at fair value on a recurring basis.

Off-balance sheet financial instruments

Off-balance sheet financial instruments are based on interest rate changes and fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Patriot does not record the off-balance-sheet financial instruments (i.e., commitments to extend credit) at fair value on a recurring basis.

The following table provides a comparison of the carrying amounts and estimated fair values of Patriot’s financial assets and liabilities as of June 30, 2024 and December 31, 2023:

(In thousands)		June 30, 2024				December 31, 2023
	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and noninterest bearing balances due from banks	Level 1	$	2,514	$	2,514	$	2,195	$	2,195
Interest-bearing deposits due from banks	Level 1	91,097		91,097		50,322		50,322
Restricted cash	Level 1	41		41		14,019		14,019
Available-for-sale securities	Level 2	76,302		76,302		78,925		78,925
Available-for-sale securities	Level 3	10,365		10,365		10,262		10,262
Other investments	Level 2	4,450		4,450		4,450		4,450
Federal Reserve Bank stock	Level 2	2,193		2,193		2,090		2,090
Federal Home Loan Bank stock	Level 2	3,571		3,571		4,202		4,202
Loans receivable, net	Level 3	761,313		735,140		832,934		812,856
Loans held for sale	Level 2	14,092		14,245		20,767		21,557
SBA servicing assets	Level 3	790		873		857		932
Other real estate owned	Level 2	2,843		2,843		2,843		2,843
Accrued interest receivable	Level 2	6,452		6,452		7,219		7,219
Interest rate swap receivable	Level 2	95		95		74		74
Financial assets, total		$	976,118	$	950,181	$	1,031,159	$	1,011,946
Financial Liabilities:
Demand deposits	Level 2	$	93,736	$	93,736	$	110,056	$	110,056
Negotiable order of withdrawal accounts	Level 2	26,354		26,354		33,035		33,035
Savings deposits	Level 2	39,456		39,456		44,104		44,104
Interest bearing DDA	Level 2	227,253		227,253		171,577		171,577
Money market deposits	Level 2	167,836		167,836		200,280		200,280
Time deposits	Level 2	225,065		221,396		240,733		239,655
Brokered deposits	Level 1	21,202		21,157		40,526		40,453
FHLB, FRB and correspondent bank borrowings	Level 2	156,900		156,693		171,000		170,171
Senior notes	Level 2	11,792		11,425		11,723		11,397
Subordinated debt	Level 2	9,883		9,792		9,869		10,102
Junior subordinated debt owed to unconsolidated trust	Level 2	8,142		8,142		8,137		8,137
Note payable	Level 3	270		265		376		362
Accrued interest payable	Level 2	3,105		3,105		1,235		1,235
Interest rate swap liability	Level 2	95		95		74		74
Financial liabilities, total		$	991,089	$	986,705	$	1,042,725	$	1,040,638

The carrying amount of cash and noninterest bearing balances due from banks, restricted cash, interest-bearing deposits due from banks, and demand deposits approximates fair value, due to the short-term nature and high turnover of these balances. These amounts are included in the table above for informational purposes.

In the normal course of its operations, Patriot assumes interest rate risk (i.e., the risk that general interest rate levels will fluctuate). As a result, the fair value of Patriot’s financial assets and liabilities are affected when interest market rates change, which change may be either favorable or unfavorable. Management attempts to mitigate interest rate risk by matching the maturities of its financial assets and liabilities. However, borrowers with fixed rate obligations are less likely to prepay their obligations in a rising interest rate environment and more likely to prepay their obligations in a falling interest rate environment. Conversely, depositors receiving fixed rates are more likely to withdraw funds before maturity in a rising interest rate environment and less likely to do so in a falling interest rate environment. Management monitors market rates of interest and the maturities of its financial assets and financial liabilities, adjusting the terms of new loans and deposits in an attempt to minimize interest rate risk. Additionally, management mitigates its overall interest rate risk through its available funds investment strategy.

The following tables detail the financial assets measured at fair value on a recurring basis and the valuation techniques utilized relative to the fair value hierarchy, as of June 30, 2024 and December 31, 2023:

(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	—	$	64,287	$	—	$	64,287
Corporate bonds	—		3,518		10,365		13,883
Subordinated notes	—		4,327		—		4,327
SBA loan pools	—		3,703		—		3,703
Municipal bonds	—		467		—		467
Available-for-sale securities	$	—	$	76,302	$	10,365	$	86,667
Interest rate swap receivable	$	—	$	95	$	—	$	95
Interest rate swap liability	$	—	$	95	$	—	$	95
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	—	$	65,671	$	—	$	65,671
Corporate bonds	—		3,504		10,262		13,766
Subordinated notes	—		4,227		—		4,227
SBA loan pools	—		5,037		—		5,037
Municipal bonds	—		486		—		486
Available-for-sale securities	$	—	$	78,925	$	10,262	$	89,187
Interest rate swap receivable	$	—	$	74	$	—	$	74
Interest rate swap liability	$	—	$	74	$	—	$	74

Patriot measures certain financial assets and financial liabilities at fair value on a non-recurring basis. When circumstances dictate (e.g., impairment of long-lived assets, other than temporary impairment of collateral value), the carrying values of such financial assets and financial liabilities are adjusted to fair value or fair value less costs to sell, as may be appropriate.

As of June 30, 2024 and December 31, 2023, four corporate bonds were classified as Level 3 instruments. The fair values of these securities were determined using a present value approach. The discount rate assumed was determined based on unobservable inputs in a pricing model. During the three and six months ended June 30, 2024 and 2023, the Company had no transfers into or out of Levels 1, 2 or 3.

The reconciliation of the beginning and ending balances during the three and six months ended June 30, 2024 and 2023 for Level 3 available-for-sale securities is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Level 3 fair value, beginning of period	$	10,189	$	10,205	$	10,262	$	9,427
Purchases	—		—		—		—
Realized gain (loss)	—		—		—		—
Unrealized (loss) gain	176		(323)		103		455
Transfers in and /or out of Level 3	—		—		—		—
Level 3 fair value, end of period	$	10,365	$	9,882	$	10,365	$	9,882

The table below presents the valuation methodology and unobservable inputs for level 3 assets measured at fair value on a non-recurring basis as of June 30, 2024 and December 31, 2023:

(In thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
June 30, 2024:
Individually evaluated loans, net	$	30,173	Real Estate Appraisals	Discount for appraisal type	5.8	%	-	20%
SBA servicing assets	873		Discounted Cash Flows	Market discount rates	14.73	%	-	14.90%
December 31, 2023:
Impaired loans, net	$	12,928	Real Estate Appraisals	Discount for appraisal type	5.8	%	-	20%
SBA servicing assets	932		Discounted Cash Flows	Market discount rates	14.73	%	-	14.90%

Patriot discloses fair value information about financial instruments, whether or not recognized in the consolidated balance sheet, for which it is practicable to estimate that value. Certain financial instruments are excluded from disclosure requirements and, accordingly, the aggregate fair value amounts presented do not necessarily represent the complete underlying value of financial instruments included in the consolidated financial statements.

The estimated fair value amounts have been measured as of June 30, 2024 and December 31, 2023, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of the financial instruments measured may be different than if they had been subsequently valued.

The information presented should not be interpreted as an estimate of the total fair value of Patriot’s assets and liabilities, since only a portion of Patriot’s assets and liabilities are required to be measured at fair value for financial reporting purposes. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between Patriot’s fair value disclosures and those of other bank holding companies may not be meaningful.

XML

Subsequent Events

6 Months Ended

Jun. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has evaluated all events or transactions that occurred through the date the Company issued these financial statements. During this period, the Company did not have any material recognizable or non-recognizable subsequent events.

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Recently issued Accounting Pronouncements not yet Adopted

ASU 2023-06

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in this Update modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years later. The amendments in this Update should be applied prospectively. For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The adoption of ASU 2023-06 is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures. The Company will continue to monitor for SEC action, and plan accordingly for adoption.

ASU 2023-07

In November, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Additionally, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and define other disclosure requirements. A public entity must apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this standard is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures.

ASU 2023-09

In December 2023, the FASB issued ASU 2023‑09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires more detailed disclosures of income taxes paid net of refunds received, income from continuing operations before income tax expense or benefit, and income tax expense from continuing operations. This standard is to be applied on a prospective basis, with retrospective application permitted, and will be effective for the Company for annual periods beginning on January 1, 2025. We do not expect adoption of this standard to have a material impact on the Company’s Consolidated Financial Statements but will likely result in additional disclosures.

XML

Available-for-Sale Securities (Tables)

6 Months Ended

Jun. 30, 2024

Investments [Abstract]

Schedule of Available-for-sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale securities at June 30, 2024 and December 31, 2023 are as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	79,854	$	—	$	(15,567)	$	64,287
Corporate bonds	17,996		—		(4,113)		13,883
Subordinated notes	5,000		—		(673)		4,327
SBA loan pools	4,733		—		(1,030)		3,703
Municipal bonds	558		—		(91)		467
Total available-for-sale securities	$	108,141	$	—	$	(21,474)	$	86,667
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	80,500	$	—	$	(14,829)	$	65,671
Corporate bonds	17,995		—		(4,229)		13,766
Subordinated notes	5,000		—		(773)		4,227
SBA loan pools	6,002		—		(965)		5,037
Municipal bonds	559		—		(73)		486
Total available-for-sale securities	$	110,056	$	—	$	(20,869)	$	89,187

Schedule of Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value

The following table presents the available-for-sale securities’ gross unrealized losses and fair value, aggregated by the length of time the individual securities have been in a continuous loss position as of June 30, 2024 and December 31, 2023:

(In thousands)	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)		Fair Value		Unrealized (Loss)
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	4,236	$	(132)	$	60,051	$	(15,435)	$	64,287	$	(15,567)
Corporate bonds	—		—		13,883		(4,113)		13,883		(4,113)
Subordinated notes	—		—		4,327		(673)		4,327		(673)
SBA loan pools	—		—		3,703		(1,030)		3,703		(1,030)
Municipal bonds	—		—		467		(91)		467		(91)
Total available-for-sale securities	$	4,236	$	(132)	$	82,431	$	(21,342)	$	86,667	$	(21,474)
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	9,984	$	(286)	$	55,687	$	(14,543)	$	65,671	$	(14,829)
Corporate bonds	—		—		13,766		(4,229)		13,766		(4,229)
Subordinated notes	—		—		4,227		(773)		4,227		(773)
SBA loan pools	—		—		5,037		(965)		5,037		(965)
Municipal bonds	—		—		486		(73)		486		(73)
Total available-for-sale securities	$	9,984	$	(286)	$	79,203	$	(20,583)	$	89,187	$	(20,869)

Schedule of Investments Classified by Contractual Maturity Date

The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of June 30, 2024 and December 31, 2023. The mortgages underlying the mortgage-backed securities are not due at a single maturity date. Additionally, these mortgages often are and generally may be pre-paid without penalty, creating a degree of uncertainty that such investments can be held until maturity. For convenience, mortgage-backed securities have been included in the summary as a separate line item.

(In thousands)	Amortized Cost								Fair Value
	Due Within 5 years		Due After 5 years through 10 years		Due After 10 years		Total		Due Within 5 years		Due After 5 years through 10 years		Due After 10 years		Total
June 30, 2024:
Corporate bonds	$	2,000	$	15,996	$	—	$	17,996	$	1,957	$	11,926	$	—	$	13,883
Subordinated notes	3,000		2,000		—		5,000		2,550		1,777		—		4,327
SBA loan pools	—		—		4,733		4,733		—		—		3,703		3,703
Municipal bonds	153		405		—		558		136		331		—		467
Available-for-sale securities with stated maturity dates	5,153		18,401		4,733		28,287		4,643		14,034		3,703		22,380
U. S. Government agency and mortgage-backed securities	—		5,184		74,670		79,854		—		4,109		60,178		64,287
Total available-for-sale securities	$	5,153	$	23,585	$	79,403	$	108,141	$	4,643	$	18,143	$	63,881	$	86,667
December 31, 2023:
Corporate bonds	$	2,000	$	15,995	$	—	$	17,995	$	1,947	$	11,819	$	—	$	13,766
Subordinated notes	3,000		2,000		—		5,000		2,527		1,700		—		4,227
SBA loan pools	—		1,096		4,906		6,002		—		1,084		3,953		5,037
Municipal bonds	153		406		—		559		140		346		—		486
Available-for-sale securities with stated maturity dates	5,153		19,497		4,906		29,556		4,614		14,949		3,953		23,516
U. S. Government agency and mortgage-backed securities	—		5,222		75,278		80,500		—		4,237		61,434		65,671
Total available-for-sale securities	$	5,153	$	24,719	$	80,184	$	110,056	$	4,614	$	19,186	$	65,387	$	89,187

XML

Loans Receivable and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2024

Credit Loss [Abstract]

Schedule of Loans Receivable

As of June 30, 2024 and December 31, 2023, loans receivable, net, consisted of the following:

(In thousands)	June 30, 2024		December 31, 2023
Loan portfolio segment:
Commercial Real Estate	$	458,556	$	472,093
Residential Real Estate	99,419		106,783
Commercial and Industrial	134,744		163,565
Consumer and Other	77,397		99,688
Construction	3,829		4,266
Construction to Permanent - CRE	2,357		2,464
Loans receivable, gross	776,302		848,859
Allowance for credit losses	(14,989)		(15,925)
Loans receivable, net	$	761,313	$	832,934

Schedule of Allowance for Credit Loss

The following tables summarize the activity in the allowance for credit losses, allocated to segments of the loan portfolio, for the three and six months ended June 30, 2024 and 2023:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
Three Months Ended June 30, 2024
Allowance for credit losses:
March 31, 2024	$	5,620	$	671	$	1,199	$	6,280	$	7	$	—	$	—	$	13,777
Charge-offs	—		—		(404)		(1,849)		—		—		—		(2,253)
Recoveries	—		—		72		260		—		—		—		332
Provisions (credits)	2,338		7		348		442		(2)		—		—		3,133		(1)
June 30, 2024	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	—	$	14,989
Three Months Ended June 30, 2023
Allowance for credit losses:
March 31, 2023	$	9,809	$	853	$	1,799	$	12,251	$	21	$	47	$	—	$	24,780
Charge-offs	—		—		(4)		(2,516)		(150)		—		—		(2,670)
Recoveries	—		11		9		260		—		—		—		280
Provisions (credits)	230		163		(131)		1,280		162		4		—		1,708		(2)
June 30, 2023	$	10,039	$	1,027	$	1,673	$	11,275	$	33	$	51	$	—	$	24,098

(1) The provision on credit losses included in the above table for the three months ended June 30, 2024 does not include the credit on unfunded loan commitments of $41,000.

