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Item 5. Market for Registrant’s Common Equity

2026-03-31 compared with 2025-04-15 · 262 added, 367 removed, 212 unchanged (75% of the section changed)

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This number does not reflect the number of persons or entities holding stock in nominee name through banks, brokerage firms or other nominees.

The Company’s ability to pay dividends is dependent on the Bank’s ability to pay dividends or execute a return of capital to the Company.

The Bank can make payments to the Company pursuant to a dividend policy requiring compliance with the Bank's OCC-approved capital program, in compliance with applicable law, and with the prior written determination of no supervisory objection by the Assistant Deputy Comptroller.

In addition to the capital program, certain other restrictions exist regarding the ability of the Bank to transfer funds to the Company in the form of cash dividends or return of capital.

The approval of the OCC is required to make payments in excess of the Bank’s earnings retained in the current year plus retained net earnings for the preceding two years.

The Company is also prohibited from paying dividends that would reduce its capital ratios below minimum regulatory requirements.

OCC regulations impose limitations upon all capital distributions by commercial institutions, like the Bank, such as dividends, returns of capital, and payments to repurchase or otherwise acquire shares.

The Company may not declare or pay cash dividends on or repurchase any of its shares of common stock, if the effect thereof would cause stockholders’ equity to be reduced below applicable regulatory capital maintenance requirements, or if such declaration and payments would otherwise violate regulatory requirements.

The Company did not pay any dividends since 2020, and has temporarily suspended dividend payments.

The Company’s ability to pay dividends depends substantially on the ability of Patriot Bank, N.A.

to pay dividends or otherwise distribute capital to the Company.

The Bank’s ability to make such payments is subject to applicable law, regulatory capital requirements, and supervisory restrictions.

In January 2025, the Bank entered into a Formal Agreement with the OCC.

Under the Formal Agreement, the Bank may declare or pay a dividend or make a capital distribution only if the Bank is in compliance with its Board-approved capital plan, would remain in compliance with that capital plan immediately following the dividend or capital distribution, the dividend or capital distribution otherwise complies with applicable law and regulation, and the Bank has received the prior written determination of no supervisory objection from the Assistant Deputy Comptroller.

In addition, OCC regulations generally require approval for dividends by the Bank in excess of the Bank’s current year retained net income plus retained net income for the preceding two years, and the Company may not declare or pay dividends on, or repurchase, its common stock if doing so would reduce capital below applicable regulatory requirements or otherwise violate applicable law or regulatory restrictions.

The Company has not paid dividends since 2020.

There is no assurance that Company will pay dividends in the future.

For information regarding our equity compensation plans, see PART III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.”

Performance Graph

The performance graph compares the Company’s cumulative total shareholder return on its common stock over the last five fiscal years to the NASDAQ Community Bank Total Return Index and the S&P 500 Total Return Index.

Total shareholder return is measured by dividing the sum of the cumulative amount of dividends for the measurement period (assuming dividend reinvestment) and the Company’s share price at the end of the measurement period, by the share price at the beginning of the measurement period.

Period Ending

2019 2020 2021 2022 2023 2024

Patriot National Bancorp ("PNBK") 100.00 % 77.90 % 121.87 % 83.07 % 30.02 % 15.20 %

Nasdaq Community Bank Index Total Return Index ("XABQ") 100.00 % 89.37 % 124.84 % 101.92 % 95.12 % 111.03 %

S&P 500 Total Return Index ("SP500TR") 100.00 % 118.40 % 152.78 % 124.79 % 157.59 % 197.02 %

Management ’ s Discussion and Analysis - Financial Condition & Results of Operations

Stock repurchases

The Company did not repurchase any shares of its common stock during the reporting period.

Equity Compensation Plan

The information regarding our equity compensation plans will be included in the Company’s definitive proxy statement to be filed with the SEC no later than April 30, 2026, in connection with the solicitation of proxies for the Company’s 2026 annual meeting of shareholders (“2026 Proxy Statement”), and is incorporated herein by reference.

Management ’ s Discussion and Analysis of Financial Condition & Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding the consolidated financial condition and results of operations of the Company.

The information contained in this section should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in Item 8 of this Annual Report on Form 10-K.

Critical Accounting Policies

The accounting and reporting policies of Patriot conform to accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and to general practices within the financial services industry.

2025 FORM 10-K 21

Critical Accounting Estimates

The Company’s consolidated financial statements are prepared in accordance with United States of America (“U.S.

GAAP”) and follow general practices within the financial services industry.

A summary of Patriot’s significant accounting policies is included in the Notes to consolidated financial statements that are referenced in Item 8.

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Although all of Patriot’s policies are integral to understanding its consolidated financial statements, certain accounting policies involve management to exercise judgment, develop assumptions, and make estimates that may have a material impact on the financial information presented in the consolidated financial statements or Notes thereto.

Management considers an accounting estimate to be critical if it requires assumptions that are highly uncertain at the time the estimate is made and changes in those assumptions are reasonably likely to have a material effect on the Company’s financial condition or results of operations.

Management has discussed the development and selection of its critical accounting estimates with the Audit Committee.

The assumptions and estimates are based on historical experience and other factors representing the best available information to management as of the date of the consolidated financial statements, up to and including the date of issuance or availability for issuance.

As the basis for the assumptions and estimates incorporated in the consolidated financial statements may change, as new information comes to light, the consolidated financial statements could reflect different assumptions and estimates.

Due to the judgments, assumptions, and estimates inherent in the following policies, management considers such accounting policies critical to an understanding of the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations.

As the basis for the assumptions and estimates incorporated in the consolidated financial statements may change, actual results could differ from those estimates.

Allowance for Credit Losses (ACL)

The Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, Accounting Standard Codification (“ASC”) 326, effective January 1, 2023, which introduced the current expected credit loss (“CECL”) methodology for estimating all expected losses over the life of a financial asset.

The allowance for credit losses represents management’s estimate of expected credit losses over the life of a financial asset carried at amortized cost.

Determining the amount of the allowance for credit losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the fair value of the underlying collateral and amount and timing of expected future cash flows on individually assessed financial assets, estimated credit losses on pools of loans with similar risk characteristics, and consideration of reasonable and supportable forecasts of macroeconomic conditions, all of which are susceptible to significant change.

The Company also maintains an allowance for lending-related commitments, specifically unfunded loan commitments, which relates to certain amounts the Company is committed to lend (not unconditionally cancellable) but for which funds have not yet been disbursed.

Loans deemed uncollectible are charged against and reduce the allowance.

A provision for credit losses is charged to current expense and acts to replenish the ACL in order to maintain the allowance at a level that management deems adequate.

Determining the allowance involves significant judgments and assumptions by management.

Because of the nature of the judgments and assumptions made by management, actual results may differ from these judgments and assumptions.

The Company determines its allowance for credit losses (“ACL”) under the current expected credit loss (“CECL”) methodology in ASC 326, which requires management to estimate expected credit losses over the remaining contractual life of financial assets carried at amortized cost, adjusted for expected prepayments when appropriate.

The ACL is established through a provision for credit losses charged to earnings and is reduced by charge-offs, net of recoveries.

The Company also maintains a reserve for unfunded lending commitments for those commitments that are not unconditionally cancellable.

The ACL is a critical accounting estimate because it requires significant management judgment and is sensitive to changes in assumptions, forecasts, and portfolio conditions.

The estimate incorporates both quantitative and qualitative factors, including historical loss experience, portfolio composition, delinquency trends, internal risk ratings, nonperforming asset levels, collateral values, the financial condition of borrowers, and reasonable and supportable forecasts of macroeconomic conditions.

For collateral-dependent loans, expected credit losses may depend significantly on the fair value of collateral, less estimated selling costs where applicable.

Loans that do not share similar risk characteristics with other loans are evaluated individually.

For loans evaluated on a collective basis, the Company segments the portfolio by loan type and other relevant risk characteristics and applies estimation methodologies that incorporate historical loss information, current conditions, and reasonable and supportable economic forecasts.

Following the forecast period, the Company reverts to historical loss information over an appropriate reversion period.

Management also applies qualitative adjustments, as needed, to reflect factors not fully captured in the quantitative model.

The ACL estimate is particularly sensitive to changes in economic forecasts, borrower performance, collateral values, portfolio mix, and the credit quality of the Company’s loans.

Changes in these assumptions or in the condition of the loan portfolio could result in material changes to the ACL and the related provision for credit losses in future periods.

The Company’s ACL methodology and the judgments used in determining the ACL are described more fully in the Notes to Consolidated Financial Statements included in Item 8.

FINANCIAL CONDITION

The Company’s total assets decreased $81.1 million, or 7.4%, from $1.09 billion at December 31, 2023 to $1.01 billion at December 31, 2024.

The decrease was primarily driven by a $141.4 million decline in gross loans held for investment, which was partially offset by a rise in cash, cash equivalents and restricted cash of $96.1 million.

The Company’s total assets increased $75.5 million, or 7.5%, from $1.01 billion at December 31, 2024 to $1.09 billion at December 31, 2025.

This was primarily reflected as a $140.2 million increase in investment securities and a $44.5 million increase in cash, cash equivalents and restricted cash, which was partially offset by a $114.4 million decline in loans receivable.

The change in asset mix reflected the Company’s continued balance sheet repositioning during 2025, including reduced loan exposure, increased liquidity, and deployment of funds into investment securities.

Cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash increased $96.1 million or 144.4%, from $66.5 million as of December 31, 2023 to $162.6 million as of December 31, 2024.

The increase in cash reflects the Company’s efforts to increase balance sheet liquidity due to the cumulative losses incurred by the Company in the prior two years and decreases in borrowing capacity.

Cash, cash equivalents and restricted cash increased $44.5 million or 27.4%, to $207.1 million as of December 31, 2025 from $162.6 million as of December 31, 2024.

The increase in 2025 was primarily driven by loan repayments, loan sales, and cash proceeds from issuance of common and preferred stock.

For further details, refer to the Consolidated Statements of Cash Flows.

2025 FORM 10-K 22

The higher liquidity position improved the Bank’s funding flexibility and supported the Company’s balance sheet repositioning during 2025.

Investment securities

The following table is a summary of the Company’s available-for-sale securities portfolio and other investments at the dates shown:

(In thousands) 2024 2023 2022

Total investments increased $140.2 million or 166.1%, to $224.7 million at December 31, 2025 from $84.4 million at December 31, 2024.

This increase primarily reflected purchases of available-for-sale securities of $145.2 million during 2025, as the Company deployed liquidity into investment securities as part of its balance sheet repositioning.

The portfolio at December 31, 2025 consisted primarily of U.S.

Government agency and mortgage-backed securities.

Corporate bonds 12,735 13,766 14,655

Subordinated notes 3,461 4,227 4,602

SBA loan pools 3,573 5,037 5,718

Municipal bonds — 486 499

Total available-for-sale securities, at fair value 79,992 89,187 84,520

Other investments, at cost 4,450 4,450 4,450

$ 84,442 $ 93,637 $ 88,970

Total investments decreased $9.2 million or 9.8%, from $93.6 million at December 31, 2023 to $84.4 million at December 31, 2024.

This decrease in 2024 was primarily attributable to $8.3 million sale of available-for-sale securities and $3.6 million in repayments and maturity of principal on available-for-sale securities, which was partially offset by the purchases of available-for-sale securities of $2.3 million, and net unrealized gain of $614,000 for the available-for-sale securities, associated with rising market interest rates.

During the year ended December 31, 2024, the Bank sold $8.3 million available-for-sale securities and recognized $334,000 net loss on sale.

In 2023, the Bank sold $1.8 million available-for-sale securities and recognized net gain on sale of securities of $24,000.

There was no sale of available-for-sale securities during the year ended December 31, 2022.

During 2025, the Bank sold $4.5 million of available-for-sale securities and recognized no net gain or loss on sale, compared to sales of $8.3 million and a net loss of $334 thousand in 2024.

Loans held for investment

The following table provides the composition of the Company’s loan held for investment portfolio as of December 31, for each of the years shown:

(In thousands) 2024 2023 2022

Amount % Amount % Amount %

Gross loans receivable decreased $114.9 million, or 16.2%, to $592.6 million at December 31, 2025 from $707.5 million at December 31, 2024.

The decline reflected the Company’s continued balance sheet repositioning during 2025, including restricted loan originations during the first three quarters of the year, portfolio runoff, loan sales and efforts to reduce risk and improve liquidity.

The Company sold 1539 loans with an unpaid principal balance of $67.8 million during 2025.

Net loans receivable decreased to $585.7 million at December 31, 2025 from $700.2 million at December 31, 2024.

The following table provides the composition of the Company’s loan held for investment portfolio as of December 31, for the years indicated:

(In thousands) Amount % Amount %

Loan portfolio segment:

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Loans receivable, net $ 585,723 $ 700,167

The gross loans receivable decreased $141.4 million or 16.7%, from $848.9 million at December 31, 2023 to $707.5 million at December 31, 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 December 31, 2024 and 2023, SBA loans included in the commercial real estate loans were $18.7 million and $12.9 million, respectively.

SBA loans included in the commercial and industrial loan were $11.2 million and $17.1 million as of December 31, 2024 and 2023, respectively.

At December 31, 2024, the net loan to deposit ratio was 72.4% and the net loan to total assets ratio was 69.2%.

At December 31, 2023, these ratios were 99.1% and 76.2%, respectively.

The net loan to deposit ratio and net loan to total assets improvement as of December 31, 2024 compared to as of December 31, 2023 was due to the loan runoff as well as increasing deposits and cash and cash equivalents to supplement liquidity at the Company during 2024.

The following table provides the composition of the commercial real estate loan portfolio segment as of December 31, for each of the years shown:

(In thousands) 2024 2023 2022

Amount % Amount % Amount %

Commercial Real Estate

CRE owner occupied $ 83,934 20.01 % $ 83,120 17.61 % $ 72,896 16.67 %

CRE multifamily 77,443 18.46 % 82,342 17.44 % 52,550 12.01 %

CRE office 55,900 13.33 % 61,368 13.00 % 50,179 11.47 %

CRE retail 46,946 11.19 % 63,918 13.54 % 56,471 12.91 %

Other CRE non-owner occupied 155,266 37.01 % 181,345 38.41 % 205,347 46.94 %

Total $ 419,489 100.00 % $ 472,093 100.00 % $ 437,443 100.00 %

The following table provides the commercial real estate loan portfolio segment by geographic concentrations as of December 31, for each of the years shown:

(In thousands) 2024 2023 2022

Amount % Amount % Amount %

New York $ 208,093 49.61 % $ 241,711 51.20 % $ 189,851 43.40 %

Connecticut 98,342 23.44 % 111,523 23.62 % 130,605 29.86 %

New Jersey 26,861 6.40 % 37,277 7.90 % 37,591 8.59 %

Outside Market (1) 86,193 20.55 % 81,582 17.28 % 79,396 18.15 %

Total Commercial Real Estate $ 419,489 100.00 % $ 472,093 100.00 % $ 437,443 100.00 %

(1) Outside Market consists of loans in all other states, none of which are greater than 5% of the total.

Maturities and Sensitivities of Loans to Changes in Interest Rates

Commercial real estate remained the largest loan category at December 31, 2025, representing 58.4% of total gross loans, compared to 59.3% at December 31, 2024.

Commercial and industrial loans increased as a percentage of the portfolio to 24.8% from 18.3%, while consumer and other loans declined to 3.4% from 8.5%.

SBA loans held for investment are included in the commercial real estate loans and commercial and industrial loan classifications above.

As of December 31, 2025 and 2024, SBA loans included in the commercial real estate loans were $9.7 million and $18.7 million, respectively, and SBA loans included in the commercial and industrial loan were $8.7 million and $11.2 million as of December 31, 2025 and 2024, respectively.

As of December 31, 2025, the net loan-to-deposit ratio was 60.6%, compared to 72.4% at December 31, 2024, and the net loan to total assets ratio was 53.8%, compared to 69.2% at December 31, 2024.

These declines reflected lower loan balances and higher deposits and liquidity during 2025.

The following table presents loans receivable, gross by portfolio segment, by contractual maturity as of December 31, 2025:

2025 FORM 10-K 23

Contractual Maturity of Loan Balance

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Consumer and Other 1,324 1,574 16,978 19,876

Construction 3,830 — — 3,830

Construction to permanent - CRE — — 2,357 2,357

Total $ 75,716 $ 218,255 $ 298,589 $ 592,562

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Total $ 75,716 $ 218,255 $ 298,589 $ 592,562

All variable rate loans account for 49.2% of the total loan portfolio.

Approximately 20.2% of the variable rate loan portfolio reprices with changes in interest rates within three months of the rate change.

The balance of the loan portfolio has an initial rate for a fixed period, for example one, three or five years and then reprice annually after the initial fixed period.

At December 31, variable-rate loans represented 57.0% of the total loan portfolio.

Approximately 30.8% of the variable-rate loan portfolio reprices within three months of a change in interest rates.

The remainder of the variable-rate portfolio generally carries an initial fixed-rate period, such as one, three, or five years, followed by periodic repricing.

These repricing characteristics are reflected in the Bank’s aggregate analysis of net interest sensitivity included in Item 7A.

of this report.

As a community bank, the Bank is invested in a local economy, which may be subject to the vagaries of general economic conditions.

As of December 31, 2024, the investments in Commercial Real Estate and Commercial and Industrial were approximately 77.6% of total loans receivable.

These loans generally are collateralized by the underlying real estate and supported by personal guarantees of the borrowers.

Commercial real estate and commercial and industrial loans represented approximately 83.2% of total gross loans at December 31, 2025.

Accordingly, the Company’s credit performance remains significantly influenced by borrower operating performance, collateral values, and economic conditions in the markets and customer segments served by the Bank.

For purposes of internal and regulatory CRE concentration monitoring, owner-occupied CRE loans are excluded from CRE totals and classified as commercial and industrial loans, although owner-occupied CRE loans are included in the CRE portfolio presentation above.

Allowance for Credit Losses on Loans

The Company adopted ASU 2016-13 effective January 1, 2023.

ASU 2016-13 requires the measurement of expected credit losses for financial assets, including loans and certain off-balance-sheet credit exposures, measured at amortized cost.

The allowance for credit losses was $7.3 million at December 31, 2024, compared to the allowance for credit losses of $15.9 million at December 31, 2023.