(2) The provision on credit losses included in the above table for the three months ended June 30, 2023 does not include the credit on unfunded loan commitments of $383,000.

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
Six Months Ended June 30, 2024
Allowance for credit losses:
December 31, 2023	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	—	$	15,925
Impact of ASC 326 Adoption	—		—		—		—		—		—		—		—
Charge-offs	(158)		(21)		(814)		(4,372)		—		—		—		(5,365)
Recoveries	—		—		78		565		—		—		—		643
Provisions (credits)	2,027		92		682		1,097		1		(113)		—		3,786		(3)
June 30, 2024	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	—	$	14,989
Six Months Ended June 30, 2023
Allowance for credit losses:
December 31, 2022	$	6,966	$	665	$	1,403	$	1,207	$	24	$	10	$	35	$	10,310
Charge-offs	—		—		(6)		(4,312)		(150)		—		—		(4,468)
Recoveries	—		11		16		433		—		—		—		460
Provisions (credits)	1,447		162		41		2,970		163		12		—		4,795		(4)
June 30, 2023	$	10,039	$	1,027	$	1,673	$	11,275	$	33	$	51	$	—	$	24,098

(3) The provision on credit losses for the six months ended June 30, 2024 does not include the credit on unfunded loan commitments of $36,000.

(4) The provision on credit losses for the six months ended June 30, 2023 does not include the credit on unfunded loan commitments of $1.3 million.

Schedule of Individually Evaluated for Impairment

The following tables summarize, by loan portfolio segment, the amount of loans receivable evaluated individually and collectively for impairment as of June 30, 2024:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to  Permanent  - CRE		Total
June 30, 2024
Allowance for credit losses:
Individually evaluated loans	$	5,717	$	—	$	—	$	—	$	—	$	—	$	5,717
Collectively evaluated loans	2,241		678		1,215		5,133		5		—		9,272
Total allowance for credit losses	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	14,989
Loans receivable, gross:
Individually evaluated loans	$	27,675	$	172	$	5,686	$	—	$	—	$	2,357	$	35,890
Collectively evaluated loans	430,881		99,247		129,058		77,397		3,829		—		740,412
Total loans receivable, gross	$	458,556	$	99,419	$	134,744	$	77,397	$	3,829	$	2,357	$	776,302

The following tables presents the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment based on impairment method as of December 31, 2023:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Total
December 31, 2023
Allowance for credit losses:
Individually evaluated for impairment	$	3,813	$	—	$	392	$	—	$	—	$	—	$	4,205
Collectively evaluated for impairment	2,276		607		877		7,843		4		113		11,720
Total allowance for credit losses	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	15,925
Loans receivable, gross:
Individually evaluated for impairment	$	12,775	$	—	$	3,904	$	—	$	454	$	—	$	17,133
Collectively evaluated for impairment	459,318		106,783		159,661		99,688		3,812		2,464		831,726
Total loans receivable, gross	$	472,093	$	106,783	$	163,565	$	99,688	$	4,266	$	2,464	$	848,859

Schedule of Financing Receivable Credit Quality Indicators

The following tables summarize loan amortized cost by vintage, credit quality indicator, class of loans and charge-offs based on year of origination as of June 30, 2024:

	Term of Loans by Origination
As of June 30, 2024:	2024		2023		2022		2021		2020		Prior		Revolving		Total Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	107,117	$	139,305	$	96,020	$	3,354	$	76,706	$	—	$	422,502
Special mention	—		—		6,461		901		—		445		—		7,807
Substandard	—		—		3,002		13,276		279		11,690		—		28,247
Total	—		107,117		148,768		110,197		3,633		88,841		—		458,556
Current period gross charge-offs	—		—		—		—		—		158		—		158
Residential Real Estate:
Pass	—		—		1,235		2,851		10,344		81,518		700		96,648
Special mention	—		—		—		—		1,053		1,416		—		2,469
Substandard	—		—		—		—		—		302		—		302
Total	—		—		1,235		2,851		11,397		83,236		700		99,419
Current period gross charge-offs	—		—		—		—		—		21		—		21
Commercial and Industrial:
Pass	678		1,591		14,917		21,394		1,064		8,215		77,076		124,935
Special mention	—		5		19		40		—		968		—		1,032
Substandard	—		268		622		844		5,725		1,214		104		8,777
Total	678		1,864		15,558		22,278		6,789		10,397		77,180		134,744
Current period gross charge-offs	—		—		—		—		—		814		—		814
Consumer and Other:
Pass	25		4,053		24,814		2,986		—		18,170		26,084		76,132
Substandard	—		112		386		23		—		429		315		1,265
Total	25		4,165		25,200		3,009		—		18,599		26,399		77,397
Current period gross charge-offs	—		185		3,812		375		—		—		—		4,372
Construction:
Pass	—		—		—		3,829		—		—		—		3,829
Total	—		—		—		3,829		—		—		—		3,829
Construction to Permanent - CRE:
Substandard	—		—		—		2,357		—		—		—		2,357
Total	—		—		—		2,357		—		—		—		2,357
Total loans	$	703	$	113,146	$	190,761	$	144,521	$	21,819	$	201,073	$	104,279	$	776,302
Total Current period gross charge-offs	$	—	$	185	$	3,812	$	375	$	—	$	993	$	—	$	5,365
Loans receivable, gross:
Pass	$	703	$	112,761	$	180,271	$	127,080	$	14,762	$	184,609	$	103,860	$	724,046
Special mention	—		5		6,480		941		1,053		2,829		—		11,308
Substandard	—		380		4,010		16,500		6,004		13,635		419		40,948
Total Loans receivable, gross	$	703	$	113,146	$	190,761	$	144,521	$	21,819	$	201,073	$	104,279	$	776,302
Current period gross charge-offs	$	—	$	185	$	3,812	$	375	$	—	$	993	$	—	$	5,365

The following tables summarize loan amortized cost by vintage, credit quality indicator, class of loans and charge-offs based on year of origination as of December 31, 2023:

	Term of Loans by Origination
As of December 31, 2023:	2023		2022		2021		2020		2019		Prior		Revolving		Total Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	104,683	$	138,091	$	111,308	$	3,401	$	31,832	$	63,526	$	—	$	452,841
Special mention	—		6,482		—		—		—		—		—		6,482
Substandard	—		1,799		—		280		10,000		691		—		12,770
Total	104,683		146,372		111,308		3,681		41,832		64,217		—		472,093
Current period gross charge-offs	—		—		—		—		6,341		5		—		6,346
Residential Real Estate:
Pass	—		1,251		2,975		11,577		15,770		74,596		614		106,783
Total	—		1,251		2,975		11,577		15,770		74,596		614		106,783
Current period gross charge-offs	—		—		—		—		—		515		—		515
Commercial and Industrial:
Pass	2,696		13,916		23,099		8,004		9,578		7,024		96,431		160,748
Special mention	6		348		—		—		37		11		104		506
Substandard	16		—		801		—		401		1,093		—		2,311
Total	2,718		14,264		23,900		8,004		10,016		8,128		96,535		163,565
Current period gross charge-offs	—		182		85		—		516		144		—		927
Consumer and Other:
Pass	6,470		36,668		4,724		—		5,590		14,314		30,945		98,711
Substandard	197		645		61		—		—		—		74		977
Total	6,667		37,313		4,785		—		5,590		14,314		31,019		99,688
Current period gross charge-offs	114		9,013		1,280		—		6		66		—		10,479
Construction:
Pass	—		—		3,812		—		—		—		—		3,812
Substandard	—		—		—		—		454		—		—		454
Total	—		—		3,812		—		454		—		—		4,266
Current period gross charge-offs	—		—		150		—		—		—		—		150
Construction to Permanent - CRE:
Special mention	—		—		2,464		—		—		—		—		2,464
Total	—		—		2,464		—		—		—		—		2,464
Total loans	$	114,068	$	199,200	$	149,244	$	23,262	$	73,662	$	161,255	$	128,168	$	848,859
Total Current period gross charge-offs	$	114	$	9,195	$	1,515	$	—	$	6,863	$	730	$	—	$	18,417
Loans receivable, gross:
Pass	$	113,849	$	189,926	$	145,918	$	22,982	$	62,770	$	159,460	$	127,990	$	822,895
Special mention	6		6,830		2,464		—		37		11		104		9,452
Substandard	213		2,444		862		280		10,855		1,784		74		16,512
Loans receivable, gross	$	114,068	$	199,200	$	149,244	$	23,262	$	73,662	$	161,255	$	128,168	$	848,859
Total Current period gross charge-offs	$	114	$	9,195	$	1,515	$	—	$	6,863	$	730	$	—	$	18,417

Schedule of Financing Receivable, Past Due

The following tables summarize performing and non-performing (i.e., non-accruing) loans receivable by portfolio segment, by aging category, by delinquency status as of June 30, 2024.

(In thousands)	Performing (Accruing) Loans
As of June 30, 2024:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	7,540	$	6,748	$	—	$	14,288	$	404,989	$	419,277	$	3,225	$	422,502
Special mention	901		—		—		901		6,906		7,807		—		7,807
Substandard	589		—		1,178		1,767		2,029		3,796		24,451		28,247
	9,030		6,748		1,178		16,956		413,924		430,880		27,676		458,556
Residential Real Estate:
Pass	177		33		—		210		96,438		96,648		—		96,648
Special mention	—		—		—		—		2,469		2,469		—		2,469
Substandard	—		—		—		—		—		—		302		302
	177		33		—		210		98,907		99,117		302		99,419
Commercial and Industrial:
Pass	1,112		—		—		1,112		119,856		120,968		3,967		124,935
Special mention	—		—		—		—		1,032		1,032		—		1,032
Substandard	481		514		—		995		5,978		6,973		1,804		8,777
	1,593		514		—		2,107		126,866		128,973		5,771		134,744
Consumer and Other:
Pass	1,002		423		—		1,425		74,707		76,132		—		76,132
Substandard	—		—		—		—		—		—		1,265		1,265
	1,002		423		—		1,425		74,707		76,132		1,265		77,397
Construction:
Pass	—		—		—		—		3,829		3,829		—		3,829
Substandard	—		—		—		—		—		—		—		—
	—		—		—		—		3,829		3,829		—		3,829
Construction to Permanent - CRE:
Substandard	—		—		—		—		—		—		2,357		2,357
	—		—		—		—		—		—		2,357		2,357
Total	$	11,802	$	7,718	$	1,178	$	20,698	$	718,233	$	738,931	$	37,371	$	776,302
Loans receivable, gross:
Pass	$	9,831	$	7,204	$	—	$	17,035	$	699,819	$	716,854	$	7,192	$	724,046
Special mention	901		—		—		901		10,407		11,308		—		11,308
Substandard	1,070		514		1,178		2,762		8,007		10,769		30,179		40,948
Loans receivable, gross	$	11,802	$	7,718	$	1,178	$	20,698	$	718,233	$	738,931	$	37,371	$	776,302

The following tables summarize performing and non-performing loans (i.e., non-accruing) receivable by portfolio segment, by aging category, by delinquency status as of December 31, 2023.

(In thousands)	Performing (Accruing) Loans
As of December 31, 2023:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	2,274	$	231	$	—	$	2,505	$	448,707	$	451,212	$	1,629	$	452,841
Special mention	—		—		—		—		6,482		6,482		—		6,482
Substandard	—		—		—		—		1,624		1,624		11,146		12,770
	2,274		231		—		2,505		456,813		459,318		12,775		472,093
Residential Real Estate:
Pass	1,439		—		—		1,439		105,344		106,783		—		106,783
	1,439		—		—		1,439		105,344		106,783		—		106,783
Commercial and Industrial:
Pass	420		10		—		430		157,335		157,765		2,983		160,748
Special mention	—		348		—		348		158		506		—		506
Substandard	526		—		—		526		847		1,373		938		2,311
	946		358		—		1,304		158,340		159,644		3,921		163,565
Consumer and Other:
Pass	1,327		1,015		341		2,683		96,028		98,711		—		98,711
Substandard	—		—		—		—		—		—		977		977
	1,327		1,015		341		2,683		96,028		98,711		977		99,688
Construction:
Pass	—		—		—		—		3,812		3,812		—		3,812
Substandard	—		—		—		—		—		—		454		454
	—		—		—		—		3,812		3,812		454		4,266
Construction to Permanent - CRE:
Special mention	—		—		—		—		2,464		2,464		—		2,464
	—		—		—		—		2,464		2,464		—		2,464
Total	$	5,986	$	1,604	$	341	$	7,931	$	822,801	$	830,732	$	18,127	$	848,859
Loans receivable, gross:
Pass	$	5,460	$	1,256	$	341	$	7,057	$	811,226	$	818,283	$	4,612	$	822,895
Special mention	—		348		—		348		9,104		9,452		—		9,452
Substandard	526		—		—		526		2,471		2,997		13,515		16,512
Loans receivable, gross	$	5,986	$	1,604	$	341	$	7,931	$	822,801	$	830,732	$	18,127	$	848,859

Schedule of Financing Receivable, Nonaccrual

The following tables summarize non-performing (i.e., non-accruing) loans by aging category and status, within the applicable loan portfolio segment as of June 30, 2024 and December 31, 2023:

(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of June 30, 2024:
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	1,653	$	1,572	$	3,225	$	—	$	3,225
Substandard	—		581		1,306		1,887		22,564		24,451
Residential Real Estate:
Substandard	—		—		302		302		—		302
Commercial and Industrial:
Pass	—		2,568		906		3,474		493		3,967
Substandard	—		273		1,253		1,526		278		1,804
Consumer and Other:
Substandard	—		—		1,202		1,202		63		1,265
Construction to permanent - CRE:
Substandard	2,357		—		—		2,357		—		2,357
Total non-accruing loans	$	2,357	$	5,075	$	6,541	$	13,973	$	23,398	$	37,371
As of December 31, 2023:
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	—	$	1,629	$	1,629	$	—	$	1,629
Substandard	—		770		439		1,209		9,937		11,146
Commercial and Industrial:
Pass	—		—		2,054		2,054		929		2,983
Substandard	—		371		535		906		32		938
Consumer and Other:
Substandard	—		16		887		903		74		977
Construction:
Substandard	—		—		—		—		454		454
Total non-accruing loans	$	—	$	1,157	$	5,544	$	6,701	$	11,426	$	18,127

Schedule of Impaired Financing Receivables

The following table reflects information about the individually evaluated loans by class as of June 30, 2024 and December 31, 2023:

(In thousands)	June 30, 2024						December 31, 2023
	Recorded Investment		Principal Outstanding		Related Allowance		Recorded Investment		Principal Outstanding		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	5,111	$	8,111	$	—	$	2,838	$	5,879	$	—
Residential Real Estate	172		171		—		—		—		—
Commercial and Industrial	5,685		10,611		—		2,266		2,899		—
Construction	—		—		—		454		461		—
Construction to permanent - CRE	2,357		2,476		—		—		—		—
	13,325		21,369		—		5,558		9,239		—
With a related allowance recorded:
Commercial Real Estate	22,564		23,197		5,717		9,937		10,137		3,813
Commercial and Industrial	1		1,388		—		1,638		3,159		392
	22,565		24,585		5,717		11,575		13,296		4,205
Individually evaluated loans, Total:
Commercial Real Estate	27,675		31,308		5,717		12,775		16,016		3,813
Residential Real Estate	172		171		—		—		—		—
Commercial and Industrial	5,686		11,999		—		3,904		6,058		392
Construction	—		—		—		454		461		—
Construction to permanent - CRE	2,357		2,476		—		—		—		—
Total	$	35,890	$	45,954	$	5,717	$	17,133	$	22,535	$	4,205

The following table summarizes additional information regarding individually evaluated loans by class for the three and six months ended June 30, 2024 and 2023.

	Three Month Ended June 30,								Six Months Ended June 30,
(In thousands)	2024				2023				2024				2023
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	5,107	$	—	$	387	$	—	$	5,108	$	—	$	680	$	—
Residential Real Estate	172		8		748		24		172		8		992		27
Commercial and Industrial	5,026		23		2,046		68		4,513		27		2,181		150
Consumer and Other	—		—		128		—		—		—		293		—
Construction	—		—		579		—		—		—		993		—
Construction to permanent - CRE	2,411		—		—		—		2,433		—		—		—
	12,716		31		3,888		92		12,226		35		5,139		177
With a related allowance recorded:
Commercial Real Estate	22,763		159		10,405		—		22,942		159		10,651		154
Residential Real Estate	—		—		1,352		—		—		—		1,468		—
Commercial and Industrial	217		—		4,052		98		577		—		4,341		139
Consumer and Other	—		—		18		—		—		—		10		—
	22,980		159		15,827		98		23,519		159		16,470		293
Individually evaluated loans, Total:
Commercial Real Estate	27,870		159		10,792		—		28,050		159		11,331		154
Residential Real Estate	172		8		2,100		24		172		8		2,460		27
Commercial and Industrial	5,243		23		6,098		166		5,090		27		6,522		289
Consumer and Other	—		—		146		—		—		—		303		—
Construction	—		—		579		—		—		—		993		—
Construction to permanent - CRE	2,411		—		—		—		2,433		—		—		—
Total	$	35,696	$	190	$	19,715	$	190	$	35,745	$	194	$	21,609	$	470

XML

Loans Held for Sale (Tables)

6 Months Ended

Jun. 30, 2024

Receivables [Abstract]

Schedule of Servicing Asset at Amortized Cost

The following table presents an analysis of the activity in the SBA servicing assets for the three and six months ended June 30, 2024 and 2023:

(In thousands)	Three Month Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning balance	$	902	$	893	$	857	$	886
Servicing rights capitalized	9		24		73		58
Servicing rights amortized	(15)		(11)		(34)		(22)
Servicing rights disposed	(106)		(24)		(106)		(40)
Ending balance	$	790	$	882	$	790	$	882

XML

Deposits (Tables)

6 Months Ended

Jun. 30, 2024

Deposits [Abstract]

Schedule of Deposit Liabilities, Type

The following table presents the balance of deposits held, by category as of June 30, 2024 and December 31, 2023.

(In thousands)	June 30, 2024		December 31, 2023
Non-interest bearing	$	93,736	$	110,056
Interest bearing:
Negotiable order of withdrawal accounts	26,354		33,035
Savings deposits	39,456		44,104
Interest bearing DDA	227,253		171,577
Money market	167,836		200,280
Certificates of deposit, $250,000 or less	162,361		175,988
Certificates of deposit, more than $250,000	62,704		64,745
Brokered deposits	21,202		40,526
Interest bearing, Total	707,166		730,255
Total Deposits	$	800,902	$	840,311

Schedule of Contractual Obligation, Fiscal Year Maturity

As of June 30, 2024, contractual maturities of Certificates of Deposit (“CDs”), and brokered deposits is summarized as follows:

(In thousands)	Certificates of Deposit $250,000 or less		Certificates of Deposit more than $250,000		Brokered Deposits		Total
1 year or less	$	141,847	$	50,467	$	14,529	$	206,843
More than 1 year through 2 years	17,207		9,335		251		26,793
More than 2 years through 3 years	3,056		2,902		6,422		12,380
More than 3 years through 4 years	70		—		—		70
More than 4 years through 5 years	181		—		—		181
	$	162,361	$	62,704	$	21,202	$	246,267

XML

Derivatives (Tables)

6 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):

(In thousands)	Notional Amount	Maturity (Years)	Fixed Rate		Variable Rate	Fair Value
June 30, 2024
Classified in Other Assets:
3rd party interest rate swap	1,309	5.00	4.38	%	1 Mo. SOFR + 2.00%	95
Classified in Other Liabilities:
Customer interest rate swap	1,309	5.00	4.38	%	1 Mo. SOFR + 2.00%	(95)
December 31, 2023
Classified in Other Assets:
3rd party interest rate swap	1,327	5.50	4.38	%	1 Mo. SOFR + 2.00%	74
Classified in Other Liabilities:
Customer interest rate swap	1,327	5.50	4.38	%	1 Mo. SOFR + 2.00%	(74)

XML

Share-based Compensation and Employee Benefit Plan (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Nonvested Restricted Stock Units Activity

The following is a summary of the status of the Company’s restricted shares and changes for the three and six months ended June 30, 2024 and 2023:

Three months ended June 30, 2024:	Number of Shares Awarded	Weighted Average Grant Date Fair Value
Unvested at March 31, 2024	27,665	$5.24
Granted	81,174	$3.79
Unvested at June 30, 2024	108,839	$4.16
Six months ended June 30, 2024:
Unvested at December 31, 2023	17,506	$6.09
Granted	91,333	$3.79
Unvested at June 30, 2024	108,839	$4.16

Three months ended June 30, 2023	Number of Shares Awarded	Weighted Average Grant Date Fair Value
Unvested at March 31, 2023	22,660	$7.11
Unvested at June 30, 2023	22,660	$7.11
Six months ended June 30, 2023:
Unvested at December 31, 2022	22,660	$7.11
Unvested at June 30, 2023	22,660	$7.11

XML

Earnings per share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Loss Per Share, Basic and Diluted

The following table summarizes the computation of basic and diluted loss per share for the three and six months ended June 30, 2024 and 2023:

(Net loss in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Basis loss per share:
Net loss attributable to Common shareholders	$	(3,081)		$	(615)		$	(3,380)		$	(1,314)
Divided by:
Weighted average shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Basic loss per share of common stock	$	(0.77)		$	(0.16)		$	(0.85)		$	(0.33)
Diluted loss per share:
Net loss attributable to Common shareholders	$	(3,081)		$	(615)		$	(3,380)		$	(1,314)
Weighted average shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Effect of potentially dilutive restricted shares of common stock	—		(1)	—		(2)	—		(3)	—		(4)
Divided by:
Weighted average diluted shares outstanding	3,976,073			3,965,186			3,976,073			3,965,186
Diluted loss per share of common stock	$	(0.77)		$	(0.16)		$	(0.85)		$	(0.33)

(1)	The weighted average diluted shares outstanding does not include 8,695 anti-dilutive restricted shares of common stock for the three months ended June 30, 2024.
(2)	The weighted average diluted shares outstanding does not include 1,528 anti-dilutive restricted shares of common stock for the three months ended June 30, 2023.
(3)	The weighted average diluted shares outstanding does not include 4,330 anti-dilutive restricted shares of common stock for the six months ended June 30, 2024.
(4)	The weighted average diluted shares outstanding does not include 427 anti-dilutive restricted shares of common stock for the six months ended June 30, 2023.

XML

Financial Instruments With Off-balance Sheet Risk (Tables)

6 Months Ended

Jun. 30, 2024

Risks and Uncertainties [Abstract]

Schedule of Commitment to Extended Credit

Financial instruments with credit risk at June 30, 2024 and December 31, 2023 are as follows:

(In thousands)	June 30, 2024		December 31, 2023
Commitments to extend credit:
Unused lines of credit	$	77,242	$	63,435
Undisbursed construction loans	861		2,607
Home equity lines of credit	25,806		26,488
	$	103,909	$	92,530

XML

Regulatory and Operational Matters (Tables)

6 Months Ended

Jun. 30, 2024

Regulatory Capital Requirements under Banking Regulations [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

The Company and Bank’s regulatory capital amounts and ratios at June 30, 2024 and December 31, 2023 are summarized as follows:

		June 30, 2024								December 31, 2023
		Patriot National Bancorp, Inc.				Patriot Bank, N.A.				Patriot National Bancorp, Inc.				Patriot Bank, N.A.
(Dollar amounts in thousands)		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to risk weighted assets):
Actual		$	84,432	9.84	%	$	96,204	11.21	%	$	89,727	10.00	%	$	100,683	11.22	%
To be Well Capitalized	(1)	—		—		85,784		10.00	%	—		—		89,732		10.00	%
For capital adequacy with Capital Buffer	(2)	—		—		90,073		10.50	%	—		—		94,218		10.50	%
For capital adequacy		68,647		8.00	%	68,627		8.00	%	71,788		8.00	%	71,785		8.00	%
Tier 1 Capital (to risk weighted assets):
Actual		65,705		7.66	%	87,477		10.20	%	73,282		8.17	%	94,238		10.50	%
To be Well Capitalized	(1)	—		—		68,627		8.00	%	—		—		71,785		8.00	%
For capital adequacy with Capital Buffer	(2)	—		—		72,916		8.50	%	—		—		76,272		8.50	%
For capital adequacy		51,485		6.00	%	51,470		6.00	%	53,841		6.00	%	53,839		6.00	%
Common Equity Tier 1 Capital (to risk weighted assets):
Actual		57,705		6.72	%	87,477		10.20	%	65,282		7.27	%	94,238		10.50	%
To be Well Capitalized	(1)	—		—		55,760		6.50	%	—		—		58,325		6.50	%
For capital adequacy with Capital Buffer	(2)	—		—		60,049		7.00	%	—		—		62,812		7.00	%
For capital adequacy		38,614		4.50	%	38,603		4.50	%	40,381		4.50	%	40,379		4.50	%
Tier 1 Leverage Capital (to average assets):
Actual		65,705		6.44	%	87,477		8.58	%	73,282		6.76	%	94,238		8.70	%
To be Well Capitalized	(1)	—		—		51,001		5.00	%	—		—		54,170		5.00	%
For capital adequacy		40,811		4.00	%	40,801		4.00	%	43,339		4.00	%	43,336		4.00	%

(1) Designation as "Well Capitalized" does not apply to bank holding companies - the Company. Such categorization of capital adequacy only applies to insured depository institutions - the Bank.