The decrease was primarily driven by charge-offs totaling $13.6 million from two large commercial real estate loans in December 2024.

Based upon the overall assessment and evaluation of the loan portfolio at December 31, 2024, management believes the allowance for credit losses of $7.3 million, which represents 1.0% of gross loans outstanding, was 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.

The Company used the CECL methodology in 2024 and 2023 while the incurred loss methodology was used in 2022:

The Company estimates its ACL under the CECL methodology in ASC 326.

The allowance for credit losses was $6.8 million at December 31, 2025, compared to $7.3 million at December 31, 2024.

Based on management’s evaluation of the loan portfolio at December 31, 2025, the ACL of $6.8 million, or 1.15% of gross loans, was considered appropriate to absorb expected credit losses in the loan portfolio as of that date.

The following table summarizes activity in the ACL:

Year Ended December 31,

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Balance at beginning of the period $ 7,305 $ 15,925

Impact of ASC 326 adoption — 13,001 —

Commercial Real Estate (13,889) (6,346) —

Residential Real Estate (21) (515) —

Commercial and Industrial (1,252) (927) (70)

Consumer and Other (7,431) (10,479) (1,690)

Construction — (150) (68)

Total charge-offs (22,593) (18,417) (1,828)

Commercial Real Estate — — 154

Residential Real Estate — 14 4

Commercial and Industrial 369 34 69

Consumer and Other 1,060 1,080 121

Total recoveries 1,429 1,128 348

Net charge-offs (21,164) (17,289) (1,480)

Provision for credit losses 1,607 12,544

Net charge-offs (2,073) (21,164)

Balance at end of the period $ 6,839 $ 7,305

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Allowance for credit losses to nonaccrual loans 26.44 % 28.24 %

The net charge-offs increased $3.9 million from $17.3 million as of December 31, 2023 to $21.2 million as of December 31, 2024, with an increase in net charge-offs to average loans ratio of 2.66% for the year ended December 31, 2024 , from 1.93% for the year ended December 31, 2023.

The increase in net charge-offs for the year ended December 31, 2024 was primarily associated charge-offs totaling $13.6 million from two large commercial real estate loans in December 2024.

The average loan balance decreased by $101.3 million, from $896.5 million for the year ended December 31, 2023, to $795.2 million for the year ended December 31, 2024.

The decrease in average loan balance, reflects the Company's continued approach of limiting loan growth and allowing loans to pay down to strengthen capital ratios as the balance sheet is reduced.

As of December 31, 2024 and December 31, 2023, the ACL was $7.3 million and $15.9 million, respectively.

The decrease was due to significant charge-offs of reserved CRE and consumer loans in 2024, which also impacted the ACL to loans ratio of 1.03% as of December 31, 2024, compared to ACL to loans ratio of 1.88% as of December 31, 2023.

Nonaccrual loans was $25.9 million as of December 31, 2024, compared to $18.1 million as of December 31, 2023.

The ACL to nonaccrual loans ratio was 28.24% as of December 31, 2024, compared to 87.85% as of December 31, 2023.

The rate at December 31, 2023 was significantly higher due to reserves on individually evaluated CRE loans that were subsequently charged-off in the fourth quarter of 2024.

Nonaccrual CRE loans of $13.6 million have been charged-off to net realizable value as of December 31, 2024.

The following table provides an allocation of allowance for credit losses by portfolio segment and the percentage of the loans to total loans:

2024 2023 2022

(In thousands) 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 Allowance for loan losses Percent of loans in each category to total loans

Commercial Real Estate $ 2,241 59.30 % $ 6,089 55.62 % $ 6,966 51.57 %

Residential Real Estate 596 13.03 % 607 12.58 % 665 14.63 %

Commercial and Industrial 1,077 18.32 % 1,269 19.27 % 1,403 16.36 %

Consumer and Other 3,386 8.48 % 7,843 11.74 % 1,207 16.63 %

Construction 5 0.54 % 4 0.50 % 24 0.58 %

Construction to permanent - CRE — 0.33 % 113 0.29 % 10 0.23 %

Unallocated — N/A — N/A 35 N/A

Total Allowance for credit losses $ 7,305 100.00 % $ 15,925 100.00 % $ 10,310 100.00 %

2025 FORM 10-K 24

The net charge-offs decreased $19.1 million to $2.1 million as of December 31, 2025 from $21.2 million as of December 31, 2024, Net charge-offs to average loans improved to 0.32% for the year ended December 31, 2025 from 2.66% for the year ended December 31, 2024.

The decrease in net charge-offs in 2025 was primarily due to charge-offs totaling $13.6 million related to two large commercial real estate loans recognized in the fourth quarter of 2024.

Average loans decreased by $153.2 million to $642.1 million for the year ended December 31, 2025 from$795.2 million for the year ended December 31, 2024.

The decline reflected the Company’s continued balance sheet repositioning during 2025, including restricted loan growth, portfolio runoff, and efforts to reduce risk and improve liquidity.

Although the ACL decreased to $6.8 million at December 31, 2025 from $7.3 million at December 31, 2024, the ACL-to-total loans ratio increased to 1.15% from 1.03%, primarily because gross loans declined during 2025.

The 2024 ACL balance and related coverage ratios were also affected by significant charge-offs of reserved commercial real estate and consumer loans during 2024.

Non-accrual loans were $24.4 million as of December 31, 2025, compared to $25.9 million as of December 31, 2024.

The ACL-to-non-accrual loans ratio was 26.44% as of December 31, 2025, compared to 28.24% as of December 31, 2024.

The 2024 ratio was higher primarily due to reserves on individually evaluated commercial real estate loans that were subsequently charged off in the fourth quarter of 2024.

Non-accrual CRE loans of $376 thousand have been charged-off to net realizable value as of December 31, 2025.

Nonperforming Assets

The following table presents non-accrual and accruing loans which were past due by over 90 days for the dates indicated:

The following table presents non-accrual loans and other real estate owned (“OREO”) as of the dates indicated:

(In thousands) 2025 2024

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Consumer and Other 413 730

Construction — 454 —

Construction to Permanent - CRE — 2,357

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Nonperforming loans to total loans, net 4.16 % 3.69 %

Non-accrual loans increased $7.7 million, from $18.1 million at December 31, 2023 to $25.9 million at December 31, 2024.

The $25.9 million of non-accrual loans at December 31, 2024 was comprised of 335 borrowers.

Of these, 14 loans were individually evaluated and a specific reserve of $463,000 was established as of December 31, 2024.

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.

As of December 31, 2023, the $18.1 million of non-accrual loans was comprised of 139 borrowers.

Of these, 19 loans were individually evaluated and a specific reserve of $4.2 million was established.

Non-accrual loans decreased $1.5 million, to $24.4 million at December 31, 2025 from $25.9 million at December 31, 2024.

Total nonperforming assets decreased $4.4 million to $24.4 million from $28.7 million, primarily reflecting the resolution of certain troubled loans and the sale of the sole OREO asset during 2025.

At December 31, 2025, non-accrual loans were comprised of 151 borrowers, compared to 335 borrowers at December 31, 2024.

At December 31, 2025, 9 loans were individually evaluated and a specific reserve of $2.1 million was established, compared to 14 individually evaluated loans and a specific reserve of $463 thousand at December 31, 2024.

The increase in specific reserves on individually evaluated loans reflected enhanced loan-level analysis performed during 2025 on certain credits within the portfolio, which resulted in refined reserve estimates for those loans.

Individually evaluated loans are measured based on collateral value or discounted expected cash flows, as applicable.

Nonperforming assets to total assets improved to 2.24% at December 31, 2025 from 2.84% at December 31, 2024.

Nonperforming loans to total loans, net increased to 4.16% from 3.69%, primarily because total loans declined during 2025.

2025 FORM 10-K 25

Loans held for sale

As of December 31, 2024, loans held for sale totaled $15.7 million, consisting of nil of SBA loans, $11.4 million loans held for sale for digital payments of credit cards and $4.3 million residential mortgage loans held for sale.

In comparison, at December 31, 2023, loans held for sale totaled $20.8 million, consisting of $9.9 million SBA loans and $10.8 million loans held for sale for digital payments of credit cards.

SBA loans made by the Bank under the SBA 7(a) program generally are made to small businesses to provide working capital or to provide funding for the purchase of businesses, real estate, or equipment.

SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided.

Patriot sells the guaranteed portion of SBA loans for liquidity purposes and to generate non-interest income.

Loans held for sale represent the guaranteed portion of SBA loans and are reflected at the lower of aggregate cost or market value.

No SBA loans held for sale were recorded as of December 31, 2024.

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.

The Company sold $8.4 million SBA loans and recorded $378,000 gain on sale for the year ended December 31, 2024.

For the year ended December 31, 2023, the Company sold $4.6 million SBA loans and recorded $169,000 gain on sale.

Total servicing assets recognized as of December 31, 2024 and December 31, 2023 were $739,000 and $857,000, respectively.

During 2024, $4.3 million loans held for investment were transferred to loans held for sale, and sold in 2024.

In 2023 and 2022, no loans held for investment were transferred to loans held for sale.

In July 2023, Patriot Bank's Digital Payments Division has entered into a Program Management Agreement with a buyer.