(2) The Capital Conservation Buffer implemented by the FDIC began to be phased in beginning January 1, 2016. It was not applicable to periods prior to that date and does not apply to bank holding companies - the Company.

XML

Fair Value and Interest Rate Risk (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value, by Balance Sheet Grouping

The following table provides a comparison of the carrying amounts and estimated fair values of Patriot’s financial assets and liabilities as of June 30, 2024 and December 31, 2023:

(In thousands)		June 30, 2024				December 31, 2023
	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and noninterest bearing balances due from banks	Level 1	$	2,514	$	2,514	$	2,195	$	2,195
Interest-bearing deposits due from banks	Level 1	91,097		91,097		50,322		50,322
Restricted cash	Level 1	41		41		14,019		14,019
Available-for-sale securities	Level 2	76,302		76,302		78,925		78,925
Available-for-sale securities	Level 3	10,365		10,365		10,262		10,262
Other investments	Level 2	4,450		4,450		4,450		4,450
Federal Reserve Bank stock	Level 2	2,193		2,193		2,090		2,090
Federal Home Loan Bank stock	Level 2	3,571		3,571		4,202		4,202
Loans receivable, net	Level 3	761,313		735,140		832,934		812,856
Loans held for sale	Level 2	14,092		14,245		20,767		21,557
SBA servicing assets	Level 3	790		873		857		932
Other real estate owned	Level 2	2,843		2,843		2,843		2,843
Accrued interest receivable	Level 2	6,452		6,452		7,219		7,219
Interest rate swap receivable	Level 2	95		95		74		74
Financial assets, total		$	976,118	$	950,181	$	1,031,159	$	1,011,946
Financial Liabilities:
Demand deposits	Level 2	$	93,736	$	93,736	$	110,056	$	110,056
Negotiable order of withdrawal accounts	Level 2	26,354		26,354		33,035		33,035
Savings deposits	Level 2	39,456		39,456		44,104		44,104
Interest bearing DDA	Level 2	227,253		227,253		171,577		171,577
Money market deposits	Level 2	167,836		167,836		200,280		200,280
Time deposits	Level 2	225,065		221,396		240,733		239,655
Brokered deposits	Level 1	21,202		21,157		40,526		40,453
FHLB, FRB and correspondent bank borrowings	Level 2	156,900		156,693		171,000		170,171
Senior notes	Level 2	11,792		11,425		11,723		11,397
Subordinated debt	Level 2	9,883		9,792		9,869		10,102
Junior subordinated debt owed to unconsolidated trust	Level 2	8,142		8,142		8,137		8,137
Note payable	Level 3	270		265		376		362
Accrued interest payable	Level 2	3,105		3,105		1,235		1,235
Interest rate swap liability	Level 2	95		95		74		74
Financial liabilities, total		$	991,089	$	986,705	$	1,042,725	$	1,040,638

Schedule of Fair Value, Assets Measured on Recurring Basis

The following tables detail the financial assets measured at fair value on a recurring basis and the valuation techniques utilized relative to the fair value hierarchy, as of June 30, 2024 and December 31, 2023:

(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
June 30, 2024:
U. S. Government agency and mortgage-backed securities	$	—	$	64,287	$	—	$	64,287
Corporate bonds	—		3,518		10,365		13,883
Subordinated notes	—		4,327		—		4,327
SBA loan pools	—		3,703		—		3,703
Municipal bonds	—		467		—		467
Available-for-sale securities	$	—	$	76,302	$	10,365	$	86,667
Interest rate swap receivable	$	—	$	95	$	—	$	95
Interest rate swap liability	$	—	$	95	$	—	$	95
December 31, 2023:
U. S. Government agency and mortgage-backed securities	$	—	$	65,671	$	—	$	65,671
Corporate bonds	—		3,504		10,262		13,766
Subordinated notes	—		4,227		—		4,227
SBA loan pools	—		5,037		—		5,037
Municipal bonds	—		486		—		486
Available-for-sale securities	$	—	$	78,925	$	10,262	$	89,187
Interest rate swap receivable	$	—	$	74	$	—	$	74
Interest rate swap liability	$	—	$	74	$	—	$	74

Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The reconciliation of the beginning and ending balances during the three and six months ended June 30, 2024 and 2023 for Level 3 available-for-sale securities is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Level 3 fair value, beginning of period	$	10,189	$	10,205	$	10,262	$	9,427
Purchases	—		—		—		—
Realized gain (loss)	—		—		—		—
Unrealized (loss) gain	176		(323)		103		455
Transfers in and /or out of Level 3	—		—		—		—
Level 3 fair value, end of period	$	10,365	$	9,882	$	10,365	$	9,882

Schedule of Fair Value Measurement Inputs and Valuation Techniques

The table below presents the valuation methodology and unobservable inputs for level 3 assets measured at fair value on a non-recurring basis as of June 30, 2024 and December 31, 2023:

(In thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
June 30, 2024:
Individually evaluated loans, net	$	30,173	Real Estate Appraisals	Discount for appraisal type	5.8	%	-	20%
SBA servicing assets	873		Discounted Cash Flows	Market discount rates	14.73	%	-	14.90%
December 31, 2023:
Impaired loans, net	$	12,928	Real Estate Appraisals	Discount for appraisal type	5.8	%	-	20%
SBA servicing assets	932		Discounted Cash Flows	Market discount rates	14.73	%	-	14.90%

XML

Available-for-Sale Securities - Investment Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	$ 108,141	$ 110,056
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(21,474)	(20,869)
Fair Value	86,667	89,187
U. S. Government agency and mortgage-backed securities
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	79,854	80,500
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(15,567)	(14,829)
Fair Value	64,287	65,671
Corporate bonds
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	17,996	17,995
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(4,113)	(4,229)
Fair Value	13,883	13,766
Subordinated notes
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	5,000	5,000
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(673)	(773)
Fair Value	4,327	4,227
SBA loan pools
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	4,733	6,002
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(1,030)	(965)
Fair Value	3,703	5,037
Municipal bonds
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	558	559
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(91)	(73)
Fair Value	$ 467	$ 486

XML

Available-for-Sale Securities - Investment Securities in a Continuous Loss Position (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Securities, Available-for-Sale [Line Items]
Less than 12 Months, Fair Value	$ 4,236	$ 9,984
Less than 12 Months, Unrealized (Loss)	(132)	(286)
12 Months or Longer, Fair Value	82,431	79,203
Less than 12 Months, Unrealized (Loss)	(21,342)	(20,583)
Fair Value	86,667	89,187
Unrealized (Loss)	(21,474)	(20,869)
U. S. Government agency and mortgage-backed securities
Debt Securities, Available-for-Sale [Line Items]
Less than 12 Months, Fair Value	4,236	9,984
Less than 12 Months, Unrealized (Loss)	(132)	(286)
12 Months or Longer, Fair Value	60,051	55,687
Less than 12 Months, Unrealized (Loss)	(15,435)	(14,543)
Fair Value	64,287	65,671
Unrealized (Loss)	(15,567)	(14,829)
Corporate bonds
Debt Securities, Available-for-Sale [Line Items]
Less than 12 Months, Fair Value	0	0
Less than 12 Months, Unrealized (Loss)	0	0
12 Months or Longer, Fair Value	13,883	13,766
Less than 12 Months, Unrealized (Loss)	(4,113)	(4,229)
Fair Value	13,883	13,766
Unrealized (Loss)	(4,113)	(4,229)
Subordinated notes
Debt Securities, Available-for-Sale [Line Items]
Less than 12 Months, Fair Value	0	0
Less than 12 Months, Unrealized (Loss)	0	0
12 Months or Longer, Fair Value	4,327	4,227
Less than 12 Months, Unrealized (Loss)	(673)	(773)
Fair Value	4,327	4,227
Unrealized (Loss)	(673)	(773)
SBA loan pools
Debt Securities, Available-for-Sale [Line Items]
Less than 12 Months, Fair Value	0	0
Less than 12 Months, Unrealized (Loss)	0	0
12 Months or Longer, Fair Value	3,703	5,037
Less than 12 Months, Unrealized (Loss)	(1,030)	(965)
Fair Value	3,703	5,037
Unrealized (Loss)	(1,030)	(965)
Municipal bonds
Debt Securities, Available-for-Sale [Line Items]
Less than 12 Months, Fair Value	0	0
Less than 12 Months, Unrealized (Loss)	0	0
12 Months or Longer, Fair Value	467	486
Less than 12 Months, Unrealized (Loss)	(91)	(73)
Fair Value	467	486
Unrealized (Loss)	$ (91)	$ (73)

XML

Available-for-Sale Securities - Narrative (Details)	Jun. 30, 2024 USD ($) position	Dec. 31, 2023 USD ($) position
Debt Securities, Available-for-Sale [Line Items]
Number of unrealized loss positions | position	49	50
Number of available-for-sale securities | position	49	50
Unrealized holding losses depreciation percentage from amortized cost	(19.90%)	(19.00%)
Available-for-Sale Securities
Debt Securities, Available-for-Sale [Line Items]
Allowance for credit loss	$ 0
U. S. Government agency and mortgage-backed securities
Debt Securities, Available-for-Sale [Line Items]
Allowance for credit loss	0
Corporate bonds
Debt Securities, Available-for-Sale [Line Items]
Allowance for credit loss	0
Asset Pledged as Collateral | Debt Securities
Debt Securities, Available-for-Sale [Line Items]
Financial instruments, owned, at fair value	$ 63,900,000	$ 68,500,000

XML

Available-for-Sale Securities - By Maturity Date (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Amortized Cost
Due Within 5 years	$ 5,153	$ 5,153
Due After 5 years through 10 years	23,585	24,719
Due After 10 years	79,403	80,184
Amortized Cost	108,141	110,056
Fair Value
Due Within 5 years	4,643	4,614
Due After 5 years through 10 years	18,143	19,186
Due After 10 years	63,881	65,387
Total	86,667	89,187
Available-for-sale securities with stated maturity dates
Amortized Cost
Due Within 5 years	5,153	5,153
Due After 5 years through 10 years	18,401	19,497
Due After 10 years	4,733	4,906
Amortized Cost	28,287	29,556
Fair Value
Due Within 5 years	4,643	4,614
Due After 5 years through 10 years	14,034	14,949
Due After 10 years	3,703	3,953
Total	22,380	23,516
Corporate bonds
Amortized Cost
Due Within 5 years	2,000	2,000
Due After 5 years through 10 years	15,996	15,995
Due After 10 years	0	0
Amortized Cost	17,996	17,995
Fair Value
Due Within 5 years	1,957	1,947
Due After 5 years through 10 years	11,926	11,819
Due After 10 years	0	0
Total	13,883	13,766
Subordinated notes
Amortized Cost
Due Within 5 years	3,000	3,000
Due After 5 years through 10 years	2,000	2,000
Due After 10 years	0	0
Amortized Cost	5,000	5,000
Fair Value
Due Within 5 years	2,550	2,527
Due After 5 years through 10 years	1,777	1,700
Due After 10 years	0	0
Total	4,327	4,227
SBA loan pools
Amortized Cost
Due Within 5 years	0	0
Due After 5 years through 10 years	0	1,096
Due After 10 years	4,733	4,906
Amortized Cost	4,733	6,002
Fair Value
Due Within 5 years	0	0
Due After 5 years through 10 years	0	1,084
Due After 10 years	3,703	3,953
Total	3,703	5,037
Municipal bonds
Amortized Cost
Due Within 5 years	153	153
Due After 5 years through 10 years	405	406
Due After 10 years	0	0
Amortized Cost	558	559
Fair Value
Due Within 5 years	136	140
Due After 5 years through 10 years	331	346
Due After 10 years	0	0
Total	467	486
U. S. Government agency and mortgage-backed securities
Amortized Cost
Due Within 5 years	0	0
Due After 5 years through 10 years	5,184	5,222
Due After 10 years	74,670	75,278
Amortized Cost	79,854	80,500
Fair Value
Due Within 5 years	0	0
Due After 5 years through 10 years	4,109	4,237
Due After 10 years	60,178	61,434
Total	$ 64,287	$ 65,671

XML

Loans Receivable and Allowance for Credit Losses - Loan Portfolio (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	$ 776,302		$ 848,859
Allowance for credit losses	(14,989)	$ (13,777)	(15,925)	$ (24,098)	$ (24,780)	$ (10,310)
Loans receivable, net	761,313		832,934
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	458,556		472,093
Allowance for credit losses	(7,958)	(5,620)	(6,089)	(10,039)	(9,809)	(6,966)
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	99,419		106,783
Allowance for credit losses	(678)	(671)	(607)	(1,027)	(853)	(665)
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	134,744		163,565
Allowance for credit losses	(1,215)	(1,199)	(1,269)	(1,673)	(1,799)	(1,403)
Consumer and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	77,397		99,688
Allowance for credit losses	(5,133)	(6,280)	(7,843)	(11,275)	(12,251)	(1,207)
Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	3,829		4,266
Allowance for credit losses	(5)	(7)	(4)	(33)	(21)	(24)
Construction to Permanent - CRE
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	2,357		2,464
Allowance for credit losses	$ 0	$ 0	$ (113)	$ (51)	$ (47)	$ (10)