Under the agreement, Patriot originates credit card loans that are marketed by the buyer.

As of December 31, 2024 , the Bank had credit card loans held for sale totaling $11.4 million.

The credit card loans expected to be held for no longer than three days before being sold to the buyer.

The credit card 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 December 31, 2024, the Company reported residential mortgage loans held for sale totaling $4.3 million.

These loans are recorded at the lower of aggregate cost or market value.

For the year ended December 31, 2024, a total gain on sale of $62,000 was recorded.

A servicing asset of $27,000 was recognized as of December 31, 2024.

Loans held for sale totaled $24.5 million at December 31, 2025, compared to $15.7 million at December 31, 2024.

These balances primarily consist of credit card receivables originated for certain digital payments customers and sold shortly after origination to a third party.

These loans are fully cash-secured by deposits and are typically sold within three days at par value.

Premises and equipment

As of December 31, 2024 and 2023, Patriot recorded premises and equipment of $28.9 million and $29.9 million, respectively.

The decreases in premises and equipment were normal depreciation of the active premises and equipment during the year ended December 31, 2024.

Management continuously reviews its branch locations and corporate offices evaluating operating efficiencies and market share as well as effective customer service and delivery.

Premises and equipment totaled $28.1 million at December 31, 2025, compared to $28.9 million at December 31, 2024.

The decrease was primarily due to depreciation expense during 2025.

Management continues to evaluate its branch and office footprint in connection with operating efficiency, client service, and the Company’s strategic repositioning.

Other Real Estate Owned (“OREO”)

As of December 31, 2024 and 2023, the Bank recorded one OREO of $2.8 million.

The OREO balance represents the lower of the carrying value of loan receivable due from the mortgage of the foreclosed residential property or the estimated net realized value of the underlying property acquired through foreclosure.

During 2024 and 2023, no OREO balance was sold.

The Company performs its annual impairment analysis of goodwill.

In 2023, the impairment analysis determined that the estimated fair value of the reporting unit was less than its carrying value as of October 31, 2023.

As a result, a full impairment charge of $1.1 million was recorded for the year ended December 31, 2023.

As of December 31, 2024 and 2023, the goodwill balance was zero.

As of December 31, 2025, the Bank had no other real estate owned, compared to $2.8 million at December 31, 2024.

During 2025, the Bank sold its remaining OREO asset and recognized a gain of approximately $176 thousand following a valuation allowance recorded prior to sale.

The Company had no goodwill recorded on its Consolidated Balance Sheets at December 31, 2025 or December 31, 2024.

During 2023, the Company recorded a goodwill impairment charge of $1.1 million, which eliminated its remaining goodwill balance.

Core deposit intangible (“CDI”)

Core deposit intangible (“CDI”) was recorded as part of the Prime Bank business combination in May 2018.

Core deposit intangible (“CDI”) represents the value assigned to deposit relationships acquired in connection with the Prime Bank business combination in 2018.

The CDI is amortized over a 10-year period using the straight-line method.

The Company performed a review of the CDI as of October 31, 2024 and determined that there was no impairment of the CDI as of December 31, 2024.

The decrease in CDI of $47,000 from $203,000 at December 31, 2023 to $156,000 at December 31, 2024, was solely due to the amortization of the CDI for the year ended December 31, 2024.

CDI decreased $47 thousand to $109 thousand at December 31, 2025 from $156 thousand at December 31, 2024, solely due to the amortization.

Deferred Taxes

As of December 31, 2024 the carrying value of the deferred tax assets (“DTAs”) is nil as there is a full valuation allowance against all of the DTAs.

As of December 31, 2023, DTAs were $24.1 million, consisting predominately of Federal and state net operating losses, capitalized costs and allowance for credit losses.

As of December 31, 2024, Patriot had available approximately $41.9 million of Federal net operating loss carryforwards (“NOL”) that are offset by $15.5 million in Internal Revenue Code §382 limitations.

After applying the limitation, at December 31, 2024, Patriot has $26.4 million post-change net operating loss carry-forwards which do not expire.

For the years ended December 31, 2024 and 2023, the Bank did not record any uncertain tax position (“UTP”) related to the utilization of certain federal net operating losses.

Additionally, Patriot has approximately $63.4 million of NOLs available for Connecticut tax purposes at December 31, 2024, which may be used to offset up to 50% of taxable income in any year.

The NOLs will expire between 2030 and 2044.

The Company recognizes deferred tax assets to the extent we believe it is more likely than not the asset will be realized.

Quarterly, management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets, including future reversals of existing taxable temporary differences, projected taxable income, tax-planning strategies, carryback potential if permitted, and the results of recent operations.

A significant piece of objective negative evidence is the existence of a three or four year cumulative loss.

Such objective negative evidence limits the ability of management to consider other subjective evidence, such as projected taxable income.

When appropriate, the Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.

A valuation allowance is subject to ongoing adjustment based on changes in circumstances that affect management’s judgment about the realizability of the deferred tax asset.

Adjustments to increase or decrease the valuation allowance are charged or credited to the deferred tax component of the income tax provision or benefit or, in certain circumstances, to accumulated other comprehensive income.

Based on our assessment performed in September 2024, we determined that a full valuation allowance was appropriate against the Company’s U.S.

federal and state deferred tax assets.

For the year ended December 31, 2024, the Company recorded income tax expense of $23.8 million which includes $25.1 million of expense from the initial recognition of the full valuation allowance.

The key factor for providing a full valuation allowance was our 3-year cumulative operating losses.

Once the Company begins generating profits, we will re-evaluate whether a full valuation allowance remains appropriate or if the allowance should be reduced.

As deferred tax assets associated with NOL carryforwards are already a direct reduction to Tier 1 Capital, the valuation allowance at September 30, 2024 resulted in a reduction of Tier 1 Capital of $19.9 million.

As of December 31, 2025 and 2024 the carrying value of the deferred tax assets (“DTAs”) was zero because a full valuation allowance was maintained against all DTAs.

As of December 31, 2025, Patriot had available approximately $50.8 million of Federal net operating loss carryforwards (“NOL”), of which approximately $15.5 million was subject to limitations under Internal Revenue Code §382.

After giving effect to those limitations, the Company had approximately $35.3 million post-change federal NOL carryforwards, which do not expire.

These amounts reflect the Company’s existing Section 382 analysis and do not reflect the effect, if any, of ownership changes or additional limitations that may have resulted from the Private Placement or the registered direct offerings completed during 2025, as no updated Section 382 analysis with respect to those transactions had been completed as of the date of these consolidated financial statements.

Because the Company maintained a full valuation allowance against its deferred tax assets at December 31, 2025, management does not expect completion of such analysis to materially affect the net deferred tax asset balance reported as of that date, although it could affect the amount and availability of NOL carryforwards for future periods.

In addition, at December 31, 2025, the Company had approximately $64.2 million of Connecticut NOL carryforwards, which may be used to offset up to 50% of taxable income in any year and expire between 2030 and 2055.

The Company evaluates the realizability of DTAs on a quarterly basis.

In assessing whether a valuation allowance is required, management considers all available positive and negative evidence, including recent operating results, cumulative earnings or losses, projections of future taxable income, reversal of existing taxable temporary differences, and tax planning strategies.

The principal factor supporting the full valuation allowance at December 31, 2025 was the existence of cumulative losses in recent years, which constituted significant negative evidence regarding realizability.

During 2025, the Bank returned to profitability at the bank level, although the Company remained unprofitable on a consolidated basis for the year ended December 31, 2025.

Based on improved operating performance and current projections, the Company is evaluating whether a full valuation allowance will remain appropriate in future periods.

The Company will continue to reassess

2025 FORM 10-K 26

the appropriateness of the valuation allowance in future periods.

If management concludes, based on sufficient positive evidence, that some or all of the valuation allowance is no longer necessary, the release of all or a portion of the valuation allowance could materially affect income tax expense and net income in the period of release.

For the year ended December 31, 2025, the Company recorded income tax expense of $0.1 million.

As of December 31, 2025, the Company had two interest rate swaps outstanding.

One swap is held with a loan customer to provide a facility to mitigate the fluctuations in the variable rate on the respective loan.

The other swaps is with an outside third party.

The customer interest rate swap is matched in offsetting terms to the third-party interest rate swaps.

One swap was executed with a loan customer to provide a facility to mitigate fluctuations in the variable rate on the related loan, and the other was executed with an outside third party.

The customer interest rate swap is matched in offsetting terms with the third-party interest rate swap.

These 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 non-interest income.

Because the swaps are not designated as hedging instruments, changes in the fair value are recognized in other non-interest income.

The Company did not recognize any unrealized and realized gain or loss for the year ended December 31, 2025 and 2024.

Further discussion of the final derivatives is set forth in Note 11 and Note 21 to the Consolidated Financial Statements.

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

(In thousands) December 31,

2024 2023 2022

Non-interest bearing:

Deposits are the Company’s primary source of funding for lending and investment activities and an important component of liquidity management.

Total deposits were $965.8 million at December 31, 2025, compared to $966.6 million at December 31, 2024.