XML

Loans Receivable and Allowance for Credit Losses - Narrative (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) loan	Jun. 30, 2023 USD ($) loan	Jun. 30, 2024 USD ($) loan	Jun. 30, 2023 USD ($) loan	Dec. 31, 2023 USD ($)	Dec. 31, 2022	Oct. 01, 2021	Jan. 01, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans purchased			$ 86,000	$ 16,443,000
Loans receivable, gross	$ 776,302,000		$ 776,302,000		$ 848,859,000
Maximum period of credit extension			18 months
Loans receivable, term to reset to FHLB rate			5 years
Transfers of loans receivable to loans held for sale			$ 4,339,000	0
Period for charged off of open-end credits			180 days
Period for charged off of close-end credits			90 days
Maximum period for charged off of consumer installment loans			120 days
Maximum period for charge off, open ended consumer credit			180 days
Interest lost on nonaccrual loans, impaired loans	933,000	$ 133,000	$ 1,500,000	268,000
Interest lost on nonaccrual loans	205,000	$ 193,000	226,000	$ 336,000
Threshold amount for nonaccrual and substandard loans evaluation	$ 100,000		$ 100,000
Discount to appraisal value	5.80%		5.80%
Discount of appraisal value, selling costs	8.00%		8.00%
Number of contract modifications | loan	0	0	0	0
Unfunded Loan Commitment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit loss	$ 235,000		$ 235,000		271,000
SBA Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	31,800,000		31,800,000		30,000,000.0
Percentage of principal balance guaranteed						75.00%	75.00%	90.00%
Transfers of loans receivable to loans held for sale	5,500,000	$ 0	5,500,000	$ 0
SBA CARES Act Paycheck Protection Program
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	131,000		131,000		133,000
Syndicated and Leveraged Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	5,700,000		$ 5,700,000		5,700,000
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum percentage of credit extension based on market value of collateral			75.00%
Loans purchased	0		$ 0
Loans receivable, gross	458,556,000		$ 458,556,000		472,093,000
Multi-family Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum percentage of credit extension based on market value of collateral			80.00%
Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of maximum loan to value			75.00%
Loans receivable, gross	3,829,000		$ 3,829,000		4,266,000
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans purchased	38,000	0	86,000	0
Loans receivable, gross	99,419,000		99,419,000		106,783,000
Consumer and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	77,397,000		$ 77,397,000		99,688,000
Consumer and Other | Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable term			2 years
Consumer and Other | Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable term			5 years
Consumer and Other | Unsecured Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	32,300,000		$ 32,300,000		48,500,000
Consumer and Other | Unsecured Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans purchased	0	4,300,000	0	13,600,000
Consumer and Other | Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans purchased	0	$ 1,500,000	0	$ 2,900,000
Construction to Permanent - CRE
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, gross	$ 2,357,000		$ 2,357,000		$ 2,464,000
Construction to Permanent - CRE | Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable term			20 years
Construction to Permanent - CRE | Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable term			25 years

XML

Loans Receivable and Allowance for Credit Losses - Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Allowance for Loan and Lease Losses [Roll Forward]
Balance	$ 13,777	$ 24,780	$ 15,925	$ 10,310	$ 10,310
Charge-offs	(2,253)	(2,670)	(5,365)	(4,468)	(18,417)
Recoveries	332	280	643	460
Provisions (credits)	3,133	1,708	3,786	4,795
Balance	14,989	24,098	14,989	24,098	15,925
Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Balance			0
Balance					0
Unfunded Loan Commitment
Allowance for Loan and Lease Losses [Roll Forward]
Provisions (credits)	41	(383)	(36)	(1,300)
Commercial Real Estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance	5,620	9,809	6,089	6,966	6,966
Charge-offs	0	0	(158)	0	(6,346)
Recoveries	0	0	0	0
Provisions (credits)	2,338	230	2,027	1,447
Balance	7,958	10,039	7,958	10,039	6,089
Commercial Real Estate | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Balance			0
Balance					0
Residential Real Estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance	671	853	607	665	665
Charge-offs	0	0	(21)	0	(515)
Recoveries	0	11	0	11
Provisions (credits)	7	163	92	162
Balance	678	1,027	678	1,027	607
Residential Real Estate | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Balance			0
Balance					0
Commercial and Industrial
Allowance for Loan and Lease Losses [Roll Forward]
Balance	1,199	1,799	1,269	1,403	1,403
Charge-offs	(404)	(4)	(814)	(6)	(927)
Recoveries	72	9	78	16
Provisions (credits)	348	(131)	682	41
Balance	1,215	1,673	1,215	1,673	1,269
Commercial and Industrial | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Balance			0
Balance					0
Consumer and Other
Allowance for Loan and Lease Losses [Roll Forward]
Balance	6,280	12,251	7,843	1,207	1,207
Charge-offs	(1,849)	(2,516)	(4,372)	(4,312)	(10,479)
Recoveries	260	260	565	433
Provisions (credits)	442	1,280	1,097	2,970
Balance	5,133	11,275	5,133	11,275	7,843
Consumer and Other | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Balance			0
Balance					0
Construction
Allowance for Loan and Lease Losses [Roll Forward]
Balance	7	21	4	24	24
Charge-offs	0	(150)	0	(150)	(150)
Recoveries	0	0	0	0
Provisions (credits)	(2)	162	1	163
Balance	5	33	5	33	4
Construction | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Balance			0
Balance					0
Construction to Permanent - CRE
Allowance for Loan and Lease Losses [Roll Forward]
Balance	0	47	113	10	10
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provisions (credits)	0	4	(113)	12
Balance	0	51	0	51	113
Construction to Permanent - CRE | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Balance			0
Balance					0
Unallocated
Allowance for Loan and Lease Losses [Roll Forward]
Balance	0	0	0	35	35
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provisions (credits)	0	0	0	0
Balance	$ 0	$ 0	0	$ 0	0
Unallocated | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Balance			$ 0
Balance					$ 0

XML

Loans Receivable and Allowance for Credit Losses - Individually Evaluated for Impairment (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Total allowance for credit losses	$ 14,989	$ 13,777	$ 15,925	$ 24,098	$ 24,780	$ 10,310
Business Activities Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated loans	5,717		4,205
Collectively evaluated loans	9,272		11,720
Total allowance for credit losses	14,989		15,925
Individually evaluated loans	35,890		17,133
Collectively evaluated loans	740,412		831,726
Loans receivable, gross	776,302		848,859
Commercial Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Total allowance for credit losses	7,958	5,620	6,089	10,039	9,809	6,966
Commercial Real Estate | Business Activities Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated loans	5,717		3,813
Collectively evaluated loans	2,241		2,276
Total allowance for credit losses	7,958		6,089
Individually evaluated loans	27,675		12,775
Collectively evaluated loans	430,881		459,318
Loans receivable, gross	458,556		472,093
Residential Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Total allowance for credit losses	678	671	607	1,027	853	665
Residential Real Estate | Business Activities Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated loans	0		0
Collectively evaluated loans	678		607
Total allowance for credit losses	678		607
Individually evaluated loans	172		0
Collectively evaluated loans	99,247		106,783
Loans receivable, gross	99,419		106,783
Commercial and Industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
Total allowance for credit losses	1,215	1,199	1,269	1,673	1,799	1,403
Commercial and Industrial | Business Activities Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated loans	0		392
Collectively evaluated loans	1,215		877
Total allowance for credit losses	1,215		1,269
Individually evaluated loans	5,686		3,904
Collectively evaluated loans	129,058		159,661
Loans receivable, gross	134,744		163,565
Consumer and Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Total allowance for credit losses	5,133	6,280	7,843	11,275	12,251	1,207
Consumer and Other | Business Activities Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated loans	0		0
Collectively evaluated loans	5,133		7,843
Total allowance for credit losses	5,133		7,843
Individually evaluated loans	0		0
Collectively evaluated loans	77,397		99,688
Loans receivable, gross	77,397		99,688
Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Total allowance for credit losses	5	7	4	33	21	24
Construction | Business Activities Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated loans	0		0
Collectively evaluated loans	5		4
Total allowance for credit losses	5		4
Individually evaluated loans	0		454
Collectively evaluated loans	3,829		3,812
Loans receivable, gross	3,829		4,266
Construction to Permanent - CRE
Financing Receivable, Allowance for Credit Loss [Line Items]
Total allowance for credit losses	0	0	113	51	47	10
Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated loans	0		0
Collectively evaluated loans	0		113
Total allowance for credit losses	0		113
Individually evaluated loans	2,357		0
Collectively evaluated loans	0		2,464
Loans receivable, gross	2,357		2,464
Unallocated
Financing Receivable, Allowance for Credit Loss [Line Items]
Total allowance for credit losses	$ 0	$ 0	$ 0	$ 0	$ 0	$ 35

XML

Loans Receivable and Allowance for Credit Losses - Credit Quality Indicators (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	$ 703		$ 703		$ 114,068
Year two	113,146		113,146		199,200
Year three	190,761		190,761		149,244
Year four	144,521		144,521		23,262
Year five	21,819		21,819		73,662
Prior	201,073		201,073		161,255
Revolving	104,279		104,279		128,168
Loans receivable, gross	776,302		776,302		848,859
Current period gross charge-offs
Year one			0		114
Year two			185		9,195
Year three			3,812		1,515
Year four			375		0
Year five			0		6,863
Prior			993		730
Revolving			0		0
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff	2,253	$ 2,670	5,365	$ 4,468	18,417
Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	703		703		113,849
Year two	112,761		112,761		189,926
Year three	180,271		180,271		145,918
Year four	127,080		127,080		22,982
Year five	14,762		14,762		62,770
Prior	184,609		184,609		159,460
Revolving	103,860		103,860		127,990
Loans receivable, gross	724,046		724,046		822,895
Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		6
Year two	5		5		6,830
Year three	6,480		6,480		2,464
Year four	941		941		0
Year five	1,053		1,053		37
Prior	2,829		2,829		11
Revolving	0		0		104
Loans receivable, gross	11,308		11,308		9,452
Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		213
Year two	380		380		2,444
Year three	4,010		4,010		862
Year four	16,500		16,500		280
Year five	6,004		6,004		10,855
Prior	13,635		13,635		1,784
Revolving	419		419		74
Loans receivable, gross	40,948		40,948		16,512
Commercial Real Estate
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		104,683
Year two	107,117		107,117		146,372
Year three	148,768		148,768		111,308
Year four	110,197		110,197		3,681
Year five	3,633		3,633		41,832
Prior	88,841		88,841		64,217
Revolving	0		0		0
Loans receivable, gross	458,556		458,556		472,093
Current period gross charge-offs
Year one			0		0
Year two			0		0
Year three			0		0
Year four			0		0
Year five			0		6,341
Prior			158		5
Revolving			0		0
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff	0	0	158	0	6,346
Commercial Real Estate | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		104,683
Year two	107,117		107,117		138,091
Year three	139,305		139,305		111,308
Year four	96,020		96,020		3,401
Year five	3,354		3,354		31,832
Prior	76,706		76,706		63,526
Revolving	0		0		0
Loans receivable, gross	422,502		422,502		452,841
Commercial Real Estate | Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		0
Year two	0		0		6,482
Year three	6,461		6,461		0
Year four	901		901		0
Year five	0		0		0
Prior	445		445		0
Revolving	0		0		0
Loans receivable, gross	7,807		7,807		6,482
Commercial Real Estate | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		0
Year two	0		0		1,799
Year three	3,002		3,002		0
Year four	13,276		13,276		280
Year five	279		279		10,000
Prior	11,690		11,690		691
Revolving	0		0		0
Loans receivable, gross	28,247		28,247		12,770
Residential Real Estate
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		0
Year two	0		0		1,251
Year three	1,235		1,235		2,975
Year four	2,851		2,851		11,577
Year five	11,397		11,397		15,770
Prior	83,236		83,236		74,596
Revolving	700		700		614
Loans receivable, gross	99,419		99,419		106,783
Current period gross charge-offs
Year one			0		0
Year two			0		0
Year three			0		0
Year four			0		0
Year five			0		0
Prior			21		515
Revolving			0		0
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff	0	0	21	0	515
Residential Real Estate | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		0
Year two	0		0		1,251
Year three	1,235		1,235		2,975
Year four	2,851		2,851		11,577
Year five	10,344		10,344		15,770
Prior	81,518		81,518		74,596
Revolving	700		700		614
Loans receivable, gross	96,648		96,648		106,783
Residential Real Estate | Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	1,053		1,053
Prior	1,416		1,416
Revolving	0		0
Loans receivable, gross	2,469		2,469
Residential Real Estate | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0
Year two	0		0
Year three	0		0
Year four	0		0
Year five	0		0
Prior	302		302
Revolving	0		0
Loans receivable, gross	302		302
Commercial and Industrial
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	678		678		2,718
Year two	1,864		1,864		14,264
Year three	15,558		15,558		23,900
Year four	22,278		22,278		8,004
Year five	6,789		6,789		10,016
Prior	10,397		10,397		8,128
Revolving	77,180		77,180		96,535
Loans receivable, gross	134,744		134,744		163,565
Current period gross charge-offs
Year one			0		0
Year two			0		182
Year three			0		85
Year four			0		0
Year five			0		516
Prior			814		144
Revolving			0		0
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff	404	4	814	6	927
Commercial and Industrial | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	678		678		2,696
Year two	1,591		1,591		13,916
Year three	14,917		14,917		23,099
Year four	21,394		21,394		8,004
Year five	1,064		1,064		9,578
Prior	8,215		8,215		7,024
Revolving	77,076		77,076		96,431
Loans receivable, gross	124,935		124,935		160,748
Commercial and Industrial | Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		6
Year two	5		5		348
Year three	19		19		0
Year four	40		40		0
Year five	0		0		37
Prior	968		968		11
Revolving	0		0		104
Loans receivable, gross	1,032		1,032		506
Commercial and Industrial | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		16
Year two	268		268		0
Year three	622		622		801
Year four	844		844		0
Year five	5,725		5,725		401
Prior	1,214		1,214		1,093
Revolving	104		104		0
Loans receivable, gross	8,777		8,777		2,311
Consumer and Other
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	25		25		6,667
Year two	4,165		4,165		37,313
Year three	25,200		25,200		4,785
Year four	3,009		3,009		0
Year five	0		0		5,590
Prior	18,599		18,599		14,314
Revolving	26,399		26,399		31,019
Loans receivable, gross	77,397		77,397		99,688
Current period gross charge-offs
Year one			0		114
Year two			185		9,013
Year three			3,812		1,280
Year four			375		0
Year five			0		6
Prior			0		66
Revolving			0		0
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff	1,849	2,516	4,372	4,312	10,479
Consumer and Other | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	25		25		6,470
Year two	4,053		4,053		36,668
Year three	24,814		24,814		4,724
Year four	2,986		2,986		0
Year five	0		0		5,590
Prior	18,170		18,170		14,314
Revolving	26,084		26,084		30,945
Loans receivable, gross	76,132		76,132		98,711
Consumer and Other | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		197
Year two	112		112		645
Year three	386		386		61
Year four	23		23		0
Year five	0		0		0
Prior	429		429		0
Revolving	315		315		74
Loans receivable, gross	1,265		1,265		977
Construction
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		0
Year two	0		0		0
Year three	0		0		3,812
Year four	3,829		3,829		0
Year five	0		0		454
Prior	0		0		0
Revolving	0		0		0
Loans receivable, gross	3,829		3,829		4,266
Current period gross charge-offs
Year one					0
Year two					0
Year three					150
Year four					0
Year five					0
Prior					0
Revolving					0
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff	0	150	0	150	150
Construction | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		0
Year two	0		0		0
Year three	0		0		3,812
Year four	3,829		3,829		0
Year five	0		0		0
Prior	0		0		0
Revolving	0		0		0
Loans receivable, gross	3,829		3,829		3,812
Construction | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one					0
Year two					0
Year three					0
Year four					0
Year five					454
Prior					0
Revolving					0
Loans receivable, gross					454
Construction to Permanent - CRE
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		0
Year two	0		0		0
Year three	0		0		2,464
Year four	2,357		2,357		0
Year five	0		0		0
Prior	0		0		0
Revolving	0		0		0
Loans receivable, gross	2,357		2,357		2,464
Current period gross charge-offs
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff	0	$ 0	0	$ 0
Construction to Permanent - CRE | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Year one	0		0		0
Year two	0		0		0
Year three	0		0		2,464
Year four	2,357		2,357		0
Year five	0		0		0
Prior	0		0		0
Revolving	0		0		0
Loans receivable, gross	$ 2,357		$ 2,357		$ 2,464