The following table summarizes the Company’s deposits at the dates indicated:

(In thousands) 2025 2024

Non-interest bearing:

Non-interest bearing DDA- Digital Payments 12,523 14,947 151,095

Total non-interest bearing 119,212 110,056 269,636

Total non-interest bearing deposits 106,766 119,212

Interest bearing:

2 unchanged sentences

Interest bearing DDA 267,447 205,995

Interest bearing DDA - Digital Payments 186,365 164,450 —

Money market 191,177 262,023

Money market - Digital Payments 66,654 33,986 46,173

Certificates of deposit, $250,000 or less 206,915 174,095

1 unchanged sentence

Brokered deposits 54,683 69,702

Total Interest bearing 847,385 730,255 590,810

Total interest bearing deposits 859,020 847,385

Total Deposits $ 965,786 $ 966,597

Total Digital Payments deposits $ 265,542 $ 213,383 $ 197,268

Additional deposit metrics

Deposits associated with digital payments customers $ 297,702 $ 265,542

Total retail branch bank deposits $ 341,453 $ 412,960

Total uninsured deposits $ 194,254 $ 297,845

Uninsured deposits to total deposits 30.81 % 39.78 % 39.98 %

Non-GAAP uninsured deposits to total deposits excluding Digital Payments deposits 15.80 % 20.06 % 22.35 %

Total deposits increased by $126.3 million during 2024, rising from $840.3 million as of December 31, 2023, to $966.6 million as of December 31, 2024.

The growth was primarily driven by higher deposits in the Digital Payments Division, an increase in brokered deposits, increased online money market deposits and higher retail branch deposits.

The Company raised additional deposits to lower borrowings, including the Fed Bank Term Funding Program (“BTFP”) as $70 million of BTFP borrowings were repaid during 2024, as well as a reduction in outstanding advances with the FHLB.

Non-GAAP Financial Measures:

In addition to evaluating the Company's financial performance in accordance with U.S.

generally accepted accounting principles ("GAAP"), management may evaluate certain non-GAAP financial measures, such as uninsured deposits to total deposits excluding Digital Payments deposits.

A computation and reconciliation of non-GAAP financial measures used for these purposes is contained in the accompanying Reconciliation of GAAP to Non-GAAP Measures tables.

We believe that by excluding Digital Payments deposits, management can present a view of uninsured deposits that better reflects the Company's traditional deposit base, providing investors with useful information for understanding our uninsured deposits position and financial stability.

Digital Payments deposits are analyzed for FDIC insurance at the Program Manager level.

Certain accounts are reciprocal deposits through the IntraFi network and therefore the entire deposit balances qualify for FDIC insurance.

The remaining deposit balances are aggregated at the Program Manager level, and any deposits exceeding $250,000 are considered uninsured.

The non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.

Reconciliation of GAAP to Non-GAAP Measures:

(Dollars in thousands) 2024 2023 2022

Non-GAAP Uninsured deposits to total deposits excluding Digital Payments deposits

Total deposits $ 966,597 $ 840,311 $ 860,446

Digital Payments deposits 265,542 213,383 197,268

Non-GAAP total deposits excluding Digital Payments deposits $ 701,055 $ 626,928 $ 663,178

Total uninsured deposits $ 297,845 $ 334,300 $ 343,980

Total uninsured Digital Payments deposits 187,048 208,524 195,778

Total uninsured deposits excluding Digital Payments deposits $ 110,797 $ 125,776 $ 148,202

Non-GAAP uninsured deposits to total deposits excluding Digital Payments deposits 15.80 % 20.06 % 22.35 %

As of December 31, 2024 and 2023, total borrowings were $33.1 million and $201.1 million, respectively.

Borrowings consist of Federal Home Loan Bank (“FHLB”) advances, FRB borrowing, senior notes, junior subordinated debentures, and a note payable to the seller from whom the Fairfield branch building was purchased in 2015.

Deposit composition changed during 2025 as the Company continued to reposition its funding base, including reductions in brokered deposits and uninsured deposits.

Brokered deposits decreased $26.3 million to $54.7 million at December 31, 2025 from $69.7 million at December 31, 2024, while uninsured deposits decreased $103.6 million to $194.3 million from $297.8 million over the same period.

Deposits associated with digital payments customers decreased $43.9 million to $297.7 million at December 31, 2025 from $265.5 million at December 31, 2024.

These changes reflected the Company’s ongoing efforts to manage liquidity, reduce certain deposit concentrations, and support its broader balance sheet repositioning during 2025.

2025 FORM 10-K 27

Total borrowings were $16.4 million compared to $33.1 million at December 31, 2024.

Borrowings consist of Federal Home Loan Bank (“FHLB”) advances, FRB borrowing, and junior subordinated debt.

The decrease reflected reduced reliance on wholesale funding during 2025 as part of the Company’s broader balance sheet repositioning and liquidity management efforts.

During 2025, the Bank’s funding flexibility also benefited from improved FHLB terms following an upgrade in the Bank’s FHLB status.

Shareholders’ Equity

Equity decreased $40.1 million from $44.4 million at December 31, 2023 to $4.3 million at December 31, 2024.

The decrease was primarily due to a net loss of $39.9 million for the year ended December 31, 2024.

For more information on the net loss for the year ended December 31, 2024 see Results of Operations section of this Management’s Discussion and Analysis.

Equity increased $90.4 million to $94.7 million at December 31, 2025 from $4.3 million at December 31, 2024.

The increase was primarily due to the Company’s recapitalization and related capital raises during 2025, partially offset by a net loss of $12.7 million for the year ended December 31, 2025.

For more information on shareholders’ equity and the net loss for the year ended December 31, 2025 see Note 16 and “Results of Operations” included elsewhere in this Management’s Discussion and Analysis.

Average Balances

The following table presents average balance sheets, interest income, interest expense and the corresponding yields earned, and rates paid for each of the years in the three-year period ended December 31, 2024.

(In thousands) Year Ended December 31,

Average interest-earning assets were substantially unchanged at $935.7 million for 2025 compared to $934.2 million for 2024, but asset mix changed significantly during the year.

Average loans declined $153.2 million, while average cash equivalents and restricted cash increased $147.1 million, reflecting the Company’s balance sheet repositioning and higher liquidity levels during 2025.

The yield on average interest-earning assets declined to 5.11% in 2025 from 5.59% in 2024, primarily due to the reduction in average loan balances and the shift into higher average balances of cash equivalents and restricted cash, which earned lower yields in 2025 than in 2024.

Average interest-bearing liabilities declined $23.5 million to $817.5 million for 2025 from $841.0 million for 2024, primarily due to lower average borrowings, partially offset by higher average interest-bearing deposits.

The average rate paid on interest-bearing liabilities declined to 3.51% in 2025 from 3.83% in 2024.

Net interest income decreased to $19.1 million in 2025 from $20.1 million in 2024, and net interest margin decreased to 2.04% from 2.14%.

The following table presents average balances, interest income, interest expense and the corresponding yields earned, and rates paid for each of the years in the three-year period ended December 31, 2025.

2025 FORM 10-K 28

Year Ended December 31,

2025 2024 2023

Average Balance Interest Yield Average Balance Interest Yield Average Balance Interest Yield

(In thousands) Average Balance Interest Yield Average Balance Interest Yield Average Balance Interest Yield

Interest earning assets:

13 unchanged sentences

Subordinated debt 16,726 1,355 8.10 % 18,024 1,596 8.83 % 17,985 1,481 8.23 %

Note Payable 258 5 1.93 % 469 8 1.71 % 678 12 1.77 %

Note Payable and other 52 1 1.73 % 258 5 1.93 % 469 8 1.71 %

Total interest bearing liabilities 817,498 28,730 3.51 % 840,953 32,285 3.83 % 876,157 30,457 3.48 %

3 unchanged sentences

Shareholders' equity 61,524 36,135 46,507

Total Liabilities and Shareholders' Equity $ 988,441 $ 1,071,823 $ 1,025,402

Total liabilities and equity $ 973,096 $ 988,441 $ 1,071,823

Net interest income $ 19,112 $ 20,077 $ 28,500

Interest margin 2.14 % 2.79 % 3.46 %

Net interest margin 2.04 % 2.14 % 2.79 %

Interest spread 1.60 % 1.76 % 2.29 %

2025 FORM 10-K 29

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 years ended December 31, 2025 to 2024 and December 31, 2024 to 2023.

1 unchanged sentence

2025 compared to 2024 2024 compared to 2023

(In thousands) Increase/(Decrease) Increase/(Decrease)

Volume Rate Total Volume Rate Total

Increase/(Decrease) Increase/(Decrease)

(In thousands) Volume Rate Total Volume Rate Total

Interest earning assets:

1 unchanged sentence

Investments 120 129 249 (233) (72) (305)

Cash equivalents and other 1,074 (376) 698 (109) 1,101 992

Cash equivalents and restricted cash 7,446 (1,445) 6,001 1,074 (376) 698

Total interest earning assets (4,393) (112) (4,505) (5,731) (864) (6,595)

Interest bearing liabilities:

Deposit (2,032) 6,413 4,381 2,430 13,938 16,368

Deposits 2,727 (2,112) 615 (2,032) 6,413 4,381

Borrowings (3,316) (61) (3,377) (2,490) (175) (2,665)

8 unchanged sentences

Comparison of Results of Operations for the years 2025 and 2024

For the year ended December 31, 2024, the Company recorded net loss of $39.9 million ($(10.03) basic and diluted loss per share) compared to net loss of $4.2 million ($(1.05) basic and diluted loss per share) for the year ended December 31, 2023.