XML

Loans Receivable and Allowance for Credit Losses - Loan Portfolio Aging Analysis (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	$ 776,302	$ 848,859
Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	776,302	848,859
Non- accruing Loans	37,371	18,127
Commercial Real Estate
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	458,556	472,093
Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	458,556	472,093
Non- accruing Loans	27,676	12,775
Residential Real Estate
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	99,419	106,783
Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	99,419	106,783
Non- accruing Loans	302	0
Commercial and Industrial
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	134,744	163,565
Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	134,744	163,565
Non- accruing Loans	5,771	3,921
Consumer and Other
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	77,397	99,688
Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	77,397	99,688
Non- accruing Loans	1,265	977
Construction
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,829	4,266
Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,829	4,266
Non- accruing Loans	0	454
Construction to Permanent - CRE
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,357	2,464
Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,357	2,464
Non- accruing Loans	2,357	0
Pass
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	724,046	822,895
Pass | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	724,046	822,895
Non- accruing Loans	7,192	4,612
Pass | Commercial Real Estate
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	422,502	452,841
Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	422,502	452,841
Non- accruing Loans	3,225	1,629
Pass | Residential Real Estate
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	96,648	106,783
Pass | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	96,648	106,783
Non- accruing Loans	0	0
Pass | Commercial and Industrial
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	124,935	160,748
Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	124,935	160,748
Non- accruing Loans	3,967	2,983
Pass | Consumer and Other
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	76,132	98,711
Pass | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	76,132	98,711
Non- accruing Loans	0	0
Pass | Construction
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,829	3,812
Pass | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,829	3,812
Non- accruing Loans	0	0
Special mention
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	11,308	9,452
Special mention | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	11,308	9,452
Non- accruing Loans	0	0
Special mention | Commercial Real Estate
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	7,807	6,482
Special mention | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	7,807	6,482
Non- accruing Loans	0	0
Special mention | Residential Real Estate
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,469
Special mention | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,469
Non- accruing Loans	0
Special mention | Commercial and Industrial
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,032	506
Special mention | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,032	506
Non- accruing Loans	0	0
Special mention | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		2,464
Non- accruing Loans		0
Substandard
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	40,948	16,512
Substandard | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	40,948	16,512
Non- accruing Loans	30,179	13,515
Substandard | Commercial Real Estate
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	28,247	12,770
Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	28,247	12,770
Non- accruing Loans	24,451	11,146
Substandard | Residential Real Estate
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	302
Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	302
Non- accruing Loans	302
Substandard | Commercial and Industrial
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	8,777	2,311
Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	8,777	2,311
Non- accruing Loans	1,804	938
Substandard | Consumer and Other
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,265	977
Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,265	977
Non- accruing Loans	1,265	977
Substandard | Construction
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		454
Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	454
Non- accruing Loans	0	454
Substandard | Construction to Permanent - CRE
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,357	2,464
Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,357
Non- accruing Loans	2,357
Performing (Accruing) Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	738,931	830,732
Performing (Accruing) Loans | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	430,880	459,318
Performing (Accruing) Loans | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	99,117	106,783
Performing (Accruing) Loans | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	128,973	159,644
Performing (Accruing) Loans | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	76,132	98,711
Performing (Accruing) Loans | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,829	3,812
Performing (Accruing) Loans | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	2,464
Performing (Accruing) Loans | Pass | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	716,854	818,283
Performing (Accruing) Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	419,277	451,212
Performing (Accruing) Loans | Pass | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	96,648	106,783
Performing (Accruing) Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	120,968	157,765
Performing (Accruing) Loans | Pass | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	76,132	98,711
Performing (Accruing) Loans | Pass | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,829	3,812
Performing (Accruing) Loans | Special mention | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	11,308	9,452
Performing (Accruing) Loans | Special mention | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	7,807	6,482
Performing (Accruing) Loans | Special mention | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,469
Performing (Accruing) Loans | Special mention | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,032	506
Performing (Accruing) Loans | Special mention | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		2,464
Performing (Accruing) Loans | Substandard | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	10,769	2,997
Performing (Accruing) Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,796	1,624
Performing (Accruing) Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Performing (Accruing) Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	6,973	1,373
Performing (Accruing) Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Performing (Accruing) Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Performing (Accruing) Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Non-accruing Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans	37,371	18,127
Non-accruing Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans	3,225	1,629
Non-accruing Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans	3,967	2,983
Non-accruing Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans	24,451	11,146
Non-accruing Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans	302
Non-accruing Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans	1,804	938
Non-accruing Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans	1,265	977
Non-accruing Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans		454
Non-accruing Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Non- accruing Loans	2,357
Total Past Due | Performing (Accruing) Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	20,698	7,931
Total Past Due | Performing (Accruing) Loans | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	16,956	2,505
Total Past Due | Performing (Accruing) Loans | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	210	1,439
Total Past Due | Performing (Accruing) Loans | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,107	1,304
Total Past Due | Performing (Accruing) Loans | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,425	2,683
Total Past Due | Performing (Accruing) Loans | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Total Past Due | Performing (Accruing) Loans | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Total Past Due | Performing (Accruing) Loans | Pass | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	17,035	7,057
Total Past Due | Performing (Accruing) Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	14,288	2,505
Total Past Due | Performing (Accruing) Loans | Pass | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	210	1,439
Total Past Due | Performing (Accruing) Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,112	430
Total Past Due | Performing (Accruing) Loans | Pass | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,425	2,683
Total Past Due | Performing (Accruing) Loans | Pass | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Total Past Due | Performing (Accruing) Loans | Special mention | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	901	348
Total Past Due | Performing (Accruing) Loans | Special mention | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	901	0
Total Past Due | Performing (Accruing) Loans | Special mention | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Total Past Due | Performing (Accruing) Loans | Special mention | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	348
Total Past Due | Performing (Accruing) Loans | Special mention | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		0
Total Past Due | Performing (Accruing) Loans | Substandard | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,762	526
Total Past Due | Performing (Accruing) Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,767	0
Total Past Due | Performing (Accruing) Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Total Past Due | Performing (Accruing) Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	995	526
Total Past Due | Performing (Accruing) Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Total Past Due | Performing (Accruing) Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Total Past Due | Performing (Accruing) Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Total Past Due | Non-accruing Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	13,973	6,701
Total Past Due | Non-accruing Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,225	1,629
Total Past Due | Non-accruing Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,474	2,054
Total Past Due | Non-accruing Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,887	1,209
Total Past Due | Non-accruing Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	302
Total Past Due | Non-accruing Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,526	906
Total Past Due | Non-accruing Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,202	903
Total Past Due | Non-accruing Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		0
Total Past Due | Non-accruing Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,357
30 - 59 Days Past Due | Performing (Accruing) Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	11,802	5,986
30 - 59 Days Past Due | Performing (Accruing) Loans | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	9,030	2,274
30 - 59 Days Past Due | Performing (Accruing) Loans | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	177	1,439
30 - 59 Days Past Due | Performing (Accruing) Loans | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,593	946
30 - 59 Days Past Due | Performing (Accruing) Loans | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,002	1,327
30 - 59 Days Past Due | Performing (Accruing) Loans | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Pass | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	9,831	5,460
30 - 59 Days Past Due | Performing (Accruing) Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	7,540	2,274
30 - 59 Days Past Due | Performing (Accruing) Loans | Pass | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	177	1,439
30 - 59 Days Past Due | Performing (Accruing) Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,112	420
30 - 59 Days Past Due | Performing (Accruing) Loans | Pass | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,002	1,327
30 - 59 Days Past Due | Performing (Accruing) Loans | Pass | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Special mention | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	901	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Special mention | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	901	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Special mention | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Special mention | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Special mention | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		0
30 - 59 Days Past Due | Performing (Accruing) Loans | Substandard | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,070	526
30 - 59 Days Past Due | Performing (Accruing) Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	589	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	481	526
30 - 59 Days Past Due | Performing (Accruing) Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Performing (Accruing) Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
30 - 59 Days Past Due | Non-accruing Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,357	0
30 - 59 Days Past Due | Non-accruing Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Non-accruing Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Non-accruing Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Non-accruing Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
30 - 59 Days Past Due | Non-accruing Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Non-accruing Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
30 - 59 Days Past Due | Non-accruing Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		0
30 - 59 Days Past Due | Non-accruing Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,357
60 - 89 Days Past Due | Performing (Accruing) Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	7,718	1,604
60 - 89 Days Past Due | Performing (Accruing) Loans | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	6,748	231
60 - 89 Days Past Due | Performing (Accruing) Loans | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	33	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	514	358
60 - 89 Days Past Due | Performing (Accruing) Loans | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	423	1,015
60 - 89 Days Past Due | Performing (Accruing) Loans | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Pass | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	7,204	1,256
60 - 89 Days Past Due | Performing (Accruing) Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	6,748	231
60 - 89 Days Past Due | Performing (Accruing) Loans | Pass | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	33	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	10
60 - 89 Days Past Due | Performing (Accruing) Loans | Pass | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	423	1,015
60 - 89 Days Past Due | Performing (Accruing) Loans | Pass | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Special mention | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	348
60 - 89 Days Past Due | Performing (Accruing) Loans | Special mention | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Special mention | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Special mention | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	348
60 - 89 Days Past Due | Performing (Accruing) Loans | Special mention | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		0
60 - 89 Days Past Due | Performing (Accruing) Loans | Substandard | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	514	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	514	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
60 - 89 Days Past Due | Performing (Accruing) Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
60 - 89 Days Past Due | Non-accruing Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	5,075	1,157
60 - 89 Days Past Due | Non-accruing Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,653	0
60 - 89 Days Past Due | Non-accruing Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,568	0
60 - 89 Days Past Due | Non-accruing Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	581	770
60 - 89 Days Past Due | Non-accruing Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
60 - 89 Days Past Due | Non-accruing Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	273	371
60 - 89 Days Past Due | Non-accruing Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	16
60 - 89 Days Past Due | Non-accruing Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		0
60 - 89 Days Past Due | Non-accruing Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,178	341
90 Days or Greater Past Due | Performing (Accruing) Loans | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,178	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	341
90 Days or Greater Past Due | Performing (Accruing) Loans | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Pass | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	341
90 Days or Greater Past Due | Performing (Accruing) Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Pass | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Pass | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	341
90 Days or Greater Past Due | Performing (Accruing) Loans | Pass | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Special mention | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Special mention | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Special mention | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Special mention | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Special mention | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		0
90 Days or Greater Past Due | Performing (Accruing) Loans | Substandard | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,178	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,178	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
90 Days or Greater Past Due | Performing (Accruing) Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
90 Days or Greater Past Due | Non-accruing Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	6,541	5,544
90 Days or Greater Past Due | Non-accruing Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,572	1,629
90 Days or Greater Past Due | Non-accruing Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	906	2,054
90 Days or Greater Past Due | Non-accruing Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,306	439
90 Days or Greater Past Due | Non-accruing Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	302
90 Days or Greater Past Due | Non-accruing Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,253	535
90 Days or Greater Past Due | Non-accruing Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,202	887
90 Days or Greater Past Due | Non-accruing Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		0
90 Days or Greater Past Due | Non-accruing Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Current | Performing (Accruing) Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	718,233	822,801
Current | Performing (Accruing) Loans | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	413,924	456,813
Current | Performing (Accruing) Loans | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	98,907	105,344
Current | Performing (Accruing) Loans | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	126,866	158,340
Current | Performing (Accruing) Loans | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	74,707	96,028
Current | Performing (Accruing) Loans | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,829	3,812
Current | Performing (Accruing) Loans | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	2,464
Current | Performing (Accruing) Loans | Pass | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	699,819	811,226
Current | Performing (Accruing) Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	404,989	448,707
Current | Performing (Accruing) Loans | Pass | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	96,438	105,344
Current | Performing (Accruing) Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	119,856	157,335
Current | Performing (Accruing) Loans | Pass | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	74,707	96,028
Current | Performing (Accruing) Loans | Pass | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	3,829	3,812
Current | Performing (Accruing) Loans | Special mention | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	10,407	9,104
Current | Performing (Accruing) Loans | Special mention | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	6,906	6,482
Current | Performing (Accruing) Loans | Special mention | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,469
Current | Performing (Accruing) Loans | Special mention | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	1,032	158
Current | Performing (Accruing) Loans | Special mention | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		2,464
Current | Performing (Accruing) Loans | Substandard | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	8,007	2,471
Current | Performing (Accruing) Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	2,029	1,624
Current | Performing (Accruing) Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Current | Performing (Accruing) Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	5,978	847
Current | Performing (Accruing) Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Current | Performing (Accruing) Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Current | Performing (Accruing) Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Current | Non-accruing Loans | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	23,398	11,426
Current | Non-accruing Loans | Pass | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0	0
Current | Non-accruing Loans | Pass | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	493	929
Current | Non-accruing Loans | Substandard | Commercial Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	22,564	9,937
Current | Non-accruing Loans | Substandard | Residential Real Estate | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	0
Current | Non-accruing Loans | Substandard | Commercial and Industrial | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	278	32
Current | Non-accruing Loans | Substandard | Consumer and Other | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	63	74
Current | Non-accruing Loans | Substandard | Construction | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross		$ 454
Current | Non-accruing Loans | Substandard | Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Past Due [Line Items]
Loans receivable, gross	$ 0

XML

Loans Receivable and Allowance for Credit Losses - Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: average recorded investment	$ 12,716	$ 3,888	$ 12,226	$ 5,139
With no related allowance recorded: interest income recognized	31	92	35	177
With a related allowance recorded: average recorded investment	22,980	15,827	23,519	16,470
With a related allowance recorded: interest income recognized	159	98	159	293
Impaired loans, average recorded investment	35,696	19,715	35,745	21,609
Impaired loans, interest income recognized	190	190	194	470
Business Activities Loans
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: recorded investment	13,325		13,325		$ 5,558
With no related allowance recorded: principal outstanding	21,369		21,369		9,239
With a related allowance recorded: recorded investment	22,565		22,565		11,575
With a related allowance recorded: principal outstanding	24,585		24,585		13,296
Related Allowance	5,717		5,717		4,205
Recorded Investment	35,890		35,890		17,133
Principal Outstanding	45,954		45,954		22,535
Commercial Real Estate
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: average recorded investment	5,107	387	5,108	680
With no related allowance recorded: interest income recognized	0	0	0	0
With a related allowance recorded: average recorded investment	22,763	10,405	22,942	10,651
With a related allowance recorded: interest income recognized	159	0	159	154
Impaired loans, average recorded investment	27,870	10,792	28,050	11,331
Impaired loans, interest income recognized	159	0	159	154
Commercial Real Estate | Business Activities Loans
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: recorded investment	5,111		5,111		2,838
With no related allowance recorded: principal outstanding	8,111		8,111		5,879
With a related allowance recorded: recorded investment	22,564		22,564		9,937
With a related allowance recorded: principal outstanding	23,197		23,197		10,137
Related Allowance	5,717		5,717		3,813
Recorded Investment	27,675		27,675		12,775
Principal Outstanding	31,308		31,308		16,016
Residential Real Estate
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: average recorded investment	172	748	172	992
With no related allowance recorded: interest income recognized	8	24	8	27
With a related allowance recorded: average recorded investment	0	1,352	0	1,468
With a related allowance recorded: interest income recognized	0	0	0	0
Impaired loans, average recorded investment	172	2,100	172	2,460
Impaired loans, interest income recognized	8	24	8	27
Residential Real Estate | Business Activities Loans
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: recorded investment	172		172		0
With no related allowance recorded: principal outstanding	171		171		0
Related Allowance	0		0		0
Recorded Investment	172		172		0
Principal Outstanding	171		171		0
Commercial and Industrial
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: average recorded investment	5,026	2,046	4,513	2,181
With no related allowance recorded: interest income recognized	23	68	27	150
With a related allowance recorded: average recorded investment	217	4,052	577	4,341
With a related allowance recorded: interest income recognized	0	98	0	139
Impaired loans, average recorded investment	5,243	6,098	5,090	6,522
Impaired loans, interest income recognized	23	166	27	289
Commercial and Industrial | Business Activities Loans
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: recorded investment	5,685		5,685		2,266
With no related allowance recorded: principal outstanding	10,611		10,611		2,899
With a related allowance recorded: recorded investment	1		1		1,638
With a related allowance recorded: principal outstanding	1,388		1,388		3,159
Related Allowance	0		0		392
Recorded Investment	5,686		5,686		3,904
Principal Outstanding	11,999		11,999		6,058
Consumer and Other
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: average recorded investment	0	128	0	293
With no related allowance recorded: interest income recognized	0	0	0	0
With a related allowance recorded: average recorded investment	0	18	0	10
With a related allowance recorded: interest income recognized	0	0	0	0
Impaired loans, average recorded investment	0	146	0	303
Impaired loans, interest income recognized	0	0	0	0
Construction
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: average recorded investment	0	579	0	993
With no related allowance recorded: interest income recognized	0	0	0	0
Impaired loans, average recorded investment	0	579	0	993
Impaired loans, interest income recognized	0	0	0	0
Construction | Business Activities Loans
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: recorded investment	0		0		454
With no related allowance recorded: principal outstanding	0		0		461
Related Allowance	0		0		0
Recorded Investment	0		0		454
Principal Outstanding	0		0		461
Construction to Permanent - CRE
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: average recorded investment	2,411	0	2,433	0
With no related allowance recorded: interest income recognized	0	0	0	0
Impaired loans, average recorded investment	2,411	0	2,433	0
Impaired loans, interest income recognized	0	$ 0	0	$ 0
Construction to Permanent - CRE | Business Activities Loans
Financing Receivable, Impaired [Line Items]
With no related allowance recorded: recorded investment	2,357		2,357		0
With no related allowance recorded: principal outstanding	2,476		2,476		0
Related Allowance	0		0		0
Recorded Investment	2,357		2,357		0
Principal Outstanding	$ 2,476		$ 2,476		$ 0

XML

Loans Held for Sale - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Transfers of loans receivable to loans held for sale			$ 4,339,000	$ 0
Loans serviced, but owned by third party	$ 44,200,000		44,200,000		$ 47,500,000
Servicing asset	790,000		790,000		857,000
Servicing asset at fair value	873,000		873,000		932,000
Credit Card Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held-for-sale	8,400,000		8,400,000
SBA Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held-for-sale	4,400,000		4,400,000		9,900,000
Transfers of loans receivable to loans held for sale	5,500,000	$ 0	5,500,000	$ 0
Commercial and Industrial | SBA Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held-for-sale	4,400,000		4,400,000		3,500,000
Commercial Real Estate | SBA Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held-for-sale					$ 6,400,000
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held-for-sale	1,300,000		1,300,000
Gain on sale of Loans held for sale	$ 10,000		$ 10,000

XML

Loans Held for Sale - Analysis of the Activity in the SBA Servicing Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Beginning balance	$ 902	$ 893	$ 857	$ 886
Servicing rights capitalized	9	24	73	58
Servicing rights amortized	(15)	(11)	(34)	(22)
Servicing rights disposed	(106)	(24)	(106)	(40)
Ending balance	$ 790	$ 882	$ 790	$ 882

XML

Deposits - Summary of Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Deposits [Abstract]
Non-interest bearing	$ 93,736	$ 110,056
Interest bearing:
Negotiable order of withdrawal accounts	26,354	33,035
Savings deposits	39,456	44,104
Interest bearing DDA	227,253	171,577
Money market	167,836	200,280
Certificates of deposit, $250,000 or less	162,361	175,988
Certificates of deposit, more than $250,000	62,704	64,745
Brokered deposits	21,202	40,526
Interest bearing, Total	707,166	730,255
Total Deposits	$ 800,902	$ 840,311

XML

Deposits - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
Deposits [Abstract]
Digit payment deposits	$ 255.8	$ 213.4

XML

Deposits - Contractual Maturities of Certificates of Deposit (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Deposit Liability [Line Items]
1 year or less	$ 206,843
More than 1 year through 2 years	26,793
More than 2 years through 3 years	12,380
More than 3 years through 4 years	70
More than 4 years through 5 years	181
Contractual maturities of certificates of deposit	246,267
Certificates of Deposit $250,000 or less
Deposit Liability [Line Items]
1 year or less	141,847
More than 1 year through 2 years	17,207
More than 2 years through 3 years	3,056
More than 3 years through 4 years	70
More than 4 years through 5 years	181
Contractual maturities of certificates of deposit	162,361
Certificates of Deposit more than $250,000
Deposit Liability [Line Items]
1 year or less	50,467
More than 1 year through 2 years	9,335
More than 2 years through 3 years	2,902
More than 3 years through 4 years	0
More than 4 years through 5 years	0
Contractual maturities of certificates of deposit	62,704
Brokered Deposits
Deposit Liability [Line Items]
1 year or less	14,529
More than 1 year through 2 years	251
More than 2 years through 3 years	6,422
More than 3 years through 4 years	0
More than 4 years through 5 years	0
Contractual maturities of certificates of deposit	$ 21,202

XML

Derivatives - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gain (loss) on derivative instruments, net, pretax, total	$ 0	$ 0	$ 0	$ 0

XML

Derivatives - Schedule of Derivative Instruments (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Accrued expenses and other liabilities	Accrued expenses and other liabilities
Interest rate swap receivable | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Derivative asset, notional amount	$ 1,309	$ 1,327
Derivative liability, notional amount	$ 1,309	$ 1,327
Maturity (Years)	5 years	5 years 6 months
Fixed Rate	4.38%	4.38%
Variable Rate	2.00%	2.00%
Derivative asset, fair value	$ 95	$ 74
Derivative liability, fair value	$ (95)	$ (74)

XML

Share-based Compensation and Employee Benefit Plan - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended		54 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Nov. 10, 2022	Dec. 31, 2011
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Salaries and benefits	$ 4,623,000	$ 4,661,000	$ 8,779,000	$ 8,928,000
Payments of ordinary dividends, common stock					$ 0
Employer matching contribution, match			50.00%
Employer matching contribution, percent of employees' gross pay			6.00%
Defined contribution plan, cost	88,000	82,000	$ 168,000	157,000
Restricted Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Cost not yet recognized, amount	$ 464,000		$ 464,000		$ 464,000
Cost not yet recognized, period for recognition			2 years 7 months 6 days
2012 Stock Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares authorized (in shares)						400,000	3,000,000
Number of shares available for grant (in shares)	127,665		127,665		127,665
Share based compensation expense	$ 41,000	23,000	$ 65,000	46,000
2012 Stock Plan | Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares approved for issuance						$ 300,000
2012 Stock Plan | Share-Based Payment Arrangement, Employee
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share based compensation expense	30,000	14,000	45,000	28,000
2012 Stock Plan | Share-Based Payment Arrangement, Nonemployee
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share based compensation expense	11,000	9,000	20,000	18,000
Salaries and benefits	$ 60,000	$ 53,000	$ 128,000	$ 108,000
2012 Stock Plan | Restricted Stock | Share-Based Payment Arrangement, Tranche One
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period			3 years
2012 Stock Plan | Restricted Stock | Share-Based Payment Arrangement, Tranche Two
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period			4 years
2012 Stock Plan | Restricted Stock | Share-Based Payment Arrangement, Tranche Three
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period			5 years