The results for the year of 2024 were significantly impacted by a $25.1 million full valuation allowance on the Company's deferred tax assets ("DTA") recorded as of September 30, 2024.

The accounting guidance under generally accepted accounting principles ("GAAP") require an assessment of the realizability of a DTA if the Company has had a recent history of cumulative losses.

Given the losses in the previous year and a half, management determined the need for a valuation allowance on the Company's DTAs.

The valuation allowance lowers the balance sheet asset with a charge to tax provision, but does not limit the potential future usage of the DTAs.

Pre-tax loss was $16.1 million for the year ended December 31, 2024, compared to pre-tax loss of $5.6 million for the year ended December 31, 2023.

Significant variances are summarized below and discussed in detail subsequently:

• Interest and dividend income decreased $6.6 million;

• Interest expense increased $1.8 million;

• Net interest income decreased $8.4 million;

• Provision for credit losses increased $5.0 million;

• Non-interest income increased $2.4 million;

• Non-interest expense decreased $628,000.

For the year ended December 31, 2025, the Company reported a net loss of $12.7 million, or $(0.17) per basic and diluted share, compared to a net loss of $39.9 million, or $(10.03) per basic and diluted share, for the year ended December 31, 2024.

The Company reported a pre-tax loss of $12.7 million for 2025, an improvement from a pre-tax loss of $16.1 million in 2024.

The improvement in pre-tax results was primarily driven by a substantially lower provision for credit losses in 2025, following significant credit-related charges in 2024, including large charge-offs associated with two commercial real estate credits, as the Company continued to address legacy credit issues.

This improvement was partially offset by lower net interest income and higher non-interest expense.

Net interest income decreased $1.0 million in 2025, while non-interest expense increased $8.7 million, reflecting higher compensation expense, including equity-based compensation, as well as elevated professional fees and other transition-related operating costs associated with management changes, remediation efforts, and the Company’s broader

2025 FORM 10-K 30

strategic repositioning.

Non-interest income increased $2.2 million in 2025.

The year-over-year improvement in net loss was also affected by a significantly lower provision for income taxes in 2025 compared to 2024.

Net interest income

Net interest income is the difference between interest income on interest earning assets and interest expense on interest-bearing liabilities.

Net interest income depends on the relative amounts of interest earning assets and interest-bearing liabilities and the interest rates earned or paid on them, respectively.

For the year ended December 31, 2024, interest income decreased to $52.4 million, as compared to $59.0 million for the year ended December 31, 2023, which was primarily attributable to a reduction of $101.3 million in average loan balances in 2024, and narrower net interest margin due to higher deposit costs and increase in nonaccrual loans.

For the year ended December 31, 2024, total interest expense increased to $32.3 million, as compared to $30.5 million for the year ended December 31, 2023, primarily due to an increase in average deposits balance of $19.4 million.

The increase in deposit interest expense reflects higher deposit balances and higher market interest rates.

Net interest income for the years ended December 31, 2024 and 2023 was $20.1 million and $28.5 million, respectively.

The Bank’s net interest margin decreased to 2.1% for the year ended December 31, 2024, compared with 2.8% for the year ended December 31, 2023.

The decline in net interest margin was primarily associated with an increase in the cost of deposits due to the significant rise in market interest rates, only partially mitigated by the rise in variable rate interest earning assets.

Net interest income represents the difference between interest income earned on interest-earning assets and interest expense paid on interest-bearing liabilities.

It is affected by the relative levels of interest-earning assets and interest-bearing liabilities, as well as the interest rates earned or paid on these balances.

For the year ended December 31, 2025, interest income decreased to $47.8 million, compared with $52.4 million for the year ended December 31, 2024.

The decrease primarily reflected lower average loan balances a shift in asset mix toward higher average balances of cash equivalents and restricted cash, which earned lower yields in 2025 than in 2024.

Interest expense for the year ended December 31, 2025 decreased to $28.7 million from $32.3 million in 2024, reflecting lower average wholesale borrowings and a lower average rate paid on interest-bearing liabilities, partially offset by higher average interest-bearing deposit balances.

As a result, net interest income decreased to $19.1 million in 2025 from $20.1 million in 2024.

Net interest margin decreased to 2.04% in 2025 from 2.14% in 2024.

Provision (Credit) for credit losses

For the year ended December 31, 2024, the provision for credit losses was $12.5 million, consisting of a $12.5 million provision for credit loss on loans and a $89,000 credit in reserve for the off-balance sheet exposure.

For the year ended December 31, 2025, the provision for credit losses was $1.5 million, consisting of a $1.6 million provision for credit loss on loans and a $0.1 million credit in reserve for the off-balance-sheet credit exposures.

For the year ended December 31, 2024, the provision for credit losses was $12.5 million, consisting of a $12.5 million provision for loan losses and a $0.1 million credit in reserve for the off-balance-sheet exposure.

The Bank has been selectively managing down its credit exposure in certain higher-risk areas in 2024.

The loan portfolio declined from $848.9 million as of December 31, 2023, to $707.5 million as of December 31, 2024.

This reduction in credit exposure (which included $13.6 million of charge-offs against the Bank’s two largest problem credits) has required a lower level of reserves.

Consequently, the ACL for loans outstanding decreased from $15.9 million as of December 31, 2023, to $7.3 million as of December 31, 2024.

The substantially lower provision in 2025 reflected the absence of the unusually elevated credit costs recognized in 2024, as well as lower net charge-offs and lower reserve requirements in 2025.

The 2024 provision was significantly affected by large charge-offs associated with two commercial real estate credits and the related reserve implications.

Gross loans declined from $707.5 million at December 31, 2024 to $592.6 million at December 31, 2025 as the Company continued its balance sheet repositioning and allowed portions of the loan portfolio to run off.

The allowance for credit losses on loans decreased to $6.8 million at December 31, 2025 from $7.3 million at December 31, 2024.

Non-interest income

For the year ended December 31, 2024, non-interest income increased to $8.4 million, as compared to $6.0 million in 2023.

The increase was primarily attributable to higher non-interest income from the digital payments program.

For the year ended December 31, 2025, non-interest income increased to $10.5 million from $8.4 million in 2024.

The increase was primarily attributable to higher fee income associated with increased business activity from certain existing larger digital payments program managers during 2025, as well as gains on certain financial instruments.

Non-interest expense

For the year ended December 31, 2024, non-interest expense decreased to $32.1 million, as compared to $32.7 million for the year ended December 31, 2023.

The decrease primary associated with a $1.1 million goodwill impairment recorded in the fourth quarter of 2023, which was offset by increased salaries and benefit expenses and professional services in 2024, some of which related to the buildup of the mortgage origination business.

For the year ended December 31, 2025, non-interest expense increased to $40.8 million from $32.1 million in 2024.

The increase reflected higher compensation expense, including equity-based compensation, as well as elevated professional fees and other transition-related operating costs associated with management changes, remediation efforts, and the Company’s broader strategic repositioning.

Non-interest expense in 2025 also reflected overlap costs incurred during the transition as the Company added executive management and other personnel while retaining significant legacy staffing during portions of the year.

Provision for income taxes

The Company reported a provision for income taxes of $23.8 million for the year ended December 31, 2024, compared to a benefit for income taxes of $1.5 million for the year ended December 31, 2023.

The provision for income taxes for year 2024 included a valuation allowance recorded against all deferred tax assets of $27.6 million, See Note 14 - Income Taxes.

The Company reported a provision for income taxes of $0.1 million for the year ended December 31, 2025, compared to a provision for income taxes of $23.8 million for the year ended December 31, 2024.

The 2024 provision was significantly affected by the recording of a full valuation allowance against deferred tax assets during that year.

At December 31, 2025, the Company continued to maintain a full valuation allowance against its deferred tax assets.

See Note 14 - Income Taxes to the Consolidated Financial Statements.

2025 FORM 10-K 31

Other financial measures and ratios:

12 unchanged sentences

Net interest income 3,954 4,188 5,010 5,962

Provision for credit losses 658 3,092 1,026 7,679 (1)

Provision for credit losses(a) 733 1,524 (431) (321)

Non-interest income 2,728 2,030 2,207 3,549

2 unchanged sentences

Provision (benefit) for income taxes 1 (49) (5) 112

Net loss $ (299) $ (3,081) $ (26,954) $ (9,548) (3)

Net loss(b) $ (2,777) $ (5,001) $ (2,657) $ (2,272)

Loss per share

1 unchanged sentence

Diluted $ (0.21) $ (0.06) $ (0.03) $ (0.02)

Weighted average shares outstanding - Basic 3,976,073 3,976,073 3,976,073 3,976,673 (4)

Weighted average shares outstanding - Diluted 3,976,073 3,976,073 3,976,073 3,976,673 (4)

(1) I n the fourth quarter of 2024, the provision for credit loss increased , primarily attributable to significant charge-offs for two individually evaluated commercial real estate loans.

(2) In the third quarter of 2024, a full valuation allowance on the Company’s U.S.

federal and state deferred tax assets was recorded.

This resulted in an increase in the Company’s income tax expense of approximately $25 million.