XML

Share-based Compensation and Employee Benefit Plan - Restricted Shares (Details) - Restricted Stock - $ / shares	3 Months Ended	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024
Number of Shares Awarded
Unvested at beginning of year (in shares)	27,665	17,506
Granted (in shares)	81,174	91,333
Unvested at end of year (in shares)	108,839	108,839
Weighted Average Grant Date Fair Value
Unvested at beginning of year, weighted average grant date fair value (usd per share)	$ 5.24	$ 6.09
Granted, weighted average grant date fair value (usd per share)	3.79	3.79
Unvested at end of year, weighted average grant date fair value (usd per share)	$ 4.16	$ 4.16

XML

Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Basis loss per share:
Net loss attributable to Common shareholders	$ (3,081)	$ (615)	$ (3,380)	$ (1,314)
Divided by:
Weighted average shares outstanding (in shares)	3,976,073	3,965,186	3,976,073	3,965,186
Basic loss per share of common stock (usd per share)	$ (0.77)	$ (0.16)	$ (0.85)	$ (0.33)
Diluted loss per share:
Net loss attributable to Common shareholders	$ (3,081)	$ (615)	$ (3,380)	$ (1,314)
Weighted average shares outstanding (in shares)	3,976,073	3,965,186	3,976,073	3,965,186
Effect of potentially dilutive restricted common shares (in shares)	0	0	0	0
Divided by:
Weighted average diluted shares outstanding (in shares)	3,976,073	3,965,186	3,976,073	3,965,186
Diluted loss per share of common stock (usd per share)	$ (0.77)	$ (0.16)	$ (0.85)	$ (0.33)
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive restricted shares of common stock (in shares)	8,695	1,528	4,330	427

XML

Financial Instruments With Off-balance Sheet Risk - Financial Instruments With Credit Risk (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Ceded Credit Risk [Line Items]
Commitments to extend credit	$ 103,909	$ 92,530
Unused lines of credit
Ceded Credit Risk [Line Items]
Commitments to extend credit	77,242	63,435
Undisbursed construction loans
Ceded Credit Risk [Line Items]
Commitments to extend credit	861	2,607
Home equity lines of credit
Ceded Credit Risk [Line Items]
Commitments to extend credit	$ 25,806	$ 26,488

XML

Financial Instruments With Off-balance Sheet Risk - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Ceded Credit Risk [Line Items]
Banks reserve based on analysis in unfunded commitments	$ 235	$ 271
Standby Letters of Credit
Ceded Credit Risk [Line Items]
FHLB stand-by letter of credit	$ 35,000

XML

Regulatory and Operational Matters - Regulatory Capital Amounts and Ratios (Details) $ in Thousands	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Parent Company
Total Capital (to risk weighted assets):
Actual	$ 84,432	$ 89,727
To be Well Capitalized	0	0
For capital adequacy with Capital Buffer	0	0
For capital adequacy	$ 68,647	$ 71,788
Actual	0.0984	0.1000
For capital adequacy	0.0800	0.0800
Tier 1 Capital (to risk weighted assets):
Actual	$ 65,705	$ 73,282
For capital adequacy with Capital Buffer	0	0
For capital adequacy	$ 51,485	$ 53,841
Actual	0.0766	0.0817
For capital adequacy	0.0600	0.0600
Common Equity Tier 1 Capital (to risk weighted assets):
Actual	$ 57,705	$ 65,282
To be Well Capitalized	0	0
For capital adequacy with Capital Buffer	0	0
For capital adequacy	$ 38,614	$ 40,381
Actual	0.0672	0.0727
For capital adequacy	0.0450	0.0450
Tier 1 Leverage Capital (to average assets):
Actual	$ 65,705	$ 73,282
To be Well Capitalized	0	0
For capital adequacy	$ 40,811	$ 43,339
Actual	0.0644	0.0676
For capital adequacy	0.0400	0.0400
Subsidiaries
Total Capital (to risk weighted assets):
Actual	$ 96,204	$ 100,683
To be Well Capitalized	85,784	89,732
For capital adequacy with Capital Buffer	90,073	94,218
For capital adequacy	$ 68,627	$ 71,785
Actual	0.1121	0.1122
To be Well Capitalized	0.1000	0.1000
For capital adequacy with Capital Buffer	0.1050	0.1050
For capital adequacy	0.0800	0.0800
Tier 1 Capital (to risk weighted assets):
Actual	$ 87,477	$ 94,238
To be Well Capitalized	68,627	71,785
For capital adequacy with Capital Buffer	72,916	76,272
For capital adequacy	$ 51,470	$ 53,839
Actual	0.1020	0.1050
To be Well Capitalized	0.0800	0.0800
For capital adequacy with Capital Buffer	0.0850	0.0850
For capital adequacy	0.0600	0.0600
Common Equity Tier 1 Capital (to risk weighted assets):
Actual	$ 87,477	$ 94,238
To be Well Capitalized	55,760	58,325
For capital adequacy with Capital Buffer	60,049	62,812
For capital adequacy	$ 38,603	$ 40,379
Actual	0.1020	0.1050
To be Well Capitalized	0.0650	0.0650
For capital adequacy with Capital Buffer	0.0700	0.0700
For capital adequacy	0.0450	0.0450
Tier 1 Leverage Capital (to average assets):
Actual	$ 87,477	$ 94,238
To be Well Capitalized	51,001	54,170
For capital adequacy	$ 40,801	$ 43,336
Actual	0.0858	0.0870
To be Well Capitalized	0.0500	0.0500
For capital adequacy	0.0400	0.0400

XML

Regulatory and Operational Matters - Narrative (Details) - Subsidiaries $ in Thousands	Jun. 30, 2024 USD ($)	Apr. 17, 2024	Dec. 31, 2023 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common equity tier 1 capital , actual	$ 87,477		$ 94,238
Common equity tier 1 capital ratio, actual	0.1020		0.1050
Tier 1 capital , actual	$ 87,477		$ 94,238
Tier 1 capital ratio, actual	0.1020		0.1050
Tier 1 leverage capital actual	$ 87,477		$ 94,238
Tier 1 leverage capital ratio, actual	0.0858		0.0870
Total risk-based capital, actual	$ 96,204		$ 100,683
Total risk-based capital ratio, actual	0.1121		0.1122
Mandated Ratio
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common equity tier 1 capital ratio, actual		0.1000
Tier 1 capital ratio, actual		0.1000
Tier 1 leverage capital ratio, actual		0.0900
Total risk-based capital ratio, actual		0.1150

XML

Fair Value and Interest Rate Risk - Narrative (Details)	Jun. 30, 2024 bond $ / shares	Dec. 31, 2023 bond
Fair Value Disclosures [Abstract]
Stock value par value (usd per share) | $ / shares	$ 100
Number of Level 3 instruments | bond	4	4

XML

Fair Value and Interest Rate Risk - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 86,667	$ 89,187
SBA servicing assets	873	932
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets, total	976,118	1,031,159
Financial liabilities, total	991,089	1,042,725
Estimated Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets, total	950,181	1,011,946
Financial liabilities, total	986,705	1,040,638
Level 1 | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash	41	14,019
Level 1 | Carrying Amount | Brokered Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	21,202	40,526
Level 1 | Carrying Amount | Cash and noninterest bearing balances due from banks
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	2,514	2,195
Level 1 | Carrying Amount | Interest-bearing deposits due from banks
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	91,097	50,322
Level 1 | Estimated Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash	41	14,019
Level 1 | Estimated Fair Value | Brokered Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	21,157	40,453
Level 1 | Estimated Fair Value | Cash and noninterest bearing balances due from banks
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	2,514	2,195
Level 1 | Estimated Fair Value | Interest-bearing deposits due from banks
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	91,097	50,322
Level 2 | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	76,302	78,925
Other investments	4,450	4,450
Federal Reserve Bank stock	2,193	2,090
Federal Home Loan Bank stock	3,571	4,202
Loans held for sale	14,092	20,767
Other real estate owned	2,843	2,843
Accrued interest receivable	6,452	7,219
FHLB, FRB and correspondent bank borrowings	156,900	171,000
Senior notes	11,792	11,723
Subordinated debt	9,883	9,869
Junior subordinated debt owed to unconsolidated trust	8,142	8,137
Accrued interest payable	3,105	1,235
Interest rate swap liability	95	74
Level 2 | Carrying Amount | Demand deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	93,736	110,056
Level 2 | Carrying Amount | Negotiable order of withdrawal accounts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	26,354	33,035
Level 2 | Carrying Amount | Savings deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	39,456	44,104
Level 2 | Carrying Amount | Interest bearing DDA
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	227,253	171,577
Level 2 | Carrying Amount | Money market deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	167,836	200,280
Level 2 | Carrying Amount | Time deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	225,065	240,733
Level 2 | Carrying Amount | Interest rate swap receivable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap receivable	95	74
Level 2 | Estimated Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	76,302	78,925
Other investments	4,450	4,450
Federal Reserve Bank stock	2,193	2,090
Federal Home Loan Bank stock	3,571	4,202
Loans held for sale	14,245	21,557
Other real estate owned	2,843	2,843
Accrued interest receivable	6,452	7,219
FHLB, FRB and correspondent bank borrowings	156,693	170,171
Senior notes	11,425	11,397
Subordinated debt	9,792	10,102
Junior subordinated debt owed to unconsolidated trust	8,142	8,137
Accrued interest payable	3,105	1,235
Interest rate swap liability	95	74
Level 2 | Estimated Fair Value | Demand deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	93,736	110,056
Level 2 | Estimated Fair Value | Negotiable order of withdrawal accounts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	26,354	33,035
Level 2 | Estimated Fair Value | Savings deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	39,456	44,104
Level 2 | Estimated Fair Value | Interest bearing DDA
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	227,253	171,577
Level 2 | Estimated Fair Value | Money market deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	167,836	200,280
Level 2 | Estimated Fair Value | Time deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits	221,396	239,655
Level 2 | Estimated Fair Value | Interest rate swap receivable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap receivable	95	74
Level 3 | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	10,365	10,262
Loans receivable, net	761,313	832,934
SBA servicing assets	790	857
Note payable	270	376
Level 3 | Estimated Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	10,365	10,262
Loans receivable, net	735,140	812,856
SBA servicing assets	873	932
Note payable	$ 265	$ 362

XML

Fair Value and Interest Rate Risk - Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	$ 86,667	$ 89,187
U. S. Government agency and mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	64,287	65,671
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	13,883	13,766
Subordinated notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	4,327	4,227
SBA loan pools
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	3,703	5,037
Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	467	486
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	86,667	89,187
Interest rate swap liability	95	74
Fair Value, Recurring | Interest rate swap receivable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap receivable	95	74
Fair Value, Recurring | U. S. Government agency and mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	64,287	65,671
Fair Value, Recurring | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	13,883	13,766
Fair Value, Recurring | Subordinated notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	4,327	4,227
Fair Value, Recurring | SBA loan pools
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	3,703	5,037
Fair Value, Recurring | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	467	486
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Interest rate swap liability	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Interest rate swap receivable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap receivable	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | U. S. Government agency and mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Subordinated notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | SBA loan pools
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Significant Observable Inputs (Level 2) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	76,302	78,925
Interest rate swap liability	95	74
Significant Observable Inputs (Level 2) | Fair Value, Recurring | Interest rate swap receivable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap receivable	95	74
Significant Observable Inputs (Level 2) | Fair Value, Recurring | U. S. Government agency and mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	64,287	65,671
Significant Observable Inputs (Level 2) | Fair Value, Recurring | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	3,518	3,504
Significant Observable Inputs (Level 2) | Fair Value, Recurring | Subordinated notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	4,327	4,227
Significant Observable Inputs (Level 2) | Fair Value, Recurring | SBA loan pools
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	3,703	5,037
Significant Observable Inputs (Level 2) | Fair Value, Recurring | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	467	486
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	10,365	10,262
Interest rate swap liability	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Interest rate swap receivable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap receivable	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | U. S. Government agency and mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	10,365	10,262
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Subordinated notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | SBA loan pools
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, at fair value	$ 0	$ 0

XML

Fair Value and Interest Rate Risk - Reconciliation of Level 3 Available-for-sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Level 3 fair value, beginning of year	$ 10,189	$ 10,205	$ 10,262	$ 9,427
Purchases	0	0	0	0
Realized gain (loss)	0	0	0	0
Unrealized (loss) gain	176	(323)	103	455
Transfers in and /or out of Level 3	0	0	0	0
Level 3 fair value, end of year	$ 10,365	$ 9,882	$ 10,365	$ 9,882
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration]	Unrealized holding loss on securities	Unrealized holding loss on securities	Unrealized holding loss on securities	Unrealized holding loss on securities

XML

Fair Value and Interest Rate Risk - Quantitative Information About Level 3 Fair Value Measurements (Details) $ in Thousands	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
SBA servicing assets	$ 790	$ 857
Fair Value
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Individually evaluated loans, net	30,173	12,928
SBA servicing assets	$ 873	$ 932
Fair Value | Real Estate Appraisals | Minimum | Range of Inputs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans, net	0.058	0.058
Fair Value | Real Estate Appraisals | Maximum | Range of Inputs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans, net	0.20	0.20
Fair Value | Discounted Cash Flows | Minimum | Range of Inputs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
SBA servicing assets	0.1473	0.1473
Fair Value | Discounted Cash Flows | Maximum | Range of Inputs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
SBA servicing assets	0.1490	0.1490

XML

Label	Element	Value
Cumulative Effect, Period of Adoption, Adjustment [Member]
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2016-13 [Member]
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue	$ 7.11
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue	7.11
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue	$ 7.11
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber	22,660
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber	22,660
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber	22,660