(3) Due to significant changes above, the net loss in the fourth quarter of 2024 decreased to $9.5 million, compared to a $27.0 million net loss in the third quarter of 2024.

(4) The weighted average diluted shares outstanding did not include 22,269, 8,695, 91,697, and 93,710 anti-dilutive restricted shares of common stock as of March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024, respectively.

Weighted average shares outstanding - Basic(c) 13,289,644 78,123,095 99,937,915 114,991,078

Weighted average shares outstanding - Diluted(c) 13,289,644 78,123,095 99,937,915 114,991,078

(a) In the second quarter of 2025, the increase in allowance was mainly attributed to qualitative factors incorporated into the ACL calculations, even though a reduction in loan balances and the recognition of charge-offs on the unsecured consumer loan portfolio would typically suggest a decrease.

(b) Due to significant changes above, the net loss in the second quarter 2025 was mainly attributed to loss on sales of loans and increased non-interest expenses primarily attributed to the higher salaries and benefits, along with other operating expenses.

(c) The weighted average diluted shares outstanding did not include 112,771, 4,597,710, 5,809,410, and 10,000,970 anti-dilutive restricted shares of common stock as of March 31, 2025, June 30, 2025, September 30, 2025 and December 31, 2025, respectively.

2025 FORM 10-K 32

The following tables present the summarized quarterly results of operations (unaudited) to the Consolidated Financial Statements for the calendar year 2024:

3 unchanged sentences

Net interest income 5,404 5,023 4,999 4,651

Provision (credit) for credit losses 2,220 1,325 4,688 (804) (1)

Provision for credit losses(a) 658 3,092 1,026 7,679

Non-interest income 2,247 2,063 2,115 1,937

Non-interest expense 7,226 7,999 8,396 8,460

(Loss) income before income taxes (956) (846) (5,103) 1,272

(Benefit) provision for income taxes (257) (231) (1,333) 367

Net (loss) income $ (699) $ (615) $ (3,770) $ 905 (4)

(Loss) earnings per share

Loss before income taxes (233) (4,005) (2,308) (9,551)

Provision (benefit) for income taxes(b) 66 (924) 24,646 (3)

Net loss(c) $ (299) $ (3,081) $ (26,954) $ (9,548)

Loss per share

Basic $ (0.08) $ (0.77) $ (6.78) $ (2.40)

Diluted $ (0.08) $ (0.77) $ (6.78) $ (2.40)

Weighted average shares outstanding - Basic 3,965,186 3,965,186 3,965,186 3,965,733 (6)

Weighted average shares outstanding - Diluted 3,965,186 3,965,186 3,965,186 3,965,733 (6)

(1) I n the fourth quarter of 2023, the provision for credit loss decreased to a credit , primarily due to decrease in loan balance and the reversal of a commitment reserve associated with its consumer loan portfolio that was no longer needed as the result of the termination of the commitments.

(2) The non-interest income was primarily attributable to an income of $1.3 million resulted from a credit loss sharing agreement entered with a seller/servicer of consumer loans.

(3) During the fourth quarter of 2023, the increase in non-interest expense was primarily attributable to an impairment charge for goodwill totaled $1.1 million.

(4) Due to significant changes above, the net income increased to $905,000, compared to net losses in the first three quarters of 2023.

(5) The sum of Earnings (loss) per share - Basic and Diluted of each of the quarters in the year ended December 31, 2023 does not agree to the amount of Basic and Diluted earnings per share presented on the Consolidated Statement of Operations for the year ended December 31, 2023, due to the impact of rounding to the nearest cent on the amount of Earnings per share - Basic and Diluted for the three months ended December 31, 2023 (i.e., the "Fourth Quarter").

(6) The weighted average diluted shares outstanding did not include 491, 1,528, 1,651, and 15,622 anti-dilutive restricted shares of common stock as of March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023, respectively.

Weighted average shares outstanding - Basic(d) 3,976,073 3,976,073 3,976,073 3,976,673

Weighted average shares outstanding - Diluted(d) 3,976,073 3,976,073 3,976,073 3,976,673

(a) In the fourth quarter of 2024, the provision for credit loss increased , primarily attributable to significant charge-offs for two individually evaluated commercial real estate loans.

(b) In the third quarter of 2024, a full valuation allowance on the Company’s U.S.

federal and state deferred tax assets was recorded.

This resulted in an increase in the Company’s income tax expense of approximately $25 million.

(c) Due to significant changes above, the net loss in the fourth quarter of 2024 decreased to $9.5 million, compared to a $27.0 million net loss in the third quarter of 2024.

(d) The weighted average diluted shares outstanding did not include 22,269, 8,695, 91,697, and 93,710 anti-dilutive restricted shares of common stock as of March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company measures liquidity in two primary ratios:

on-hand liquidity to total liabilities, and total liquidity to total liabilities.

The Company monitors liquidity using, among other measures, on-hand liquidity to total liabilities, and total liquidity to total liabilities.

On-hand liquidity is comprised of interest-bearing cash and cash equivalents and unpledged available-for-sale securities.

Total liquidity includes on-hand liquidity, plus total available credit lines, plus availability of brokered deposits which is subject to internal limitations.

The Company monitors other metrics in addition to on-hand liquidity and total liquidity to manage concentration risk in certain types of liabilities.

Total liquidity includes on-hand liquidity plus unused borrowing capacity and other available contingent funding

2025 FORM 10-K 33

sources, including brokered deposit capacity subject to internal limits.

The Company also monitors other metrics to manage liquidity and concentration risk in its funding base.

The Company's on-hand liquidity and total liquidity ratios for the year ended December 31, 2025 and December 31, 2024, are as follows:

20 unchanged sentences

Total liquidity to total liabilities 53.40 % 23.22 %

On-hand liquidity increased $93.0 million from December 31, 2023 to December 31, 2024 as the Company increased its cash balances to provide available liquidity since the borrowing capacity had been reduced.

The Company’s decline in financial performance resulted in less borrowing capacity from the FHLB and the brokered deposit channel.

The Company paid off the BTFP in September 2024 which has a slight benefit on the Company's Net Interest Income as the rate on the BTFP was slightly higher than the current replacement funding.

Both on-hand liquidity to total liabilities and total liquidity to total liabilities increased at December 31, 2024 compared to December 31, 2023 due to the increased cash balances and the reduction in total liabilities as the overall balance sheet has shrunk in an effort to improve the Bank's capital ratios.

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 are sufficient to cover probable and reasonable fluctuations in deposit accounts, and to meet other anticipated operational cash requirements at the Bank.

As of December 31, 2024, due to the decline in borrowing capacity, the Bank’s ability to fund significant unexpected deposit outflows was limited.

The Private Placement closing provided additional liquidity to both the Bank and the Company and alleviated the liquidity risk.

The Private Placement provided additional operating cash to the Bank and the Company and the amendment of the Company’s Senior Notes deferred interest payments until 2026 and extended the maturity to April 15, 2028 and the amendment of the Company’s Subordinated Notes deferred interest payment until 2026.

Net cash provided by operating activities increased by $13.4 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.

Within this activity there was a significant increase in originations of loans held for sale and proceeds from sale of assets held for sale.

This activity is primarily related to the Digital Payments Division credit card loans.

This program started in the third quarter of 2023 and continues today.

The activity generates non-interest income and only requires short term liquidity as the loans are originated and expected to be sold within three days.

Net cash provided by investing activities increased by $162.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase is primarily due to lower originations of loans receivable and purchases of loans receivable as the Company is focused on lowering total assets to improve the Company's capital ratios.

Net cash provided by financing activities decreased by $107.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The decrease is primarily due to activity in proceeds from FRB and correspondent bank borrowings and repayments of FRB and correspondent bank borrowings.

The Company did not require as much funding from FRB and correspondent bank borrowings due to the net cash provided by lower loan originations and loan purchases.

On-hand liquidity increased $229.5 million from December 31, 2024 to December 31, 2025 primarily reflecting higher balances of cash, cash equivalents, and unpledged available-for-sale securities following the Company’s capital raises and broader balance sheet repositioning during 2025.

These changes improved the Company’s funding flexibility and contingent liquidity position.

Liquidity represents the Company’s ability to meet its financial obligations as they come due, including deposit withdrawals, funding commitments, debt service, and other operating needs.

Management believes the Company’s liquidity position at December 31, 2025 was sufficient to meet expected funding needs and reasonably anticipated deposit fluctuations.

Capital raised during 2025, including the March 2025 private placement and subsequent capital transactions, provided additional liquidity and enhanced both the Bank’s and the Company’s funding flexibility.

Net cash provided by operating activities was $14.3 million for the year ended December 31, 2025, compared to net cash provided by operating activities of $2.7 million for the year ended December 31, 2024.

The year-over-year change was primarily driven by a larger net cash outflow related to loans held for sale activity, as originations exceeded sale proceeds by a greater amount in 2025 than in 2024, and by a lower provision for credit losses, which reduced a non-cash add-back to operating cash flow.

These factors were partially offset by higher share-based compensation, which increased non-cash expense in 2025.

Activity in loans held for sale primarily related to credit card receivables originated for certain digital payments customer programs, which are generally sold shortly after origination.

Net cash used in investing activities was $20.7 million for the year ended December 31, 2025, compared to net cash provided by investing activities of $135.0 million for the year ended December 31, 2024.

The 2025 investing cash outflow primarily reflected

2025 FORM 10-K 34

$145.2 million of purchases of available-for-sale securities.

That outflow was partially offset by $114.9 million of payments received on loans receivable, $4.5 million of proceeds from the maturity of other investments, and the absence of loan originations in 2025 compared to $48.9 million of loan originations in 2024.

In 2024, investing activities also benefited from higher loan repayments and materially lower securities purchases .

Net cash provided by financing activities was $79.1 million for the year ended December 31, 2025, compared to net cash used in financing activities of $41.6 million for the year ended December 31, 2024.

The 2025 financing cash inflow was primarily driven by proceeds from issuances of common stock and preferred stock, net of offering costs.

Financing activities in 2025 also reflected lower reliance on wholesale funding, including a $3.0 million net repayment of Federal Home Loan Bank advances and no net Federal Reserve Bank or correspondent bank borrowings outstanding at year end, as well as $3.0 million of senior note repayments and a modest net decrease in deposits.

In 2024, financing activities reflected a $126.3 million increase in deposits that was more than offset by $68.0 million of net repayments of Federal Home Loan Bank advances and $70.0 million of net repayments of Federal Reserve Bank and correspondent bank borrowings.

As a result of the foregoing, cash, cash equivalents and restricted cash increased $44.0 million during 2025, compared to an increase of $96.1 million during 2024.

As of December 31, 2025, the maturities of Patriot’s contractual obligations are as follows:

3 unchanged sentences

Brokered deposits 49,641 5,042 — — 54,683

FHB, FRB and correspondent bank borrowings 3,000 — — — 3,000

Senior notes — 12,000 — — 12,000

Subordinated debt — — 8,347 — 8,347

Junior subordinated debt — — — 8,248 8,248

Note payable 162 — — — 162

Operating lease obligations 382 348 156 524 1,410

Total contractual obligations $ 321,127 $ 17,524 $ 8,661 $ 8,772 $ 356,083

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 over the most recent three-year period but may resume in future periods.

The primary source of liquidity at the Company as a stand-alone parent company is return 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.

Return of capital payments from the Bank to the Company totaled $950,000 for the year ended December 31, 2024, $2.5 million for the year ended December 31, 2023, and $900,000 for the year ended December 31, 2022.

The return of capital payments for the year ended December 31, 2024 compared to the year ended December 31, 2023 were lower as the Company obtained an interest deferral on its senior notes until April 1, 2025, which is described in Note 25 Subsequent Events.

Management seeks to maintain a capital structure that supports regulatory requirements, planned balance sheet activity, and the ability to absorb potential losses, while also positioning the Company to improve profitability and shareholder value over time.

The Company has not paid dividends to shareholders during the most recent three-year period.

The primary source of liquidity at the parent company is dividends or other return of capital from the Bank.

Such payments are subject to regulatory restrictions, including OCC supervisory requirements and the Bank’s capital plan, and are used in part to service debt payments at the Company.

Return of capital payments from the Bank to the Company totaled zero for the year ended December 31, 2025, $1.0 million for the year ended December 31, 2024, and $2.5 million for the year ended December 31, 2023.

OFF-BALANCE SHEET ARRANGEMENTS

The Bank’s off-balance sheet commitments 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 or are contingent upon the customer adhering to the terms of the agreements, the total commitment amounts do not necessarily represent future cash requirements.

The Bank’s off-balance sheet arrangements consist primarily of unfunded loan commitments and standby letters of credit.

Because these commitments may expire unused or are contingent on the customer’s compliance with the underlying terms, the total commitment amounts do not necessarily represent future cash requirements.

As of December 31, 2025 and 2024, the Bank’s off-balance sheet commitments were $69 million and $87.6 million, respectively.

As of December 31, 2024, the Bank has an irrevocable stand-by letter of credit for a maximum of $45 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.

As of December 31, 2025, the Bank had an irrevocable stand-by letter of credit for a maximum of $55 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, 2026.

2025 FORM 10-K 35

REGULATORY CAPITAL REQUIREMENTS

7 unchanged sentences

Total Capital (to risk weighted assets) $ 129,587 20.76 % $ 120,329 19.25 % $ 44,534 6.07 % $ 56,536 7.71 %

Individual minimum capital ratio $ — — % $ 84,306 11.50 % $ — — % N/A N/A

Formal Agreement minimum (Bank only)(a) $ — — % $ 71,894 11.50 % $ — — % $ 84,306 11.50 %

Tier 1 Capital (to risk weighted assets) 117,567 18.84 % 116,657 18.66 % 33,545 4.57 % 55,546 7.58 %

Individual minimum capital ratio — — % 73,309 10.00 % — — % N/A N/A

Formal Agreement minimum (Bank only)(a) — — % 62,516 10.00 % — — % 73,309 10.00 %

Common Equity Tier 1 Capital (to risk weighted assets) 109,567 17.55 % 116,657 18.66 % 25,545 3.48 % 55,546 7.58 %

Individual minimum capital ratio — — % 73,309 10.00 % — — % N/A N/A

Formal Agreement minimum (Bank only)(a) — — % 62,516 10.00 % — — % 73,309 10.00 %

Tier 1 Leverage Capital (to average assets) 117,567 11.52 % 116,657 11.42 % 33,545 3.50 % 55,546 5.79 %

Individual minimum capital ratio — — % 86,306 9.00 % — — % N/A N/A

Capital adequacy is one of the most important factors used to determine the safety and soundness of individual banks and the banking system.

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.

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 capital ratio of 11.50%.

As of December 31, 2024, the Bank did not meet any of its regulatory capital requirements.

The common equity tier 1 capital was $55.5 million, or 7.58% of risk-weighted assets, below the required level of 10.00%.

The Tier 1 capital was $55.5 million, or 7.58% of risk-weighted assets, also below the required level of 10.00%.

The Tier 1 leverage capital was $55.5 million, or 5.79% of average assets, falling short of the required 9.00%.

The total risk-based capital was $56.5 million or 7.71% of risk-weighted assets, below the required 11.50%.

During 2024, the Bank significantly reduced its average and risk-based assets to work towards achieving the IMCR targets.

Average assets are down $124.4 million to $959.0 million as of December 31, 2024 from $1.1 billion as of December 31, 2023, reflecting the actions of the Company during the year to lower assets.

On January 14, 2025, the Bank entered into an agreement with the OCC, pursuant to which the Bank agreed, through its board of directors to take certain actions in the areas of strategic planning, capital planning, Bank Secrecy Act / Anti-Money Laundering risk management, payment activities oversight, credit administration and concentrations risk management.

The Bank’s Board appointed a Compliance Committee in January 2025, as required, to oversee the progress and compliance with the OCC Agreement.

The Capital Plan and Higher Minimums Article in the OCC Agreement established capital minimums that need to be met and maintained.

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 capital ratio of 11.50%.

As of December 31, 2024, the Bank did not meet all of its regulatory capital requirements.

The Private Placement results in capital ratios that are in excess of the minimums required by the OCC Agreement.

On January 17, 2025, the OCC notified the Bank that, in connection with the entry into the OCC Agreement, the individual minimum capital ratios previously established on April 17, 2024 for the Bank has been terminated.

Formal Agreement minimum (Bank only)(a) — — % 91,975 9.00 % — — % 86,306 9.00 %

(a) On January 17, 2025, the OCC notified the Bank that the individual minimum capital ratios established in April 2024 had been terminated in connection with the Bank’s entry into the Formal Agreement dated January 14, 2025.

The minimum ratios shown above for the Bank reflect the capital requirements established by the Formal Agreement.

Although the Bank’s reported capital ratios at December 31, 2025 exceeded those minimum ratios, the Formal Agreement provides that meeting and maintaining such ratios does not mean the Bank may be deemed to be “well capitalized” for purposes of 12 U.S.C.

§ 1831o and 12 C.F.R.

Federal banking regulations establish minimum leverage and risk-based capital requirements for insured depository institutions, including standards applicable to institutions seeking to be considered “well capitalized.”

In April 2024, the OCC established individual minimum capital ratios for the Bank.

On January 17, 2025, in connection with the Bank’s entry into the Formal Agreement on January 14, 2025, the OCC notified the Bank that the April 2024 individual minimum capital ratios had been terminated.

As reflected in the table above, the minimum capital ratios applicable to the Bank at December 31, 2025 were those established by the Formal Agreement.

At December 31, 2025, the Bank’s reported capital ratios exceeded both the standard “well capitalized” thresholds and the higher minimum capital ratios required by the Formal Agreement.

Specifically, the Bank’s common equity tier 1 capital ratio was 18.66%, its Tier 1 capital ratio was 18.66%, its total capital ratio was 19.25%, and its Tier 1 leverage ratio was 11.42%.

By comparison, at December 31, 2024, the Bank did not meet the higher minimum capital ratios then applicable.

The Company’s capital actions during 2025, including the March 2025 private placement and related recapitalization transactions, materially improved the Bank’s capital position.

Notwithstanding the Bank’s reported capital ratios at December 31, 2025, the Formal Agreement provides that meeting and maintaining specified capital levels does not mean that the Bank may be deemed to be “well capitalized” for purposes of 12 U.S.C.

§ 1831o and 12 C.F.R.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity