What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-04-15 · 732 added, 642 removed, 1621 unchanged (46% of the section changed)

2 unchanged sentences

- Report of Independent Registered Public Accounting Firm (PCAOB ID:

- Report of Independent Registered Public Accounting Firm (PCAOB ID:49)

- Consolidated Balance Sheets as of December 31, 2025 and 2024

4 unchanged sentences

- Notes to Consolidated Financial Statements

2025 FORM 10-K 38

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Patriot National Bancorp, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Patriot National Bancorp, Inc.

(the “Company”) as of December 31, 2025, the related consolidated statements of operations and comprehensive loss, changes to shareholders’ equity, and cash flows, for the year then ended, and the related notes (collectively, the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses - Loans - Quantitative Reserve

Critical Audit Matter Description

As described in Note 1, the Company’s Allowance for Credit Losses (“ACL”) is an estimate of losses arising from borrowers’ inability to make loan payments as required, which is calculated via a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the loan portfolio.

The Company’s ACL is calculated by collectively evaluating and individually evaluating loans.

The Company collectively evaluates applicable loans based on segments according to their homogeneous characteristics, aligned with the segmentation of the FDIC Bank Call Report.

2025 FORM 10-K 39

The ACL is maintained at a level estimated by management to be adequate to absorb potential loan losses.

Management’s periodic evaluation of the adequacy of the ACL is based on specific expectations for the future economic environment that are incorporated in the projection, with loss expectations to revert to the long-run historical mean after such time as management can make or obtain a reasonable and supportable forecast.

Management also considers the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may impact the borrower’s ability to repay (including the timing of future payments), the estimated value of any underlying collateral (if the loan is collateral dependent), composition of the loan portfolio, and other relevant factors.

This evaluation is inherently subjective as it requires material estimates based on management’s judgment regarding the projection of expected credit losses over the contractual lifetime of the loans.

Modeling of the ACL uses sophisticated statistical techniques to arrive at reasonable and supportable forecasts of expected losses.

The Company has contracted with a third-party vendor to assist in developing models for the ACL related to the Company’s loan portfolio.

The Company evaluates loans with similar risk characteristics in pools using a probability of default (“PD”) / loss given default ("LGD") method.

This current expected credit loss ("CECL") methodology forecasts the probability of default, loss given default, and exposure at default for loans in a given pool over their remaining life.

We identified the quantitative reserve determination related to the collectively evaluated loans as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment due to significant measurement uncertainty.

The quantitative reserve determination encompassed the evaluation of the methodology, including the methods and models used to estimate the PD, LGD, and prepayments and their significant assumptions in the collective ACL.

Such significant assumptions included portfolio segmentation, the selection of the multiple economic forecast scenarios including related weightings, economic parameters, credit ratings, the reasonable and supportable forecast period, the reversion period and the historical loss observation period.

How the Critical Audit Matter was Addressed in the Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures related to the Company’s process to develop the Company’s quantitative reserve computation included testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions.

In addition, we involved credit risk and valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s quantitative reserve computation methodology for compliance with U.S.

generally accepted accounting principles

• determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practices

• evaluating judgments made by the Company relative to the assessment of the PD, LGD, and prepayment models by comparing them to relevant Company-specific metrics and trends, the applicable industry and regulatory practices, and our own independently derived estimate

• assessing the conceptual soundness and performance of the PD, LGD, and prepayment models by inspecting the model documentation to determine whether the models are suitable for their intended use

We also assessed the sufficiency of the audit evidence obtained related to the ACL estimate by evaluating the:

• determination of cumulative results of the audit procedures

• qualitative aspects of the Company’s accounting practices

• potential bias in the accounting estimate.

/s/ Baker Tilly US, LLP

New York, New York

March 31, 2026

We have served as the Company’s auditor since 2025.

2025 FORM 10-K 40

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Patriot National Bancorp, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Patriot National Bancorp, Inc.

and its subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Patriot National Bancorp, Inc.

(the Company) as of December 31, 2024, the related consolidated statements of operations, comprehensive loss, shareholders’ equity and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses for Loans

As described in Notes 1 and 4 of the consolidated financial statements, the Company’s allowance for credit losses (allowance) totaled $7.3 million as of December 31, 2024.

The recorded allowance was established based on an allowance of $6.8 million related to loans collectively evaluated and on an allowance of $0.5 million relating to loans individually evaluated as of December 31, 2024.

For loans that are collectively evaluated, the Company analyzes loans with similar risk characteristics in pools and uses a model and methodology that forecasts the probability of default (PD), loss given default (LGD), and exposure at default (EAD) for loans in a given pool over their remaining life, thereby deriving an allowance capable of absorbing estimated losses over the remaining life of the portfolio.

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 reasonable and supportable forecasts used in the model are influenced by changes in real Gross Domestic Product ("GDP"), State of Connecticut unemployment rate, New York Fed recession indicator, CoStar composite index, New York Case Schiller index, Coincident activity index, Michigan consumer activity index, S&P's BBB credit spreads, and the Company's loan delinquencies and charge off data.

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., commercial real estate 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.

An additional component of the allowance is determined by management based on a qualitative analysis of certain factors related to portfolio risks that are not incorporated in the calculated model.

The factors include lending practices, the ability and experience of the credit staff, the overall lending environment and external factors such as the regulatory environment and competition.

Credit losses for loans that do not 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 and loans rated substandard that are in excess of $100,000.

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.

We identified the assessment of certain inputs and assumptions used in the allowance for collectively evaluated loans as a critical audit matter because auditing certain underlying assumptions involved a high degree of complexity and auditor judgment given the high degree of subjectivity exercised by management.

Specifically, our assessment encompassed the evaluation of management’s determination of reasonable and supportable forecasts, prepayment speeds, the LGD floor, and qualitative factors applied to the quantitative model.

In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

Our audit procedures related to management’s determination of reasonable and supportable forecasts, prepayment speeds, the LGD floor, and qualitative factors applied to the quantitative model included the following:

- We obtained an understanding and tested the relevant controls for design and operating effectiveness related to management’s determination of reasonable and supportable forecasts, prepayment speeds, the LGD floor, and qualitative factors applied to the quantitative model.

- We tested the completeness and accuracy of data used by management in determining the selection and weighting of reasonable and supportable economic forecast scenarios by agreeing on a sample basis the underlying data and components to their appropriate internal or external sources.

- We evaluated the completeness and accuracy of data and assessed assumptions used by management in determining the prepayment speeds used in its calculation of PD and LGD by agreeing the underlying data to internal sources.

- We evaluated the completeness and accuracy of data and assessed assumptions used by management in determining the application of a minimum LGD floor in the calculation of LGD by agreeing the underlying data to internal and external sources.

- We tested the completeness and accuracy of data used by management in determining the qualitative factor adjustments to the quantitative model by agreeing the underlying data to appropriate internal and external sources.

- We evaluated management’s determination of the magnitude and extent of qualitative factors applied to the model for reasonableness in relation to the underlying data tested.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ RSM US LLP

We have served as the Company’s auditor since 2017.

We served as the Company’s auditor from 2017 to 2025.

Hartford, Connecticut

April 15, 2025

2025 FORM 10-K 41

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data) 2024 2023

(In thousands) 2025 2024

Cash and due from banks:

16 unchanged sentences

Other real estate owned — 2,843

Deferred tax asset — 24,134

Deferred tax asset, net — —

Core deposit intangible, net 109 156

12 unchanged sentences

Total liabilities 993,160 1,008,027

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 December 31, 2024:

4,065,593 shares issued;

3,991,852 shares outstanding;

As of December 31, 2023:

4,049,814 shares issued;

3,976,073 shares outstanding;

106,854 106,670

Common stock, $ 0.01 par value;

authorized 200,000,000 2025 issued shares 115,070,413 ;

outstanding shares 114,996,672 ;

2024 issued shares 4,065,593 ;

outstanding shares 3,991,852

Additional paid-in capital 206,446 107,992

Accumulated deficit ( 99,619 ) ( 86,908 )

Accumulated other comprehensive loss ( 12,119 ) ( 15,681 )

Treasury stock ( 1,179 ) ( 1,179 )

Total shareholders' equity 94,680 4,265

1 unchanged sentence

See Accompanying Notes to Consolidated Financial Statements.

2025 FORM 10-K 42

PATRIOT NATIONAL BANCORP, INC.

22 unchanged sentences

Deposit fees and service charges 1,524 536 285

Gains on sales of loans 440 169 1,461

(Loss) gain on sales of loans ( 2,230 ) 440 169

Rental income 323 302 395

(Loss) gain on sale of investment securities, net — ( 334 ) 24

Digital Payments income 5,109 2,294 683

Digital payment fee income 9,858 5,109 2,294

Other income 468 1,684 2,144

20 unchanged sentences

See Accompanying Notes to Consolidated Financial Statements.

2025 FORM 10-K 43

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands) Year Ended December 31,

2024 2023 2022

Year Ended December 31,

(In thousands) 2025 2024 2023

Net (loss) income $ ( 12,710 ) $ ( 39,882 ) $ ( 4,179 )

4 unchanged sentences

Income tax (expense) benefit — ( 1,034 ) 168

Unrealized (loss) gain on securities, net of tax ( 420 ) 384 ( 14,008 )

Total other comprehensive (loss) income ( 420 ) 384 ( 14,008 )

Other comprehensive income, net of tax 3,562 ( 420 ) 384

Comprehensive loss $ ( 9,148 ) $ ( 40,302 ) $ ( 3,795 )

See Accompanying Notes to Consolidated Financial Statements.

2025 FORM 10-K 44

PATRIOT NATIONAL BANCORP, INC.

3 unchanged sentences

Shares Common

Stock Accumulated

Deficit Accumulated

Stock Additional Paid-in Capital Accumulated

Deficit Treasury Stock Accumulated

Comprehensive

(Loss) Income Total

Balance at January 1, 2023 4,038,927 $ 40 $ 107,704 $ ( 31,337 ) $ ( 1,179 ) $ ( 15,645 ) $ 59,583

Comprehensive loss:

Net income — — 6,161 — 6,161

Unrealized holding loss on available-for-sale securities, net of tax — — — ( 14,008 ) ( 14,008 )

Total comprehensive income (loss) — — 6,161 ( 14,008 ) ( 7,847 )

Transition adjustment — — — ( 11,510 ) — — ( 11,510 )

Comprehensive (loss) income:

Net loss — — — ( 4,179 ) — — ( 4,179 )

Unrealized holding gain on AFS securities, net of tax — — — — — 384 384

Total comprehensive loss — — — ( 4,179 ) — 384 ( 3,795 )

Share-based compensation expense — — 105 — — — 105

1 unchanged sentence

Balance at December 31, 2023 4,049,814 $ 40 $ 107,809 $ ( 47,026 ) $ ( 1,179 ) $ ( 15,261 ) $ 44,383

Transition adjustment related to adoption of ASC326, net of tax — — ( 11,510 ) — ( 11,510 )

Comprehensive (loss) income:

Net loss — — — ( 39,882 ) — — ( 39,882 )

Unrealized holding gain on available-for-sale securities, net of tax — — — 384 384

Total comprehensive (loss) income — — ( 4,179 ) 384 ( 3,795 )

Unrealized holding loss on AFS securities, net of tax — — — — — ( 420 ) ( 420 )

Total comprehensive loss — — — ( 39,882 ) — ( 420 ) ( 40,302 )

Share-based compensation expense — — 184 — — — 184

3 unchanged sentences

Net loss — — — ( 12,710 ) — — ( 12,710 )

Unrealized holding loss on available-for-sale securities, net of tax — — — ( 420 ) ( 420 )

Total comprehensive loss — — ( 39,882 ) ( 420 ) ( 40,302 )

Unrealized holding gain on available-for-sale securities, net of tax — — — — — 3,562 3,562

Total comprehensive gain (loss) — — — ( 12,710 ) — 3,562 ( 9,148 )

Common stock issuance 110,994,062 1,110 — — — — 1,110

Capital raise — — 81,952 — — — 81,952

Preferred stock conversion — — 5,026 — — — 5,026

Debt conversion — — 4,643 — — — 4,643

Warrants — — 1,599 — — — 1,599

Share-based compensation expense — — 5,233 — — — 5,233

2 unchanged sentences

See Accompanying Notes to Consolidated Financial Statements.

2025 FORM 10-K 45

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) Year Ended December 31,

2024 2023 2022

Year Ended December 31,

(In thousands) 2025 2024 2023

Cash Flows from Operating Activities:

17 unchanged sentences

Gains on sale of loans held for sale, net 2,230 ( 440 ) ( 169 )

Net gain on sale and write-down of other real estate owned 77 — —

Changes in assets and liabilities:

7 unchanged sentences

Purchases of available-for-sale securities ( 145,188 ) ( 2,319 ) ( 10,415 )

Redemptions of FRB stock 713 537 216

Redemptions (purchases) of FHLB stock 3,423 ( 328 ) 310

Proceeds from maturity of other investments 4,450 - -

(Purchases) redemptions of Federal Reserve Bank stock ( 1,584 ) 713 537

(Purchases) redemptions of Federal Home Loan Bank stock 100 3,423 ( 328 )

Origination of loans receivable — ( 48,936 ) ( 145,531 )

3 unchanged sentences

Proceeds from sale of premises and equipment 1 13 —

Proceeds from sale of other real estate owned 2,766 — —

Net cash provided by (used in) investing activities ( 20,524 ) 135,011 ( 27,176 )

6 unchanged sentences

Principal repayments of senior notes ( 2,884 ) — —

Proceeds from issuance of senior notes — — 12,000

Principal repayments of note payable ( 162 ) ( 214 ) ( 209 )

Increase in advances from borrowers for taxes and insurance ( 579 ) 308 278

Net cash (used in) provided by financing activities ( 41,620 ) 65,934 106,463

Net increase (decrease) in cash, cash equivalents and restricted cash 96,074 28,043 ( 8,552 )

Proceeds from preferred stock issuance 5,450 — —

Private Placement Costs for preferred stock ( 351 ) — —

Proceeds from common stock issuance 85,572 — —

2025 FORM 10-K 46

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In thousands) Year Ended December 31,

2024 2023 2022

Year Ended December 31,

(In thousands) 2025 2024 2023

Private Placement Costs for common stock ( 4,023 ) — —

Net cash (used in) provided by financing activities 79,212 ( 41,620 ) 65,934

Net increase (decrease) in cash, cash equivalents and restricted cash 44,518 96,074 28,043

Cash, cash equivalents and restricted cash at beginning of period 162,610 66,536 38,493

2 unchanged sentences

Cash paid for interest $ 29,317 $ 31,924 $ 29,631

Cash paid for income taxes, net $ 66 $ 3,536 $ 102

Cash paid (refund) for income taxes, net $ ( 16 ) $ 66 $ 3,536

Non-cash transactions:

Change in unrealized loss (gain) on available-for-sale securities, net of tax $ ( 3,562 ) $ 420 $ ( 384 )

Transfers of SBA loans held for sale to loans receivable $ 5,526 $ — $ 274

Transfers of loans held for sale to loans receivable $ 4,048 $ 5,526 $ —

Transfers of loans receivable to loans held for sale $ — $ ( 4,339 ) $ —

1 unchanged sentence

Capitalized servicing assets $ 48 $ 138 $ 85

Capitalized project costs $ 142 $ — $ —

Retained beneficial interest $ 518 $ — $ —

Operating lease right-of-use assets / liabilities $ 10 $ 177 $ 16

3 unchanged sentences

Decrease in premises and equipment recorded under other liabilities $ ( 35 ) $ — $ —

Senior debt conversion to common stock $ ( 9,705 ) $ — $ —

Subordinated debt conversion to common stock $ ( 2,000 ) $ — $ —

Accrued interest capitalized into principal $ 1,098 $ — $ —

Preferred Stock conversion to Common Stock $ 5,099 $ — $ —

Decrease in premises and equipment recorded under other liabilities $ — $ ( 65 ) $ —

Expected credit loss for loans - ASC 326 adoption $ — $ — $ 13,001

3 unchanged sentences

See Accompanying Notes to Consolidated Financial Statements.

2025 FORM 10-K 47

PATRIOT NATIONAL BANCORP, INC.

2 unchanged sentences

Nature of Operations and Summary of Significant Accounting Policies

Patriot National Bancorp, Inc.

(the "Company" or "PNBK"), a Connecticut corporation, is a bank holding company that was organized in 1999.

Patriot Bank, N.A.

(the "Bank") (collectively, “Patriot”) is a wholly owned subsidiary of the Company.

The accompanying audited Consolidated Financial Statements of Patriot National Bancorp, Inc.

(the “Holding Company” or “PNBK”) and its wholly-owned subsidiaries, Patriot Bank, N.A.

(the “Bank”), Patriot National Statutory Trust I and PinPat Acquisition Corporation (collectively, the “Company” or “Patriot”), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

The Bank is a nationally chartered commercial bank whose deposits are insured by the Federal Deposit Insurance Company (“FDIC”), which manages the Deposit Insurance Fund.

1 unchanged sentence

The Bank's customers are concentrated in Fairfield and New Haven Counties in Connecticut and Westchester County in New York.

On March 11, 2003, the Company formed Patriot National Statutory Trust I (the “Trust”) for the purpose of issuing trust preferred securities and investing the proceeds in subordinated debentures issued by the Company, and on March 26, 2003, the first series of trust preferred securities were issued.

In accordance with generally accepted accounting principles in the United States of America (“US GAAP”), the Trust is not included in the Company’s consolidated 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.

14 unchanged sentences

Patriot has not experienced any losses from such concentrations.

The Company maintains cash on deposit at other depository institutions as collateral for the Bank’s Digital Payments business, which is considered as restricted cash.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The Company maintains cash on deposit at other depository institutions as collateral for the Bank’s digital payments activities, which is considered as restricted cash.

Federal Reserve Bank and Federal Home Loan Bank stock

4 unchanged sentences

The stocks are non-marketable equity securities, and as such, are considered restricted securities that are carried at cost, and evaluated for impairment in accordance with relevant accounting guidance.

In accordance with this guidance, the stocks’ values are determined by the ultimate recoverability of the par value rather than by recognizing temporary declines.

In accordance with this guidance, the stocks’ values are determined by the ultimate

2025 FORM 10-K 48

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

recoverability of the par value rather than by recognizing temporary declines.

The determination of whether the par value will ultimately be recovered is influenced by criteria such as:

21 unchanged sentences

The Company excludes the accrued interest receivable balance from the amortized cost basis in measuring expected credit losses on debt securities and does not record an ACL on accrued interest receivable.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Securities transactions are recorded on the trade date.

Realized gains and losses on the sale of securities are determined using the specific identification method, recorded on the trade date, and reported in non-interest income for the period.

At December 31, 2024 and 2023, the Bank’s investment portfolio includes a $ 4.5 million investment in the Solomon Hess SBA Loan Fund (“SBA Fund”).

The Bank uses this investment to satisfy its Community Reinvestment Act lending requirements.

At December 31, 2024 and 2023, the investment in the SBA Fund is reported in the Consolidated Balance Sheets at cost, which management believes approximates fair value.

At December 31, 2025 and 2024, the Bank’s investment portfolio includes zero and $ 4.5 million investment in the Solomon Hess SBA Loan Fund (“SBA Fund”).

The Bank previously utilized this investment to satisfy its Community Reinvestment Act lending requirements.

At December 31, 2024, the investment in the SBA Fund is reported in the Consolidated Balance Sheets at cost, which management believes approximates fair value.

Loans receivable

Loans that Patriot has the intent and ability to hold until maturity or for the foreseeable future generally are reported at their outstanding unpaid principal balances adjusted for deferred costs, an allowance for credit losses, if any, and any unamortized discount, premium and deferred fees.

2025 FORM 10-K 49

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Interest income is accrued based on unpaid principal balances.

24 unchanged sentences

Such agencies may require the Company to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Credit losses are estimated on the amortized cost basis of loans, which includes the principal balance outstanding, purchase discounts and premiums and deferred loan fees and costs.

1 unchanged sentence

The Company evaluates loans with similar risk characteristics in pools using a probability of default/loss given default ("PD/LGD") method.

Unlike the previous allowance for loan losses approach, which applied historical loss rates to similar loan pools, the current expected credit loss ("CECL") methodology forecasts the probability of default, loss given default, and exposure at default for loans in a given pool over their remaining life, thereby deriving an ACL capable of absorbing estimated losses over the remaining life of the portfolio.

Under this current expected credit loss ("CECL") methodology, the Bank forecasts the probability of default, loss given default, and exposure at default for loans in a given pool over their remaining life, thereby deriving an ACL capable of absorbing estimated losses over the remaining life of the portfolio.

Under this framework, qualitative factors play a diminished role, with reserve rates influenced by change in real domestic Gross Domestic Product ("GDP"), State of Connecticut unemployment rate, New York Fed recession indicator, CoStar composite index, New York Case Schiller index, Coincident activity index, Michigan consumer activity index, S&P's BBB credit spreads, and the Company's loan delinquencies and charge off data.

An additional component of the allowance is determined by management based on a qualitative analysis of certain factors related to portfolio risks that are not incorporated in the calculated model.

The factors include lending practices, the ability and experience of the credit staff, the overall lending environment and external factors such as the regulatory environment and competition.

The factors include lending practices, the ability and

2025 FORM 10-K 50

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

experience of the credit staff, the overall lending environment and undiscovered financial information in select small loan portfolios.

In addition, a risk rating system is utilized to evaluate the collectively evaluated component of the ACL.

1 unchanged sentence

Risk ratings are assigned based upon the recommendation of the credit analyst and the originating loan officer.

The risk ratings are reviewed and confirmed by the loan committee of the Board of Directors (the “Loan Committee”).

The risk ratings are reviewed and confirmed by the Internal Asset Review Committee (“IARC”) and reported to the Enterprise Risk Committee of the Board of Directors..

Risk ratings are established at the initiation of transactions and are reviewed and changed, when necessary, during the life of the loan.

Loans assigned a risk rating of six or above are monitored more closely by the credit administration officers and the Loan Committee.

In the underwriting of loans secured by real property, property appraisals are required to be performed by independent licensed appraisers that have been approved by Patriot’s Board of Directors.

Loans assigned a risk rating of six or above are monitored more closely by the credit administration officers and IARC.

In the underwriting of loans secured by real property, property appraisals are required to be performed by independent licensed appraisers that are included in a panel whose selection criteria have been approved by Patriot’s Board of Directors.

Appraisals are subject to review by independent third parties hired by Patriot.

10 unchanged sentences

The Company's credit officers meet at least quarterly to discuss and review the conditions and risks associated with individual problem loans.

Internal Asset Review Committee meets at least quarterly to discuss and review the conditions and risks associated with individual problem loans.

While the Company uses the best information available to evaluate the ACL, future adjustments to the ACL may be necessary if conditions differ or substantially change from the information used in making the evaluation.

In addition, as an integral part of its regulatory examination process, the OCC will periodically review the ACL.

The OCC may require Patriot to adjust the ACL based on its analysis of information available at the time of its examination.

Loan Modifications

3 unchanged sentences

The Company adopted ASU 2022-02 effective January 1, 2023 and the impact was immaterial.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Accrued Interest Receivable

6 unchanged sentences

• Not measuring an allowance for credit losses for accrued interest receivable due to the Company’s policy of fully reserving uncollectible accrued interest receivable balances in a timely manner, as described above.

2025 FORM 10-K 51

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

ACL for Unfunded Commitments

9 unchanged sentences

Patriot originates loans to customers under the SBA program, historically providing for SBA guarantees of 75 % of the principal balance of each loan.

Due to the pandemic, in December 2020, the SBA temporarily increased the guaranteed percentage to 90% during one of the rounds of stimulus.

During the pandemic, in December 2020, the SBA temporarily increased the guaranteed percentage to 90 % during one of the rounds of stimulus.

As of October 1, 2021, the guaranteed percentage reverted back to 75 % of the loan.

11 unchanged sentences

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.

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

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Servicing Assets

11 unchanged sentences

Gains or losses are included in non-interest expenses upon disposal.

2025 FORM 10-K 52

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Write-downs of foreclosed properties that are required upon transfer to OREO are charged to the ACL.

8 unchanged sentences

Lease Accounting

The Company adopted FASB ASU No.

2016-02, “Leases (Topic 842)” (“ASU 2016-02”), including the adoption of the practical expedients, effective January 1, 2019.

Leases (Topic 842) establishes a right of use model that requires a lessee to record a right of use (“ROU”) asset and a lease liability for all leases with terms longer than 12 months.

The Company enters into operating leases in the normal course of business primarily for several of its branch and parking locations, and one equipment lease.

The Company accounts for leases under ASC Topic 842, Leases.

The Company enters into operating leases in the normal course of business primarily for several of its branch, office and parking locations, and one equipment lease.

Lease liabilities are recognized based on the present value of future lease payments over the lease term, and corresponding right-of-use (“ROU”) assets are recognized based on the lease liability, adjusted for prepaid lease payments, lease incentives received, and initial direct costs, as applicable.

The Company's lease agreements include options to renew at the Company's discretion.

9 unchanged sentences

It also requires use of a discount rate that reflects the current return requirements of the market in relation to present risk-free interest rates, required equity market premiums, peer volatility indicators, and company-specific risk indicators.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

CDI is amortized on straight-line basis over a 10 year period because that is managements’ estimate of the period Patriot will benefit from Prime Bank’s deposit base comprised of funds associated with long-term customer relationships.

CDI is evaluated for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, with any changes in estimated useful life accounted for prospectively over the revised remaining life.

The Company evaluates goodwill for impairment on an annual basis, or more often if events or circumstances indicate there may be impairment.

The annual impairment test is conducted annually as of October 31, or whenever certain triggering events occur or there are circumstances that would more likely than not reduce the fair value of the reporting unit below its carrying amount are identified.

Management estimates the fair value of the reporting unit by considering multiple valuation techniques, which include subjective assumptions about the future cash flows of the Company, assumptions within the capitalization rate, valuation multiples, and market data used.

The fair value of each reporting unit is compared to the carrying amount of such reporting unit in order to determine if impairment is indicated.

Derivatives are recognized at fair value and included in other assets and other liabilities in the accompanying Consolidated Balance Sheets.

6 unchanged sentences

These swaps qualify as 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.

2025 FORM 10-K 53

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The credit risk associated with derivatives executed with customers is similar as that involved in extending loans and is subject to normal credit policies.

12 unchanged sentences

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 as of September 30, 2024, we determined that a full valuation allowance was appropriate against the Company’s U.S.

federal and state deferred tax assets.

The Company maintains a full valuation allowance against its federal and state deferred tax assets as of December 31, 2025, we determined that a full valuation allowance was appropriate based on our assessment performed as of September 30, 2024.

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 if a full valuation allowance remains appropriate or if the allowance should be reduced.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Unrecognized tax benefits

10 unchanged sentences

Potential shares of common stock that may be issued by Patriot include any unvested restricted stock awards, stock options, and stock warrants and are determined using the treasury stock method.

2025 FORM 10-K 54

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Share-based compensation plan

11 unchanged sentences

Segment reporting

Patriot’s only business segment is Community Banking.

Patriot’s only business segment is Banking.

During the years ended December 31, 2025, 2024, and 2023, this segment represented all the revenues and income of Patriot.

2 unchanged sentences

Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The Financial Accounting Standards Board amended the segment reporting requirements to add disclosures of incremental segment expense categories.

2 unchanged sentences

Related Party Transactions

Directors and officers of the Company and their affiliates have been customers of and have had transactions with the Company, and it is expected that such people will continue to have such transactions in the future.

Management believes that all deposit accounts, loans, services and commitments comprising such transactions were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers who are not directors or officers.

In the opinion of management, the transactions with related parties did not involve more than normal risks of collectability, nor favored treatment or terms, nor present other unfavorable features.

In the ordinary course of business, the Company and the Bank enter into transactions with related parties, including directors, executive officers, their immediate family members, and entities over which such persons exercise control or significant influence.

Such transactions may include deposit accounts, extensions of credit, debt or equity transactions, and other banking or financial services.

Related party transactions are reviewed and approved in accordance with the Company’s governance processes and, where applicable, are conducted on terms substantially similar to those prevailing at the time for comparable transactions with non-related parties.

Related Party Transactions for further information.

7 unchanged sentences

Provided in these notes to the consolidated financial statements is a detailed summary of Patriot’s application of fair value measurements and the effect on the assets and liabilities presented in the consolidated financial statements.

2025 FORM 10-K 55

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Advertising Costs

5 unchanged sentences

Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our income statements as components of non-interest income are as follows:

• Service charges on deposit accounts and Digital Payments division activities - these represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue.

• Service charges on deposit accounts and digital payments activities - these represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue.

Revenue is recognized when our performance obligation is completed, which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer).

Payment for such performance obligations are generally received at the time the performance obligations are satisfied.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Non-interest income - Digital Payments Division

The Digital Payments Division ("DPD") provides solutions to our customers in the form of acceptance, processing and settlement of prepaid, debit, and charge card payments and accounts.

Non-interest income - Digital Payments

The Bank provides solutions to card program managers and Fintech counterparties in the form of acceptance, processing and settlement of prepaid, debit, and charge card payments and accounts.

Each of our customers, called Program Managers (“PMs”), signs a services agreement with the Bank with customized terms and fees.

9 unchanged sentences

The interchange rate may vary, as most transaction types have their own unique rate charged by the network at the time the purchase is completed.

2025 FORM 10-K 56

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Recently Adopted and Issued Accounting Standards

Accounting Standards Adopted in 2025

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 Company adopted this guidance effective December 31, 2024 on a retrospective basis.

The additional disclosures are included in Note 23 – Segment Information.

In December 2023, the FASB issued ASU 2023-09 to improve income tax disclosure requirements under ASC 740, Income Taxes.

The guidance requires entities to provide separate information about a reporting entity’s effective tax rate reconciliation and about income taxes paid.

The Company adopted ASU 2023-09 effective for the annual period beginning January 1, 2025, on a prospective basis.

While the standard will require additional disclosures related to the Company’s income taxes, we do not expect this ASU to have an impact on our financial statements.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

Based on management’s review, the OBBBA does not have a material impact on the financial statements of Patriot Bank as of the reporting date.

Management will continue to monitor future regulatory guidance or interpretations related to the legislation.

Accounting Standards Issued But Not Yet Adopted

9 unchanged sentences

The Company will continue to monitor for SEC action, and plan accordingly for adoption.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

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.

In March 2024, the FASB issued ASU No.

2024-01 Compensation—Stock Compensation (Topic 718):

Scope Applications of Profits Interests and Similar Awards .

ASU 2024-01 adds an example to Topic 718 which illustrates how to apply the scope guidance to determine whether profits interests and similar awards should be accounted for as share-based payment arrangements under Topic 718 or under other U.S.

ASU 2024-01 is effective for annual periods beginning after December 15, 2025, although early adoption is permitted.

Upon adoption, ASU 2024-01 is not expected to have an impact on the Company’s Consolidated Financial Statements.

ASU 2024-03 and ASU 2025 -01

In November 2024, the FASB issued ASU 2024-03:

1 unchanged sentence

Disaggregation of Income Statement Expenses .

This ASU requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements.

This ASU does not change the expense captions an entity presents on the face of the income statement.

ASU 2024-03 can be applied prospectively, and it is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption and retrospective applications are permitted.

We do not expect adoption of this standard to have a material impact on the Company’s Consolidated Financial Statements.

In January 2025, the FASB issued ASU 2025-01:

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date .

The amendments in ASU 2024-03 require public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items by breaking down certain expense line items into specified natural expense categories, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion.

The amendments in ASU 2024-03 are effective for annual reporting periods

2025 FORM 10-K 57

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The amendments in ASU 2024-03 can be applied on a prospective basis or retrospective basis and early adoption is permitted.

The amendments in ASU 2025-01 clarify the effective date of ASU 2024-03 stating that all public business entities are required to adopt the update in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

ASU 2025-01 does not change the effective date of ASU 2024-03 but was issued to provide clarity on the effective date for public business entities that do not have a calendar year-end.

The Company is currently evaluating the potential impact of the adoption of ASU 2024-03 and ASU 2025-01 on its disclosures.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326):

Purchased Loans.

The amendments require certain acquired loans that meet the definition of purchased seasoned loans to be accounted for using a gross-up approach that aligns the initial accounting for those loans more closely with the accounting for purchased credit-deteriorated assets.

The amendments are effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods, with early adoption permitted.

The Company has elected to early adopt ASU 2025-08 effective January 1, 2026.

The amendments will be applied prospectively to loans acquired on or after the adoption date.

Because the guidance applies prospectively, adoption did not affect the Company’s 2025 consolidated financial statements.

The Company is evaluating, or if known, expects, the effect of adoption on the accounting for acquired loans in future periods.

Restrictions on Cash and Due from Banks

4 unchanged sentences

Therefore, the Company was not required to have cash on hand or on deposit with the Federal Reserve Bank to meet regulatory reserve and clearing requirements as of December 31, 2025 and 2024.

The Company maintains restricted cash on deposit with another depository institution as collateral for the Bank’s Digital Payments business.

The collateral serves to protect a payment processor in the event of the Bank’s inability to fulfill its obligations regarding transactions processed through the payment processor on behalf of Digital Payments.

The Company maintains restricted cash on deposit with another depository institution as collateral for the Bank’s digital payments activities.

The collateral serves to protect a payment processor in the event of the Bank’s inability to fulfill its obligations regarding transactions processed through the payment processor.

The restricted cash was $ 20.7 million and $ 15.0 million as of December 31, 2025 and 2024, respectively.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Available-for-sale securities

2 unchanged sentences

December 31, 2025:

Government agency and mortgage-backed securities $ 75,689 $ — $ ( 15,466 ) $ 60,223

Government agency and MBS $ 217,228 $ 215 $ ( 13,375 ) $ 204,068

Corporate bonds 15,996 — ( 2,533 ) 13,463

3 unchanged sentences

December 31, 2024:

Government agency and mortgage-backed securities $ 80,500 $ — $ ( 14,829 ) $ 65,671

Government agency and MBS $ 75,689 $ — $ ( 15,466 ) $ 60,223

Corporate bonds 15,996 — ( 3,261 ) 12,735

1 unchanged sentence

SBA loan pools 4,562 — ( 989 ) 3,573

Municipal bonds 559 — ( 73 ) 486

$ 100,247 $ — $ ( 20,255 ) $ 79,992

2025 FORM 10-K 58

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The following table presents 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 December 31, 2025 and 2024:

2 unchanged sentences

December 31, 2025:

Government agency and mortgage-backed securities $ 4,170 $ ( 160 ) $ 56,053 $ ( 15,306 ) $ 60,223 $ ( 15,466 )

Government agency and MBS $ 124,222 $ ( 917 ) $ 60,222 $ ( 12,458 ) $ 184,443 $ ( 13,375 )

Corporate bonds — — 13,464 ( 2,533 ) 13,464 ( 2,533 )

3 unchanged sentences

December 31, 2024:

Government agency and mortgage-backed securities $ 9,984 $ ( 286 ) $ 55,687 $ ( 14,543 ) $ 65,671 $ ( 14,829 )

Government agency and MBS $ 4,170 $ ( 160 ) $ 56,053 $ ( 15,306 ) $ 60,223 $ ( 15,466 )

Corporate bonds — — 12,735 ( 3,261 ) 12,735 ( 3,261 )

1 unchanged sentence

SBA loan pools — — 3,573 ( 989 ) 3,573 ( 989 )

Municipal bonds — — 486 ( 73 ) 486 ( 73 )

$ 4,170 $ ( 160 ) $ 75,822 $ ( 20,095 ) $ 79,992 $ ( 20,255 )

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

As of December 31, 2024, all forty-four available-for-sale securities were in an unrealized loss position, with an aggregate depreciation of 20.2 % from amortized cost.

As of December 31, 2023, fifty of fifty available-for-sale securities had unrealized losses, with an aggregate depreciation of 19.0 % from amortized cost.

As of December 31, 2025, fifty-five of sixty available-for-sale securities were in an unrealized loss position, with an aggregate depreciation of 7.6 % from amortized cost.

As of December 31, 2024 all forty-four available-for-sale securities had unrealized losses, with an aggregate depreciation of 20.2 % from amortized cost.

As of December 31, 2025 and 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.

18 unchanged sentences

The securities were pledged to the FRB and FHLB.

2025 FORM 10-K 59

PATRIOT NATIONAL BANCORP, INC.

14 unchanged sentences

SBA loan pools — — 4,146 4,146 — — 3,394 3,394

Available-for-sale securities with stated maturity dates 3,000 16,996 4,562 24,558 2,610 13,586 3,573 19,769

Government agency and mortgage-backed securities — 5,172 70,517 75,689 — 4,134 56,089 60,223

AFS securities with stated maturity 3,000 16,996 4,146 24,142 2,807 14,408 3,394 20,609

Government agency and MBS — 5,134 212,094 217,228 — 4,372 199,696 204,068

$ 3,000 $ 22,130 $ 216,240 $ 241,370 $ 2,807 $ 18,780 $ 203,090 $ 224,677

3 unchanged sentences

SBA loan pools — — 4,562 4,562 — — 3,573 3,573

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

Government agency and mortgage-backed securities — 5,222 75,278 80,500 — 4,237 61,434 65,671

AFS securities with stated maturity 3,000 16,996 4,562 24,558 2,610 13,586 3,573 19,769

Government agency and MBS — 5,172 70,517 75,689 — 4,134 56,089 60,223

$ 3,000 $ 22,168 $ 75,079 $ 100,247 $ 2,610 $ 17,720 $ 59,662 $ 79,992

2025 FORM 10-K 60

PATRIOT NATIONAL BANCORP, INC.

14 unchanged sentences

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

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.

Existing Loan Portfolio

Patriot’s lending activities have historically been conducted primarily in the Tri-State areas of Connecticut, New York and New Jersey.

The Bank’s existing loan portfolio has consisted of commercial real estate (“CRE”) loans, commercial and industrial loans, residential real estate loans (primarily purchased), consumer loans, and a limited volume of construction loans.

Commercial and residential real estate loans are collateralized primarily by first or second mortgages on real estate.

The ability and willingness of borrowers to satisfy their loan obligations can be dependent to some degree on the regional economy and real estate market conditions.

Patriot maintains credit policies applicable to each lending activity and evaluates the creditworthiness of every borrower.

Unless mitigating factors exist, commercial real estate loans are generally limited to 75 % of the market value of the underlying collateral;

multifamily real estate loans are limited to 75 % to 80 % loan-to-value;

and construction loans (none currently outstanding) were limited to 75 % of “as-completed” appraised value.

Real estate is the primary form of collateral, although other collateral types include accounts receivable, inventory, marketable securities, time deposits and other business assets.

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.

CRE loans include both owner-occupied and non-owner-occupied properties.

Non-owner-occupied CRE repayment depends primarily on rents from leases to third party tenants, successful management, marketing and expense supervision necessary to maintain the property.

Repayment of these loans may be adversely affected by conditions in the real estate market or the general economy.

Owner-occupied CRE loans are utilized by a business for the purpose of providing the space needs for that business and the running of its operations.

Owner-occupied CRE depends on the borrower’s operating business cash flow.

Repayment of these loans may be adversely affected by conditions in the specific owner’s industry in addition to the general economy.

In underwriting CRE loans, Patriot evaluates both the prospective borrower’s ability to make timely payments on the loan, the value of the property(ies) securing the loans and the net operating income generated by such property(ies).

Repayment of such loans may be negatively impacted should the borrower default, the value of the property collateralizing the loan substantially declines, or there is deterioration 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.

Patriot did not purchase any commercial real estate loans in 2024 and 2023.

Owner-occupied CRE loans are subject to many of the same risks described below for

2025 FORM 10-K 61

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

Commercial and Industrial Loans, as repayment depends in part on the borrower’s cash flow, debt service coverage and management’s expertise

Patriot did not purchase any commercial real estate loans in 2025 and 2024.

Residential Real Estate Loans

Patriot’s residential real estate loan portfolio consists primarily of purchased residential loans.

The Bank’s residential real estate portfolio consists largely of purchased 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 2024, Patriot purchased $ 187,000 residential real estate loans.

In 2023, Patriot did not purchase any residential real estate loans.

In 2024, the Bank reentered the residential mortgage business, began originating mortgage loans through its mortgage origination unit, Residential Mortgage Division, based in Jacksonville, Florida.

These mortgage loans are typically sold to third parties and classified as Loans Held for Sale.

For further details, refer to disclosures in Note 5 - Loans Held for Sale.

Patriot purchased residential real estate loans of $ 35 million and $ 187 thousand and sold $ 29 million and zero for the years ended December 31, 2025 and 2024, respectively.

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 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 – and in some cases to finance the CRE and physical buildings used by companies to carry out their business activities.

These loans are generally secured by business assets but are also occasionally offered on an unsecured basis.

1 unchanged sentence

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 portfolios totaled $ 5.7 million and $ 5.7 million at December 31, 2024 and 2023, respectively.

The syndicated and leveraged loans are included in the commercial and industrial loan classification and are primarily comprised of loan transactions led by major financial institutions and regional banks, which are the Agent Bank or Lead Arranger, and are referred to as syndicated loans or "Shared National Credits (SNC)".

SNC loans were determined to be complementary to the Bank’s existing commercial and industrial loan portfolio and product offerings.

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.

Patriot’s syndicated loan portfolio consisted of one loan of $ 5.7 million at December 31, 2024.

During 2025, the loan was repaid in full.

The syndicated loan was included in the commercial and industrial loan classification and is led by major financial institution as Lead Arranger, and referred to as a "Shared National Credit (“SNC”).

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.

Patriot offers individual consumers various forms of credit including overdraft protection, and reserve lines of credit.

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.

Probability of default is assessed based on FICO scores, debt to income ratios, historical loss rates other common consumer loan metrics.

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 purchased under this program totaled zero and $ 15.4 million for the year ended December 31, 2024 and 2023, respectively.

Loans purchased under this program totaled zero for the year ended December 31, 2025 and 2024.

In 2025, the bank sold a portfolio of 1.092 purchased unsecured consumer loans with unpaid principal balances of $ 9 million.

Loans outstanding under this program totaled $ 0.7 million and $ 20.7 million as of December 31, 2025 and 2024, respectively.

1 unchanged sentence

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.

Patriot purchased home equity line of credit loans (“HELOC”) of nil and $ 5.7 million for the year ended December 31, 2024 and 2023, respectively.

Patriot purchased home equity line of credit loans (“HELOC”) of zero for the years ended December 31, 2025 and 2024.

The Bank sold HELOCS of $ 15.9 million and zero for the years ended December 31, 2025 and 2024, respectively.

2025 FORM 10-K 62

PATRIOT NATIONAL BANCORP, INC.

2 unchanged sentences

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 December 31, 2024 and 2023 totaled $ 3.8 million and $ 4.3 million, respectively.

The Bank currently does not offer a construction lending product.

The construction loans outstanding at December 31, 2025 and 2024 totaled zero and $ 3.8 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 CRE 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.

The Bank currently does not offer a construction to permanent lending product.

The construction to permanent loans outstanding at December 31, 2025 and 2024 totaled zero and $ 2.4 million, respectively.

Patriot originated SBA 7(a) loans, on which the SBA has historically provided guarantees of 75 % of the principal balance.

From December 27, 2020, to September 31, 2021, the SBA temporarily increased the guarantees to 90 %.

On October 1, 2021, the guaranty percentage automatically reverted to its previous level of 75 % .

However, during the pandemic in 2020, 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.

3 unchanged sentences

SBA loans held for investment are included in the commercial real estate loans and commercial and industrial loan classifications, which totaled $ 18.4 million and $ 29.9 million at December 31, 2025 and 2024, respectively.

In the second quarter of 2025, the Bank made the decision to voluntarily suspend its status as a participant in SBA’s Preferred Lender Program (“PLP”).

This decision was made in response to the Bank’s desire to temporarily exit the SBA lending business and the Bank’s Formal Agreement with the Office of the Comptroller of the Currency (“OCC”).

It is possible that the Bank will determine in the future that it is prudent to petition to the SBA for reinstatement in the PLP.

Small Business Administration Paycheck Protection Program

Under the Paycheck Protection Program of the CARES Act, small business loans were authorized for to pay payroll and group health costs, salaries and commissions, mortgage and rent payments, utilities, and interest on other debt.

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 $ 129,000 and $ 133,000 as of December 31, 2024 and 2023, respectively, which are included in the commercial and industrial loan classifications.

Paycheck Protection Program loans totaled $ 125 thousand and $ 129 thousand as of December 31, 2025 and 2024, respectively, which are included in the commercial and industrial loan classifications.

New Lending Programs

During the third quarter of 2025, the Bank re-started its loan origination activities and implemented three targeted lending initiatives designed to prudently diversify revenue and strengthen relationship banking among high-quality entrepreneurial borrowers.

These programs are fully aligned with the Bank’s credit risk appetite, underwriting standards, and its overall strategic plan.

At this time, no other commercial loan products are offered to our customers.

As the successful implementation of these new lending programs progresses and matures, the Bank continues to evaluate additional commercial lending products consistent with its strategic plan and risk appetite.

High Net Worth Line of Credit Program

The Bank introduced a tailored unsecured line of credit product for qualifying high net worth clients.

The facility provides short-term liquidity for qualified borrowers with substantial financial strength and established deposit or relationship history with the Bank.

The proceeds of the lines of credit are utilized for business and investment purposes.

Although contractually unsecured for strong credits, the Bank may require a pledge of eligible assets—including cash, marketable securities, or other high-value property—on an “abundance-of-caution” basis.

Lines typically range from $ 250 thousand to $ 5 million, with maturities of less than one year , and are renewable annually subject to the Bank’s approval.

The loans have prime-based interest rates with market origination fees.

2025 FORM 10-K 63

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

Rediscount Line of Credit Program

The Bank launched a rediscount lending facility product that provides secured, revolving lines of credit to non-bank loan originators and private credit providers.

Borrowers pledge single loans or pools of performing loans and leases.

Typically, commercial real estate, residential real estate or equipment loans are provided as collateral, which may be replenished as the underlying loans pay down.

Typical commitments range from $ 1 million to $ 15 million, with terms of 12 to 36 months and pricing on a floating rate basis.

The facilities are full-recourse to the borrower and are governed by defined borrowing-base, collateral-performance, and reporting covenants.

Commercial Real Estate Program

The Bank also established a CRE-lending program to finance properties for depositor and relationship clients.

Loans generally range from $ 1 million to $ 15 million, are secured by first mortgages, and are underwritten to maximum loan-to-value ratios and appropriate debt-service coverage metrics.

Interest rates are typically floating rates with terms of 12 to 60 months, and may include extension options.

All three programs are subject to the Bank’s existing credit policies, together with new, enhanced standards and underwriting guidelines.

The new loan programs comply with the Bank’s concentration limits, and risk-management controls, including heightened portfolio management routines, borrower and guarantor liquidity testing, and ongoing regulatory reporting.

Early production volumes as of December 31, 2025 remain modest as the Bank completes pilot transactions and validates credit performance metrics.

Each of the new loan products includes minimum deposit requirements designed to strengthen client relationships and promote additional business activities such as treasury management and card services.

Allowance for Credit Losses

17 unchanged sentences

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.

1 unchanged sentence

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.

Repayment of these loans may be adversely affected by conditions in

2025 FORM 10-K 64

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

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.

4 unchanged sentences

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.

Consumer loans 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.

3 unchanged sentences

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 $ 182,000 and $ 271,000 as of December 31, 2024 and 2023.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The allowance for credit losses on unfunded commitments was $ 80 thousand and $ 182 thousand as of December 31, 2025 and 2024.

The following tables summarize the activity in the allowance for credit losses, allocated to segments of the loan portfolio, for each year in the three-year period ended December 31, 2025:

9 unchanged sentences

Recoveries — 2 117 828 — — — 947

Provisions (credits) 10,041 10 691 1,914 1 ( 113 ) — 12,544 (1)

Provisions (credits)(a) 953 30 2,338 ( 1,752 ) ( 5 ) 43 — 1,607

December 31, 2025 $ 2,416 $ 628 $ 3,403 $ 392 $ — $ — $ — $ 6,839

2 unchanged sentences

December 31, 2023 $ 6,089 $ 607 $ 1,269 $ 7,843 $ 4 $ 113 $ — $ 15,925

Impact of ASC 326 Adoption 1,626 189 219 10,977 ( 4 ) 29 ( 35 ) 13,001

Charge-offs ( 13,889 ) ( 21 ) ( 1,252 ) ( 7,431 ) — — — ( 22,593 )

Recoveries — — 369 1,060 — — — 1,429

Provisions 3,843 254 540 5,058 134 74 — 9,903 (2)

Provisions (credits)(a) 10,041 10 691 1,914 1 ( 113 ) — 12,544

December 31, 2024 $ 2,241 $ 596 $ 1,077 $ 3,386 $ 5 $ — $ — $ 7,305

As of and for the year ended December 31, 2023

Allowance for loan and lease losses:

Allowance for credit losses:

December 31, 2022 $ 6,966 $ 665 $ 1,403 $ 1,207 $ 24 $ 10 $ 35 $ 10,310

ASC 326 Adoption 1,626 189 219 10,977 ( 4 ) 29 ( 35 ) 13,001

Charge-offs ( 6,346 ) ( 515 ) ( 927 ) ( 10,479 ) ( 150 ) — — ( 18,417 )

Recoveries — 14 34 1,080 — — — 1,128

Provisions (credits) 1,749 ( 1,039 ) ( 1,128 ) 2,523 14 ( 31 ) ( 203 ) 1,885 (3)

Provisions (credits)(a) 3,843 254 540 5,058 134 74 — 9,903

December 31, 2023 $ 6,089 $ 607 $ 1,269 $ 7,843 $ 4 $ 113 $ — $ 15,925

(1) The provision on credit losses included in the above table does not include the credit on unfunded loan commitments of $ 89,000 for the year ended December 31, 2024.

(2) The provision on credit losses included in the above table does not include the credit on unfunded loan commitments of $ 2.5 million for the year ended December 31, 2023.

(3) No provision on unfunded loan commitments is included in the provision on allowance for loan and lease losses for the year ended December 31, 2022.

(a) The provision on credit losses included in the above table does not include the credit on unfunded loan commitments of $ 102 thousand,$ 89 thousand, and $ 2.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.

2025 FORM 10-K 65

PATRIOT NATIONAL BANCORP, INC.

36 unchanged sentences

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.

In addition, the risk ratings on all commercial loans over $250 thousand 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 expert to perform a semi-annual analysis of the results of its risk rating process.

1 unchanged sentence

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.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

When assigning a risk rating to a loan, management utilizes the Bank’s internal eleven-point risk rating system.

3 unchanged sentences

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.

2025 FORM 10-K 66

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

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.

7 unchanged sentences

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

2025 FORM 10-K 67

PATRIOT NATIONAL BANCORP, INC.

3 unchanged sentences

The following tables summarize loan amortized cost by vintage, credit quality indicator and class of loans based on year of origination as of December 31, 2025:

(In thousands) Term of Loans by Origination

(In thousands) Rating of Loans by Origination Year

As of December 31, 2025:

5 unchanged sentences

Substandard — — 117 4,258 4,479 4,742 — 13,596

— 107,702 136,834 96,890 2,318 75,745 — 419,489

Total 41,492 — 79,031 93,796 77,347 54,524 — 346,191

Current period gross charge-offs — — — 547 232 — — 778

3 unchanged sentences

Substandard — — — — — 57 — 57

372 — 1,218 2,811 10,599 76,423 792 92,215

Total 1,234 3,119 — 5,283 20,726 48,178 1,128 79,667

Current period gross charge-offs — — — — — — — —

3 unchanged sentences

Substandard — — 559 381 842 807 4,959 7,547

843 2,996 14,111 20,775 6,508 7,471 76,904 129,608

Total 14,710 726 3,833 11,410 18,457 6,422 91,266 146,825

Current period gross charge-offs — — — 47 72 11 — 129

2 unchanged sentences

Substandard — — 9 7 — 144 252 413

290 2,586 16,300 1,859 — 15,305 23,633 59,973

Total 192 262 289 415 7 13,141 5,570 19,876

Current period gross charge-offs — — 93 1,744 232 — — 2,069

Construction:

Pass — — — 3,830 — — — 3,830

— — — 3,830 — — — 3,830

Construction to Permanent - CRE:

Substandard — — — 2,357 — — — 2,357

— — — 2,357 — — — 2,357

Total loans $ 57,628 $ 4,107 $ 83,154 $ 110,905 $ 116,538 $ 122,265 $ 97,964 $ 592,562

Total Current period gross charge-offs $ — $ 313 $ 5,997 $ 635 $ — $ 15,648 $ — $ 22,593

Total Current period gross charge-offs(a) $ — $ — $ 93 $ 2,337 $ 578 $ 11 $ — $ 3,020

Loans receivable, gross:

3 unchanged sentences

Total Loans receivable, gross $ 57,628 $ 4,107 $ 83,154 $ 110,905 $ 116,538 $ 122,265 $ 97,964 $ 592,562

Total Current period gross charge-offs $ — $ 313 $ 5,997 $ 635 $ — $ 15,648 $ — $ 22,593

Total Current period gross charge-offs(a) $ — $ — $ 93 $ 2,337 $ 578 $ 11 $ — $ 3,020

(a) Total current period gross-charge offs includes $ 43 thousand related to Construction to Permanent - CRE loan with an origination year of 2021.

2025 FORM 10-K 68

PATRIOT NATIONAL BANCORP, INC.

2 unchanged sentences

The following tables summarize loan amortized cost by vintage, credit quality indicator and class of loans based on year of origination as of December 31, 2024:

(In thousands) Term of Loans by Origination

(In thousands) Rating of Loans by Origination Year

As of December 31, 2024:

9 unchanged sentences

Pass 372 — 1,218 2,811 9,546 74,937 792 89,676

Special mention — — — — 1,053 1,377 — 2,430

Substandard — — — — — 109 — 109

Total 372 — 1,218 2,811 10,599 76,423 792 92,215

13 unchanged sentences

Pass — — — 3,830 — — — 3,830

Substandard — — — — 454 — — 454

Total — — — 3,830 — — — 3,830

Current period gross charge-offs — — 150 — — — — 150

Construction to Permanent - CRE:

Special mention — — 2,464 — — — — 2,464

Substandard — — — 2,357 — — — 2,357

Total — — — 2,357 — — — 2,357

5 unchanged sentences

Substandard — 1,429 7,570 11,829 5,902 6,054 305 33,089

Loans receivable, gross $ 114,068 $ 199,200 $ 149,244 $ 23,262 $ 73,662 $ 161,255 $ 128,168 $ 848,859

Total Loans receivable, gross $ 1,505 $ 113,284 $ 168,463 $ 128,522 $ 19,425 $ 174,944 $ 101,329 $ 707,472

Total Current period gross charge-offs $ — $ 313 $ 5,997 $ 635 $ — $ 15,648 $ — $ 22,593

2025 FORM 10-K 69

PATRIOT NATIONAL BANCORP, INC.

11 unchanged sentences

Substandard — 293 — 293 2,595 2,888 10,708 13,596

— — — — 400,155 400,155 19,334 419,489

Total — 293 — 293 332,197 332,489 13,701 346,191

Residential Real Estate:

2 unchanged sentences

Substandard — — — — — — 57 57

838 — — 838 91,268 92,106 109 92,215

Total — — — — 79,612 79,612 57 79,669

Commercial and Industrial:

2 unchanged sentences

Substandard — 468 — 468 157 624 6,927 7,551

1,457 — — 1,457 124,810 126,267 3,341 129,608

Total 1,600 468 — 2,068 134,575 136,643 10,182 146,825

Consumer and Other:

1 unchanged sentence

Substandard — — — — — — 413 413

602 687 — 1,289 57,954 59,243 730 59,973

Construction:

Pass — — — — 3,830 3,830 — 3,830

— — — — 3,830 3,830 — 3,830

Construction to Permanent - CRE:

Substandard — — — — — — 2,357 2,357

— — — — — — 2,357 2,357

Total 235 — — 235 19,229 19,464 413 19,877

Total loans $ 1,835 $ 760 $ — $ 2,595 $ 565,613 $ 568,208 $ 24,353 $ 592,562

Loans receivable, gross:

3 unchanged sentences

Loans receivable, gross $ 1,835 $ 760 $ — $ 2,595 $ 565,613 $ 568,208 $ 24,353 $ 592,562

2025 FORM 10-K 70

PATRIOT NATIONAL BANCORP, INC.

10 unchanged sentences

Substandard — — — — 8,732 8,732 13,363 22,095

2,274 231 — 2,505 456,813 459,318 12,775 472,093

Total — — — — 400,155 400,155 19,334 419,489

Residential Real Estate:

Pass 838 — — 838 88,838 89,676 — 89,676

1,439 — — 1,439 105,344 106,783 — 106,783

Special mention — — — — 2,430 2,430 — 2,430

Substandard — — — — — — 109 109

Total 838 — — 838 91,268 92,106 109 92,215

Commercial and Industrial:

2 unchanged sentences

Substandard 350 — — 350 6,456 6,806 992 7,798

946 358 — 1,304 158,340 159,644 3,921 163,565

Total 1,457 — — 1,457 124,810 126,267 3,341 129,608

Consumer and Other:

1 unchanged sentence

Substandard — — — — — — 730 730

1,327 1,015 341 2,683 96,028 98,711 977 99,688

Total 602 687 — 1,289 57,954 59,243 730 59,973

Construction:

Pass — — — — 3,830 3,830 — 3,830

Substandard — — — — — — 454 454

— — — — 3,812 3,812 454 4,266

Total — — — — 3,830 3,830 — 3,830

Construction to Permanent - CRE:

Special mention — — — — 2,464 2,464 — 2,464

— — — — 2,464 2,464 — 2,464

Substandard — — — — — — 2,357 2,357

Total — — — — — — 2,357 2,357

Total loans $ 2,897 $ 687 $ — $ 3,584 $ 678,017 $ 681,601 $ 25,871 $ 707,472

Loans receivable, gross:

3 unchanged sentences

Loans receivable, gross $ 2,897 $ 687 $ — $ 3,584 $ 678,017 $ 681,601 $ 25,871 $ 707,472

2025 FORM 10-K 71

PATRIOT NATIONAL BANCORP, INC.

2 unchanged sentences

The following tables summarize non-performing (i.e., non-accruing) loans by aging category and status, within the applicable loan portfolio segment as of December 31, 2025 and 2024:

(In thousands) Non-accruing Loans

Non-accruing Loans

(In thousands) 30 - 59

Past Due 60 - 89

7 unchanged sentences

Residential Real Estate:

Pass — — — — — —

Substandard — — 57 57 — 57

4 unchanged sentences

Substandard — — 397 397 16 413

Construction to permanent - CRE:

Substandard — — 2,357 2,357 — 2,357

Total non-accruing loans $ — $ 2,005 $ 22,332 $ 24,337 $ 16 $ 24,353

4 unchanged sentences

Substandard 974 — 7,947 8,921 4,442 13,363

Residential Real Estate:

Substandard — — 109 109 — 109

Commercial and Industrial:

3 unchanged sentences

Substandard — 6 724 730 — 730

Construction:

Construction to permanent - CRE:

Substandard — — 2,357 2,357 — 2,357

8 unchanged sentences

The Bank considers loans under $100,000 and consumer installment loans to be pools of smaller homogeneous loan balances, which are collectively evaluated for credit losses.

2025 FORM 10-K 72

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

If non-accrual loans had been performing in accordance with the original contractual terms, additional interest income (net of cash collected) of approximately $ 3.1 million, $ 938,000 , and $ 372,000 would have been recognized in income for the years ended December 31, 2024, 2023, and 2022, respectively.

Interest income collected and recognized on non-accruing loans for the year ended December 31, 2024, 2023 and 2022 was $ 1.3 million, $ 255,000 and $ 329,000 , respectively.

If non-accrual loans had been performing in accordance with the original contractual terms, additional interest income (net of cash collected) of approximately $ 3.3 million, $ 3.1 million, and $ 0.9 million would have been recognized in income for the years ended December 31, 2025, 2024, and 2023, respectively.

Interest income collected and recognized on non-accruing loans for the year ended December 31, 2025, 2024, and 2023 was $ 270 thousand, $ 1.3 million, and $ 255 thousand, respectively.

Individually Evaluated Loans

The following table reflects information about the individually evaluated loans by class as of December 31, 2025 and 2024:

(In thousands) December 31, 2024 December 31, 2023

December 31, 2025 December 31, 2024

(In thousands) Recorded

Investment Principal

3 unchanged sentences

Commercial Real Estate $ 7,240 $ 22,657 $ — $ 18,361 $ 34,224 $ —

Residential Real Estate 57 58 — — — —

Commercial and Industrial 291 288 — 1,831 2,251 —

Construction — — — 454 461 —

Construction to permanent - CRE — — — 2,357 2,476 —

22,549 38,951 — 5,558 9,239 —

Total 7,588 23,003 — 22,549 38,951 —

With a related allowance recorded:

1 unchanged sentence

Commercial and Industrial 4,906 4,905 2,100 1,492 1,810 60

2,466 2,779 463 11,575 13,296 4,205

Consumer and Other 1 1 1 — — —

Total 4,907 4,906 2,101 2,466 2,779 463

Individually evaluated loans, Total:

Commercial Real Estate $ 7,240 $ 22,657 $ — $ 19,335 $ 35,193 $ 403

Residential Real Estate 57 58 — — — —

Commercial and Industrial 5,197 5,193 2,100 3,323 4,061 60

Construction — — — 454 461 —

Consumer and Other 1 1 1 — — —

Construction to permanent - CRE — — — 2,357 2,476 —

Total $ 12,495 $ 27,909 $ 2,101 $ 25,015 $ 41,730 $ 463

2025 FORM 10-K 73

PATRIOT NATIONAL BANCORP, INC.

3 unchanged sentences

Year Ended December 31,

(In thousands) 2024 2023 2022

Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized

2025 2024 2023

(In thousands) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized

With no related allowance recorded:

5 unchanged sentences

Construction to permanent - CRE — — 2,410 — — —

28,750 1,171 5,189 220 9,839 208

Total 7,588 14 28,750 1,171 5,189 220

With a related allowance recorded:

2 unchanged sentences

Commercial and Industrial 4,905 256 957 38 3,359 214

1,945 81 17,472 910 11,762 147

Consumer and Other 1 — — — — —

Total 4,906 256 1,945 81 17,472 910

Individually evaluated loans, Total:

7 unchanged sentences

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.

The independently determined appraised values were first reduced by a 8.0 % discount to reflect the Bank’s experience selling Other Real Estate Owned (“OREO”) properties.

Performing loans are monitored to determine when, if at all, additional credit loss reserves may be required for a loss of underlying collateral value.

2 unchanged sentences

Once a borrower is in default, Patriot is under no obligation to advance additional funds on unused commitments.

2025 FORM 10-K 74

PATRIOT NATIONAL BANCORP, INC.

8 unchanged sentences

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 year ended December 31, 2024, 2023 and 2022, the Company had no modified loans made to borrowers experiencing financial difficulty.

During the years ended December 31, 2025, 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 years ended December 31, 2025, 2024, and 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

3 unchanged sentences

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.

There were no SBA loans held for sale at December 31, 2024.

As of December 31, 2023, SBA loans held for sale totaled $ 9.9 million, consisting of $ 3.5 million of SBA commercial and industrial loans and $ 6.4 million SBA commercial real estate loans.

During 2024 and 2023, $ 5.5 million and zero SBA loans previously classified as held for sale were transferred to held for investment, respectively.

There were no SBA loans held for sale at December 31, 2025 and 2024.

During 2025 and 2024, zero and $ 5.5 million SBA loans previously classified as held for sale were transferred to held for investment, respectively.

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.

7 unchanged sentences

The total amount of such loans serviced, but owned by third party, amounted to approximately $ 32.1 million and $ 43.8 million at December 31, 2025 and 2024, respectively.

As of December 31, 2024 and 2023, the servicing asset has a carrying value of $ 739,000 and $ 857,000 , respectively, and fair value of $ 825,000 and $ 932,000 , respectively.

As of December 31, 2025 and 2024, the servicing asset has a carrying value of $ 589 thousand and $ 739 thousand, respectively, and fair value of $ 581 thousand and $ 825 thousand, respectively.

Income and fees collected for loan servicing are credited to non-interest income when earned, net of amortization on the related servicing assets.

The servicing asset is included in other assets on the Consolidated Balance Sheets.

In the second quarter of 2025, the Bank made the decision to voluntarily suspend its status as a participant in SBA’s PLP.

This decision was made in response to the Bank’s desire to temporarily exit the SBA lending business and the Bank’s Formal Agreement.

It is possible that the Bank will determine in the future that it is prudent to petition to the SBA for reinstatement in the PLP.

2025 FORM 10-K 75

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The following table presents an analysis of the activity in the SBA servicing assets for the years ended December 31, 2025, 2024, and 2023:

(In thousands) Year Ended December 31,

2024 2023 2022

Year Ended December 31,

(In thousands) 2025 2024 2023

Beginning balance $ 739 $ 857 $ 886

3 unchanged sentences

Ending balance $ 589 $ 739 $ 857

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Loans held for sale - Digital Payments Loans

Patriot's Digital Payments Division has entered into a Program Management Agreement with a Buyer.

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

Loans held for sale - Credit Card Receivables

Patriot has entered into program management arrangements under which the Bank originates commercial credit card receivables for certain card programs.

The applicable card program manager markets the program and purchases the related receivables from the Bank shortly after origination.

These receivables are classified as loans held for sale and are generally sold within three days of origination.

As of December 31, 2025 and 2024, the Bank had credit card loans held for sale totaling $ 24.5 million and $ 11.4 million, respectively.

The credit card loans are 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 the Bank.

1 unchanged sentence

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 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 for the year ended December 31, 2024.

No residential mortgage loans held for sale was recorded as of December 31, 2023.

In 2025, the Bank suspended the residential mortgage origination business.

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

As of December 31, 2025, the Company reported residential mortgage loans held for sale totaling zero .

During the years ended December 31, 2025 and 2024, $ 4.0 million and zero of residential mortgage loans previously classified as held for sale were transferred to held for investment, respectively.

For the year ended December 31, 2025, a total gain on sale of $ 79 thousand was recorded.

A servicing asset of $ 71 thousand was recognized for the year ended December 31, 2025.

As of December 31, 2024, $ 4.3 million residential mortgage loans held for sale was recorded and a servicing asset of $ 27 thousand.

Premises and Equipment

At December 31, 2025 and 2024, premises and equipment consisted of the following:

(In thousands) December 31,

(In thousands) 2025 2024

Land $ 12,819 $ 12,819

7 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023, depreciation and amortization expense related to premises and equipment totaled $ 1.0 million, $ 1.1 million, and $ 1.2 million, respectively.

For the year ended December 31, 2024, $ 13,000 worth of furniture and equipment was sold, and a $ 3,000 gain was recorded on the sale.

No property was sold in 2023 and 2022.

2025 FORM 10-K 76

PATRIOT NATIONAL BANCORP, INC.

2 unchanged sentences

Other Real Estate Owned ( “ OREO ” )

The OREO balance consists of foreclosed residential properties from loans receivable that were marketed for sale.

As of December 31, 2025, the Bank’s OREO balance was zero , as the residential loan receivable of a foreclosed residential property acquired in 2023 was sold during 2025.

The OREO balance reflected the lower of the carrying value or the estimated net realized value of the underlying property.

Prior to sale, a valuation allowance of $ 253 thousand was recorded and a gain on sale of $ 176 thousand was recognized in 2025.

The following table presents an analysis of the activity in OREO for the years ended December 31, 2025, 2024, and 2023:

(In thousands) Year Ended December 31,

2024 2023 2022

Year Ended December 31,

(In thousands) 2025 2024 2023

Beginning balance $ 2,843 $ 2,843 $ —

Additions — — 2,843

Sold ( 2,590 ) — —

Write-downs ( 253 ) — —

Ending balance $ — $ 2,843 $ 2,843

As of December 31, 2024, the Bank’s OREO balance was $ 2.8 million, representing property acquired in 2023.

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

For the years ended December 31, 2024, 2023 and 2022, the Bank did not sell any OREO properties.

Goodwill and Other Intangible Assets

The Company’s acquisitions are accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations.

Both the purchased assets and liabilities assumed are recorded at their respective acquisition date fair values.

Determining the fair value of assets and liabilities, especially the loan portfolio, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.

At date of acquisition fair values are generally preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding fair values becomes available.

Information on goodwill for the year ended December 31, 2024, 2023 and 2022 is as follows:

Year Ended December 31,

(In thousands) 2024 2023 2022

Balance, beginning of period $ — $ 1,107 $ 1,107

Impairment $ — $ ( 1,107 ) $ —

Balance, end of period $ — $ — $ 1,107

Goodwill is evaluated for impairment annually or whenever we identify certain triggering events or circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Events or circumstances that might indicate an interim evaluation is warranted include, among other things, unexpected adverse business conditions, macro and reporting unit specific economic factors, supply costs, unanticipated competitive activities, and acts by governments and courts.

The fair value of each reporting unit is compared to the carrying amount of such reporting unit in order to determine if impairment is indicated.

The Company performed a quantitative assessment as of October 31, 2023, the Company’s annual goodwill impairment measurement date.

The 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, the goodwill was considered impaired, and a full impairment charge of $ 1.1 million was recorded in 2023.

In 2023, the Company performed an annual goodwill impairment assessment and determined the asset to be fully impaired.

An impairment charge of $ 1.1 million was recorded in 2023.

Therefore, the goodwill balance was zero as of December 31, 2025, 2024, and 2023.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The table below provides information regarding the carrying amounts and accumulated amortization of amortized Core deposit intangible assets as of the dates set forth below.

(In thousands) As of December 31,

Core Deposit Intangibles (CDI) was recorded as part of the Prime Bank business combination in May 2018.

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

For the years ended December 31, 2025, 2024, and 2023 the amortization was $ 47 thousand, $ 47 thousand, and $ 46 thousand, respectively.

The amortization expense was included in the other operating expenses on the Consolidated Statements of Operations.

The table below provides information regarding the carrying amounts and accumulated amortization of CDI assets as of the dates set forth below.

As of December 31,

(In thousands) 2025 2024

Gross carrying amount $ 748 $ 748

2 unchanged sentences

Net carrying amount $ 109 $ 156

CDI was recorded as part of the Prime Bank business combination in May 2018.

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

For the year ended December 31, 2024, 2023 and 2022 the amortization was $ 47,000 , $ 46,000 and 47,000 , respectively.

The amortization expense was included in the other operating expenses on the Consolidated Statements of Operations.

2025 FORM 10-K 77

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The following table presents the balance of deposits held, by category, and the related weighted average stated interest rate as of December 31, 2025 and 2024.

14 unchanged sentences

Total Deposits $ 965,786 2.73 % $ 966,597 2.91 %

The Company’s total deposits includes digital payment deposits of prepaid debit cards for corporate, consumer and government clients.

The digital payment deposits are included in the non-interest-bearing deposits, negotiable order of withdrawal accounts, interest bearing DDA and money market deposits, which totaled approximately $ 265.5 million and $ 213.4 million as of December 31, 2024 and 2023, respectively.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The Company’s total deposits include deposits associated with prepaid debit cards for corporate, consumer and government clients administered by card program managers.

These digital-payment-related deposits are included in the non-interest-bearing deposits, negotiable order of withdrawal accounts, interest bearing DDA and money market deposits, which totaled approximately $ 297.7 million and $ 265.5 million as of December 31, 2025 and 2024, respectively.

The following table presents interest expense, by deposit category, and the related weighted average effective interest rate for each of the years in the three-year period ended December 31, 2025.

(In thousands) Year ended December 31,

Year ended December 31,

2025 2024 2023

(In thousands) Interest

Expense Weighted

11 unchanged sentences

Brokered deposits 2,784 4.35 % 2,315 4.65 % 3,199 4.02 %

$ 26,049 3.55 % $ 21,668 3.05 % $ 5,300 0.93 %

Total $ 26,663 3.37 % $ 26,049 3.55 % $ 21,668 3.05 %

2025 FORM 10-K 78

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

As of December 31, 2025, contractual maturities of Certificates of Deposit (“CDs”) and brokered deposits are summarized as follows:

8 unchanged sentences

More than 4 years through 5 years 41 — — 41

$ 174,095 $ 65,278 $ 69,702 $ 309,075

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Total $ 206,915 $ 76,480 $ 54,683 $ 338,078

As of December 31, 2025 and 2024, total borrowings were $ 16.4 million and $ 33.1 million, respectively.

10 unchanged sentences

Of this amount, $ 55.0 million was used by a standby letter of credit, as described further in Note 18, Financial Instruments with Off-Balance-Sheet Risk.

Additionally, $ 250,000 of the maximum borrowing capacity was used by an overnight line of credit designed to cover the Bank for temporary overdraft positions.

As of December 31, 2024 and 2023, no funds had been borrowed under the line of credit.

Additionally, $ 250 thousand of the maximum borrowing capacity was used by an overnight line of credit designed to cover the Bank for temporary overdraft positions.

As of December 31, 2025 and 2024, zero funds had been borrowed under the line of credit.

FHLB-B advances are structured to facilitate the Bank’s management of its balance sheet and liquidity requirements.

In 2024, the Company repaid $ 30.0 million in long-term advances and $ 68.0 million in short-term borrowings.

As a result, the outstanding advances decreased from $ 101.0 million as of December 31, 2023, to $ 3.0 million as of December 31, 2024.

At December 31, 2024, the FHLB-B advances carried a fixed interest rate of 4.55 % with a remaining maturity of 9 days.

Interest expense incurred for FHLB-B borrowing for the years ended December 31, 2024, 2023 and 2022 were $ 1.1 million, $ 4.2 million and $ 3.5 million, respectively.

As a result, the outstanding advances decreased to $ 3.0 million as of December 31, 2024, and decreased to zero as of December 31, 2025.

Interest expense incurred for FHLB-B borrowing for the years ended December 31, 2025, 2024, and 2023 were $ 3 thousand, $ 1.1 million, and $ 4.2 million, respectively.

Correspondent Bank - Lines of Credit

Patriot has entered into unsecured federal funds sweep and federal funds line of credit facility agreements with certain correspondent Banks.

As of December 31, 2024 and 2023, borrowings available under the agreements totaled $ 5.0 million and $ 22.0 million, respectively.

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 December 31, 2024 and 2023.

Interest expense incurred for the year ended December 31, 2024 , 2023 and 2022 was $ 4,000 , $ 117,000 and $ 34,000 , respectively.

In prior years, Patriot had entered unsecured federal funds sweep and federal funds line of credit facility agreements with certain correspondent Banks.

The purpose of these agreements was to provide a credit facility intended to satisfy overnight federal

2025 FORM 10-K 79

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

account balance requirements and to provide for daily settlement of FRB, Automated Clearing House (“ACH”), and other clearinghouse transactions.

As of December 31, 2025, there are no remaining agreements active.

As of December 31, 2025 and 2024, borrowings available under the agreements totaled zero and $ 5.0 million, respectively.

There was zero outstanding balance under the agreements at December 31, 2025 and 2024.

Interest expense incurred for the year ended December 31, 2025 , 2024, and 2023 was zero , $ 4 thousand, and $ 117 thousand, respectively.

Other Borrowing

3 unchanged sentences

A total of $ 70.0 million and $ 40.0 million was borrowed from the Discount Window and fully repaid during the years ended December 31, 2025 and 2024, respectively.

There was no outstanding balance under the agreements as of December 31, 2024 and 2023.

Interest expense incurred for the years ended December 31, 2024 and 2023 was $ 32,000 and $ 48,000 , respectively.

In 2022, no funds were borrowed from the Discount Window, and no interest expense was incurred.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

There was zero outstanding balance under the agreements as of December 31, 2025 and 2024.

Interest expense incurred for the years ended December 31, 2025, 2024, and 2023 was $ 98 thousand, $ 32 thousand, and $ 48 thousand, respectively.

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").

4 unchanged sentences

As of December 31, 2024, Patriot had paid off the BTFP borrowing of $ 70.0 million that was outstanding as of December 31, 2023.

Interest expense incurred was $ 2.3 million and $ 1.8 million for the years ended December 31, 2024 and 2023.

In 2022, no funds were borrowed under the BTFP, and no interest expense was incurred.

Interest expense incurred was zero , $ 2.3 million, and $ 1.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.

On December 22, 2016, the Company issued $ 12 million of senior notes (“2016 Senior Notes”) bearing interest at 7 % per annum.

4 unchanged sentences

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 Senior Notes, the Company incurred $ 360,000 of costs, which are being amortized over the term of the 2022 Senior Notes to recognize a constant rate of interest expense.

As of December 31, 2024, unamortized debt issuance cost of $ 139,000 was deducted from the face amount of the Senior Notes included in the Consolidated Balance Sheet.

The Senior Notes were amended in March 2025.

Subsequent Events for more information.

The 2022 Senior Note Purchase Agreement contains certain customary representations, warranties, and covenants made by each of the Company and the Note Purchasers (“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 year ended December 31, 2024, 2023 and 2022, the Company recognized interest expense of $ 1.2 million, $ 1.2 million and $ 866,000 , respectively, and the debt issuance cost amortization expense was $ 139,000 , $ 139,000 and zero , respectively.

As of December 31, 2024 and 2023, $ 470,000 and $ 470,000 of interest was included in accrued expenses and other liabilities on the Consolidated Balance Sheet, respectively.

In connection with the issuance of the 2022 Senior Notes, the Company incurred $ 360 thousand of costs, which are being amortized over the term of the 2022 Senior Notes to recognize a constant rate of interest expense.

Unamortized debt issuance cost of zero and $ 139 thousand as of December 31, 2025 and 2024, respectively.

For the years ended December 31, 2025, 2024, and 2023, the Company recognized interest expense of $ 0.6 million, $ 1.2 million, and $ 1.2 million, inclusive of the debt issuance cost amortization of $ 162 thousand, $ 139 thousand and $ 139 thousand, respectively, in respect of the 2022 Senior Notes.

As of December 31, 2025 and 2024, zero and $ 470 thousand of interest was included in accrued expenses and other liabilities on the Consolidated Balance Sheet, respectively.

During the third quarter of 2025 , the remaining principal balance of the 2022 Senior Notes were repaid in full.

Subordinated notes

1 unchanged sentence

The Subordinated Notes initially bear 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.

Interest on the Subordinated Notes is payable beginning on December 30, 2018.

The Subordinated Notes were amended in March 2025.

Subsequent Events for more information.

2025 FORM 10-K 80

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

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 December 31, 2024 and 2023, $ 102,000 and $ 131,000 of unamortized debt issuance costs have been deducted from the face amount of the Subordinated Notes included in the Consolidated Balance Sheet, respectively.

For the years ended December 31, 2024, 2023 and 2022, the Company recognized interest expense of $ 889,000 , $ 786,000 and $ 654,000 , respectively.

which was replaced by Secured Overnight Financing Rate ( 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.

Interest on the Subordinated Notes is payable beginning on December 30, 2018.

In connection with the issuance of the Subordinated Notes, the Company incurred $ 291 thousand of debt issuance costs, which are being amortized over the term of the Subordinated Notes to recognize a constant rate of interest expense.

At December 31, 2025 and 2024, $ 58 thousand and $ 102 thousand of unamortized debt issuance costs have been deducted from the face amount of the Subordinated Notes included in the Consolidated Balance Sheet, respectively.

For the years ended December 31, 2025, 2024, and 2023, the Company recognized interest expense of $ 707 thousand, $ 889 thousand, and $ 786 thousand, respectively.

The Subordinated Notes were amended in March 2025.

The amendment to the Subordinated Note provides that the interest on the Subordinated Note will be PIK and the aggregate outstanding principal amount of the Subordinated Note will be automatically increased on each interest payment date by the amount of such PIK interest for all accrued and unpaid interest payments as of the closing date of the Private Placement and for future scheduled interest payments owed through and including the March 30, 2026 interest payment date.

In addition, pursuant to such amendment, the noteholder agreed to convert $ 2.0 million of the outstanding principal amount of the Subordinated Note into shares of Common Stock effective on the closing date of the Private Placement.

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 proceeds, net of a $ 240 thousand 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.

4 unchanged sentences

The junior subordinated debentures bear interest at three-month LIBOR (replaced by SOFR) plus 3.15 % ( 7.41 % at December 31, 2025) and mature on March 26, 2033, at which time the principal amount borrowed will be due.

Beginning in the second quarter of 2009, the Company opted to defer payment of quarterly interest on the junior subordinated debentures for 20 consecutive quarters.

In June of 2014, the Company brought the debt current by paying approximately $ 1.7 million of interest in arrears to the holders of the junior subordinated debentures.

On bringing the debt current and, as permitted under the terms of the junior subordinated debentures, the Company again opted to defer payment of quarterly interest through September 2016, when a $ 0.7 million payment was made to bring the debt current.

In December 2024, the Company opted to defer payment of the quarterly interest, as permitted under the terms of the junior subordinated debentures.

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.

For the years ended December 31, 2024, 2023 and 2022, $ 10,000 , $ 9,000 and $ 9,000 of debt placement fee amortization has been included in interest expense recognized of $ 707,000 , $ 695,000 and $ 412,000 , respectively.

As of December 31, 2024 and 2023, the unamortized placement fee deducted from the face amount of the junior subordinated debt owed to the unconsolidated trust amounted to $ 101,000 and $ 111,000 , respectively, and accrued interest on the junior subordinated debentures was $ 174,000 and $ 12,000 , respectively.

The placement fee of $ 240 thousand 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.

For the years ended December 31, 2025, 2024, and 2023, $ 10 thousand, $ 10 thousand and $ 9 thousand of debt placement fee amortization has been included in interest expense recognized of $ 648 thousand, $ 707 thousand, and $ 695 thousand, respectively.

As of December 31, 2025 and 2024, the unamortized placement fee deducted from the face amount of the junior subordinated debt owed to the unconsolidated trust amounted to $ 91 thousand and $ 101 thousand, respectively, and accrued interest on the junior subordinated debentures was $ 9 thousand and $ 174 thousand, 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.

1 unchanged sentence

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 December 31, 2024 and 2023, the note had a balance outstanding of $ 162,000 and $ 376,000 , respectively.

The note originally set to mature in August 2024, was extended from August 25, 2024 to September 1, 2025, with the Bank continuing its scheduled principal and interest payments.

The note is secured by a first Mortgage Deed and Security Agreement on the purchased property.

Interest expense incurred for the years ended December 31, 2024, 2023 and 2022 was $ 5,000 , $ 8,000 and $ 12,000 , respectively.

The note matured in the third quarter of 2025, as of December 31, 2025 and 2024, the note had a balance outstanding of zero and $ 162 thousand, respectively.

Interest expense incurred for the years ended December 31, 2025, 2024, and 2023 was $ 1 thousand, $ 5 thousand, and $ 8 thousand, respectively.

2025 FORM 10-K 81

PATRIOT NATIONAL BANCORP, INC.

4 unchanged sentences

(In thousands)

Year ending December 31, FHLB and FRB

Borrowings Senior

Notes Subordinated

Payable Total

2025 $ 3,000 $ — $ — $ — $ 162 $ 3,162

2026 — 12,000 — — — 12,000

2027 — — — — — —

Year ending December 31, Subordinated

2026 $ — $ — $ —

1 unchanged sentence

Thereafter — 8,248 8,248

Total contractual maturities of borrowings 3,000 12,000 10,000 8,248 162 33,410

Total of contractual maturities 8,347 8,248 16,595

Unamortized debt issuance costs ( 58 ) ( 91 ) ( 149 )

Balance of borrowings as of December 31, 2024 $ 3,000 $ 11,861 $ 9,898 $ 8,147 $ 162 $ 33,068

Balance at December 31, 2025 $ 8,289 $ 8,157 $ 16,446

Derivatives Not Designated in Hedge Relationships

12 unchanged sentences

Further discussion of the accounting policy of derivatives is set forth in Note 1, and information about the valuation methods used to measure the fair value of derivatives is provided in Note 21 to the Consolidated Financial Statements.

2025 FORM 10-K 82

PATRIOT NATIONAL BANCORP, INC.

16 unchanged sentences

3rd party interest rate swap 1,290 4.5 4.38 % 1 Mo.

LIBOR + 2.00 %

SOFR + 2.00 %

Classified in Other Liabilities:

Customer interest rate swap 1,290 4.5 4.38 % 1 Mo.

LIBOR + 2.00 %

SOFR + 2.00 %

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.

19 unchanged sentences

The variable lease cost primarily represents variable payments such as common area maintenance and utilities, which are included in the occupancy and equipment expenses on the Consolidated Statements of Operations.

For the year ended December 31, 2024,2023 and 2022, the fixed lease costs for the non-cancelable operating leases were $ 459,000 , $ 581,000 and $ 582,000 , respectively.

For the year ended December 31, 2024, 2023 and 2022 , the variable lease costs for the non-cancelable operating leases were $ 34,000 , $ 39,000 and $ 39,000 , respectively.

For the year ended December 31, 2025, 2024, and 2023, the fixed lease costs for the non-cancelable operating leases were $ 416 thousand, $ 459 thousand, and $ 581 thousand, respectively.

For the year ended December 31, 2025, 2024, and 2023 , the variable lease costs for the non-cancelable operating leases were $ 128 thousand, $ 34 thousand, and $ 39 thousand, respectively.

2025 FORM 10-K 83

PATRIOT NATIONAL BANCORP, INC.

10 unchanged sentences

Year Ended December 31,

2024 2023 2022

(In thousands) 2025 2024 2023

Operating lease cost $ 416 $ 459 $ 581

6 unchanged sentences

As of December 31, 2025 and 2024, the undiscounted lease payments were $ 1.4 million and $ 1.8 million, respectively.

The lease payments were not reduced by minimum sublease rentals of $ 216,000 and $ 313,000 due in the future under non-cancelable subleases, respectively.

The lease payments were not reduced by minimum sublease rentals of $ 117 thousand and $ 216 thousand due in the future under non-cancelable subleases, respectively.

Rent expense for operating leases is recognized in earnings on a straight-line basis over the base term of the respective lease and is included in the consolidated statement of operations as a component of Occupancy and Equipment expense.

For the years ended December 31, 2024, 2023 and 2022, total rent expense for cancellable and non-cancellable operating leases was $ 514,000 , $ 593,000 , and $ 594,000 , respectively.

For the years ended December 31, 2024, 2023 and 2022, Patriot recognized gross rental income of $ 302,000 , $ 395,000 , and $ 566,000 offset by rental costs of $ 3,000 , $ 3,000 , and $ 5,000 , respectively.

For the years ended December 31, 2025, 2024, and 2023, total rent expense for cancellable and non-cancellable operating leases was $ 542 thousand, $ 514 thousand, and $ 593 thousand, respectively.

For the years ended December 31, 2025, 2024, and 2023, Patriot recognized gross rental income of $ 323 thousand, $ 302 thousand, and $ 395 thousand offset by rental costs of $ 1 thousand, $ 3 thousand, and $ 3 thousand, respectively.

2025 FORM 10-K 84

PATRIOT NATIONAL BANCORP, INC.

3 unchanged sentences

Employment Agreements

The Company has a severance agreement for two Executive Vice Presidents that provides for severance equal to 12 months of current salary, and one Executive Vice President that provides for severance equal to 6 months of current salary, if the Executive officer is terminated within 12 months of a change of control.

As of December 31, 2025, the Company had a severance agreement for one Executive Vice President that provides for severance equal to 9 months of current salary, and also provides for severance equal to 12 months of current salary, if the Executive officer is terminated within 12 months of a change of control.

Legal Matters

2 unchanged sentences

Following is a summary of the components of the federal and state income tax expense (benefit) for each of the years in the three-year period ended December 31, 2025.

(In thousands) Year Ended December 31,

2024 2023 2022

Year Ended December 31,

(In thousands) 2025 2024 2023

Federal $ — $ ( 71 ) $ 2,283

6 unchanged sentences

For each of the years in the three-year period ended December 31, 2025, the difference between the federal statutory income tax rate and Patriot’s effective income tax rate reconciles as follows:

(In thousands) Year Ended December 31,

2024 2023 2022

Year Ended December 31,

(In thousands) 2025 % 2024 2023

Income taxes at statutory Federal rate $ ( 2,657 ) 21.00 % $ ( 3,380 ) $ ( 1,183 )

State taxes, net of Federal benefit ( 390 ) ( 309 ) 343

Project expenses for merger and acquisition — — ( 383 )

State taxes, net of Federal benefit(a) 20 ( 0.16 )% ( 390 ) ( 309 )

Deferred tax valuation allowance 2,679 ( 21.18 )% 27,583 —

2 unchanged sentences

Provision (benefit) for income taxes $ 59 ( 0.47 )% $ 23,785 $ ( 1,454 )

(a) State taxes in Connecticut and New York made up the majority (greater than 50%) of the tax effect in this category.

The effective tax (benefit) rate for the years ended December 31, 2025, 2024, and 2023 was ( 0.47 )%, 147.8 %, and ( 25.8 )%, respectively.

The Company’s effective rates for all periods were affected by state taxes and non-deductible expenses and the full valuation allowance on the DTAs in the third quarter of 2024.

The Company’s effective rates were affected by state taxes and non-deductible expenses and the full valuation allowance on the DTAs in 2024.

2025 FORM 10-K 85

PATRIOT NATIONAL BANCORP, INC.

3 unchanged sentences

The significant components of Patriot’s net deferred tax (liabilities) assets at December 31, 2025 and 2024 are presented below.

(In thousands) December 31,

(In thousands) 2025 2024

Deferred tax assets:

4 unchanged sentences

Unrealized loss AFS securities 4,333 5,259

CECL transition — 3,565

Allowance for credit loss 1,820 1,944

17 unchanged sentences

After applying the limitation at December 31, 2025, Patriot has $ 35.3 million post-change net operating loss carry-forwards 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 Company’s Private Placement or the registered direct offerings completed later in 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 in the accompanying Consolidated Balance Sheets as of that date, although it could affect the amount and availability of NOL carryforwards for future periods.

Patriot has approximately $ 64.2 million of NOLs available for Connecticut tax purposes at December 31, 2025, which may be used to offset up to 50 % of taxable income in any year.

The NOLs will expire between 2030 and 2055 .

In addition, the Company had state net operating loss carryforwards of approximately $ 13.4 million in New York and $ 1.9 million in New Jersey, which are scheduled to expire in 2044.

Furthermore, Patriot had $ 1.2 million of NOLs in Florida, which may be carried forward indefinitely.

These state NOL amounts likewise do not reflect the effect, if any, of ownership changes or related limitation analyses that may result from the Private Placement or the registered direct offerings completed in 2025.

The deferred tax liabilities are included in accrued expenses and other liabilities on the Consolidated Balance Sheet.

2025 FORM 10-K 86

PATRIOT NATIONAL BANCORP, INC.

2 unchanged sentences

Valuation Allowance against Deferred Tax Assets

Patriot recognizes income taxes under the asset and liability method.

Under this method, DTAs and DTLs are recognized for the estimated tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and loss carry forwards.

DTAs and DTLs are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on DTAs and DTLs of a change in tax rates is recognized in income in the period that includes the enactment date.

In certain circumstances DTAs are subject to reduction by a valuation allowance.

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.

The Company recognize deferred tax assets to the extent management 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.

Deferred tax assets are recognized to the extent management believes it is more likely than not that such assets will be realized.

Realization of deferred tax assets is dependent upon the generation of future taxable income during periods which temporary differences are expected to be recovered or settled.

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.This resulted in an increase in our income tax expense of approximately $ 25.1 million in the third quarter of 2024.

federal and state deferred tax assets.

This resulted in an increase in our income tax expense of approximately $ 25.1 million in the third quarter of 2024.

The key factor for providing a full valuation allowance was the Company’s 3-year cumulative operating losses.

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.

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

As of December 31, 2025, the Company maintained a full valuation allowance against its deferred tax assets.

During the year ended December 31, 2025, management performed its required annual assessment of the realizability of deferred tax assets, including consideration of all available positive and negative evidence.

Significant negative evidence included the Company’s recent history of operating losses and uncertainty regarding timing and sustainability of future taxable income.

Accordingly, management concluded that the full valuation allowance remained appropriate at December 31, 2025, and no release of the valuation allowance was recorded during the year ended December 31, 2025.

The valuation allowance was $ 31.0 million and $ 28.3 million as of December 31, 2025 and 2024, respectively.

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

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

Any future release of all or a portion of the valuation allowance would depend on management’s conclusion, based on sufficient positive evidence, that realization of the related deferred tax assets is more likely than not.

Unrecognized tax benefits

6 unchanged sentences

Patriot’s returns for tax years 2022 through 2025 are subject to examination by the IRS for U.S.

Federal tax purposes and, for State tax purposes, by the taxing authorities of Connecticut, New York and New Jersey, Department of Revenue Services for the State of Connecticut and the State of New York Department of Taxation and Finance.

Federal tax purposes and, for State tax purposes, by the taxing authorities of Connecticut, New York and Florida.

In addition, the Company’s tax returns for the years ended 2021 through 2025 remain subject to examination by New Jersey.

Share-based Compensation

On November 10, 2022, the Board of Directors approved the Amended and Restated 2020 Plan (the “Amended and Restated 2020 Plan”), which was approved and ratified by shareholders of the Company on December 14, 2022.

The Amended and Restated 2020 Plan terminated on December 31, 2025.

Additional information regarding the Amended and Restated 2020 Plan’s background and original terms is included in Note 15 to the consolidated financial statements in the Company’s Form 10-K for the year ended December 31, 2024.

In March 2025, the Company’s Board of Directors approved the 2025 Omnibus Equity Incentive Plan (the “2025 Plan”).

The shareholders of the Company ratified the 2025 Plan on June 26, 2025.

Details of the 2025 Plan are as described below.

2025 Omnibus Equity Incentive Plan

In connection with the Private Placement, the Company’s Board of Directors has approved the 2025 Plan in March 2025.

The 2025 Plan received shareholder approval at the shareholders' meeting on June 26, 2025, and became effective on that date.

The 2025 Plan is designed to provide the Company with a competitive advantage in attracting, retaining, and motivating officers,

2025 FORM 10-K 87

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

Share-based Compensation

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”).

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 the 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 December 31, 2024, 74,540 shares of stock are 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 Company’s Board of Directors approved the 2025 Omnibus Equity Incentive Plan (the “2025 Plan”) to be effective at the closing of the Private Placement, subject to and contingent upon the approval of the Company’s shareholders.

Subsequent Event for more information.

The following is a summary of the status of the Company’s restricted share awards under the Amended and Restated 2020 Plan as of and for each of the years in the three-year period ended December 31, 2024.

Shares Awarded Weighted Average

employees, directors, and consultants by offering incentives directly linked to shareholder value.

The Compensation Committee of the Board will administer the Plan.

Under the 2025 Plan, various types of awards can be issued, including Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units (RSUs), Performance Units, and Other Stock-Based Awards, as defined within the 2025 Plan.

The maximum number of shares of Common Stock, Options, and/or Stock Appreciation Rights that may be granted under the 2025 Plan is capped at twenty percent ( 20 %) of the total outstanding shares of Common Stock, including both voting and non-voting shares, with a minimum threshold of 10,000,000 shares.

Below table summarizes the Company’s share-based compensation activity for the three-year period ended December 31, 2025.

Amended and Restated 2020 Plan 2025 Plan

Shares Weighted average

fair value Number of

Shares Weighted average

Unvested at December 31, 2022 22,660 $ 7.11

4 unchanged sentences

Vested ( 15,779 ) $ 7.46

Forfeited 0 $ —

Unvested at December 31, 2024 146,185 $ 2.87 — $ —

1 unchanged sentence

Vested ( 10,758 ) $ 6.22 3,633,749 $ 1.06

Forfeited ( 127,298 ) $ 3.09 — $ —

Unvested at December 31, 2025 8,129 $ 4.37 8,044,611 $ 1.16

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 corresponds to the vesting schedule of each award.

Each vesting portion of an award is recognized at its grant date fair value.

For the years ended December 31, 2024, 2023 and 2022, the Company recognized total share-based compensation expense of $ 184,000 , $ 105,000 , and $ 86,000 , respectively.

The share-based compensation expense attributable to Patriot’s external Directors totaled $ 48,000 , $ 49,000 , and $ 54,000 for the years ended December 31, 2024, 2023, and 2022, respectively.

For each of those years, the Directors received total compensation of $ 214,000 , $ 259,000 , and $ 248,000 , respectively, and these amounts are included in Other Operating Expenses in the Consolidated Statements of Operations.

For the years ended December 31, 2024, 2023 and 2022, share-based compensation expense attributable to employees of Patriot was $ 136,000 , $ 56,000 , and $ 32,000 , respectively.

Awards granted under the 2025 Plan are in the form of Restricted Stock Units (RSUs).

The share amounts presented in the table above reflect the number of RSUs granted and vested, where vested amounts represent RSUs for which the vesting conditions were satisfied during the period;

no RSUs granted under the 2025 Plan settled into shares of Common Stock during the year ended December 31, 2025.

The Company recognizes share based compensation expense on a straight-line basis over the vesting schedule of each award, for each vesting portion of an award equal to its grant date fair value.

For the years ended December 31, 2025, 2024, and 2023, the Company recognized total share-based compensation expense of $ 5.2 million, $ 184 thousand, and $ 105 thousand, respectively.

The share-based compensation expense attributable to the Company’s Directors totaled $ 516 thousand, $ 48 thousand, and $ 49 thousand for the years ended December 31, 2025, 2024, and 2023, respectively.

For each of those years, the Directors received total compensation of $ 1.6 million, $ 214 thousand, and $ 259 thousand, respectively, and these amounts are included in Other Operating Expenses in the Consolidated Statements of Operations.

For the years ended December 31, 2025, 2024, and 2023, share-based compensation expense attributable to employees of Patriot was $ 4.7 million, $ 136 thousand, and $ 56 thousand, respectively.

Unrecognized compensation expense attributable to the unvested restricted shares outstanding as of December 31, 2025 amounted to $ 8.1 million, which amount is expected to be recognized over the weighted average remaining life of the awards of 1.8 years.

Stock Options

On June 26, 2025, the Company granted stock options to purchase 400,000 shares of Common Stock at an exercise price of $ 1.40 per share.

The options vest and become exercisable starting on the grant date, subject to the terms and conditions outlined in the 2025 Plan and award agreement, including any applicable acceleration provisions.

2025 FORM 10-K 88

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

Unrecognized compensation expense attributable to the unvested restricted shares outstanding as of December 31, 2024 amounted to $ 428,000 , which amount is expected to be recognized over the weighted average remaining life of the awards of 2.20 years.

The total estimated compensation expense related to these stock options for the year ended December 31, 2025 was $ 44 thousand.

The expense is recorded in employee compensation costs on the Consolidated Statements of Operations.

The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation—Stock Compensation." The fair value of the stock options granted is estimated on the grant date using an appropriate valuation model, such as the Black-Scholes model, and is recognized as an expense over the vesting period.

Key assumptions used in estimating the fair value of the options include the expected volatility of the Company's stock, the risk-free interest rate, the expected dividend yield, and the expected term of the options.

These assumptions are based on historical data and market conditions at the time of the grant.

Shareholders ’ Equity

3 unchanged sentences

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 the outstanding unvested RSAs granted to directors and employees.

Potential shares of common stock that may be issued by the Company relate to the outstanding unvested RSAs, RSUs, and options granted to directors and employees.

The dilutive effect resulting from these potential shares is determined using the treasury stock method.

1 unchanged sentence

The following is a summary of the computation of basic and diluted earnings per share for each of the years in the three-year period ended December 31, 2025.

(Net income in thousands) Year ended December 31,

2024 2023 2022

Year ended December 31,

(In thousands, except shares) 2025 2024 2023

Basic (loss) earnings per share:

5 unchanged sentences

Weighted average shares outstanding 76,812,476 3,976,224 3,965,324

Effect of potentially dilutive restricted shares of common stock — (1) — (2) 5,801

Potentially dilutive securities(a) — — —

Weighted average diluted shares outstanding 76,812,476 3,976,224 3,965,324

Diluted (loss) earnings per common share $ ( 0.17 ) $ ( 10.03 ) $ ( 1.05 )

(1) The weighted average diluted shares outstanding does not include 40,473 anti-dilutive restricted shares of common stock for the year ended December 31, 2024.

(2) The weighted average diluted shares outstanding does not include 11,438 anti-dilutive restricted shares of common stock for the year ended December 31, 2023.

The Company did not pay any dividends for the year ended December 31, 2024, 2023, and 2022, and has suspended dividend payments.

(a) The weighted average diluted shares outstanding does not include anti-dilutive restricted shares of common stock of 10,000,970 , 40,473 , and 11,438 for the years ended December 31, 2025, 2024, and 2023.

On March 20, 2025, the Company entered into (i) securities purchase agreements (the “Co-Lead Investors Agreements”) with its President and director, Steven Sugarman (the “Lead Party”), and three co-lead investors (the “Co-Lead Investors”), and (ii) securities purchase agreements (the “Purchasers Agreements”, and together with the Co-Lead Investors Agreements, the “Securities Purchase Agreements”) with other accredited investors (collectively, and together with the Co-Lead Investors and the Lead Party, the “Purchasers”).

Also on March 20, 2025, the Company completed a $ 57.75 million private placement resulting in the issuance of 60,400,106 shares of the Company’s common stock, par value $ 0.01 per share (“Common Stock”), at a purchase price of $ 0.75 per share.

2025 FORM 10-K 89

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

In addition, as part of the Private Placement, on March 20, 2025, the Company’s amendments to (i) 6.25 % Fixed to Floating Subordinated Note due June 30, 2028 (the “Subordinated Note”), and (ii) 8.5 % Fixed Rate Senior Notes Due 2026 (the “Senior Notes” and together with the Subordinated Note, the “Notes”) became effective and noteholders converted approximately $ 7.0 million of the aggregate principal amount of the Notes into 9,333,334 shares of Common Stock.

The amendment to the Subordinated Note provides that the interest on the Subordinated Note will be paid-in-kind (“PIK”) and the aggregate outstanding principal amount of the Subordinated Note will be automatically increased on each interest payment date by the amount of such PIK interest for all accrued and unpaid interest payments as of the closing date of the Private Placement and for future scheduled interest payments owed through and including the March 30, 2026 interest payment date.

On May 13, 2025, two note holders of the Senior Notes converted $ 1.90 million of the aggregate principal and interests of the Notes into 2,529,275 shares of common stock.

On June 3, 2025, the Company entered into a Securities Purchase Agreement with accredited investors, facilitating a registered direct offering.

The Company issued and sold 8,524,160 shares of its common stock, at a price of $ 1.25 per share.

The net proceeds of the offering was approximately $ 10.47 million after estimated expenses.

On July 25, 2025, Unity Bancorp Inc.

provided the Company with formal notice of its desire to convert 100 % of its outstanding principal balance and accrued unpaid interest of its Amended Senior Note, in an aggregate amount of $ 2.0 million, into 2,673,369 shares of the Company’s common stock, par value $ 0.01 per share at $ 0.75 per share.

On July 26, 2025, American Bank Incorporated provided the Company with formal notice of its desire to convert 100 % of its outstanding principal balance and accrued unpaid interest of its Amended Senior Note, in an aggregate amount of approximately $ 0.8 million, into 1,071,258 shares of Common Stock at $ 0.75 per share.

On August 29, 2025, the Company entered into a stock purchase agreement and a separate warrant purchase agreement with certain accredited Investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors (the “Offering”), an aggregate of 31,985,103 shares of the Company’s common stock (the “Shares”.

The Shares consist of (a) 19,196,000 shares of the Company’s voting Common Stock (“Voting Common Stock”), and (b) 12,789,103 shares of the Company’s non-voting Common Stock (the “Non-Voting Common Stock”) that will be issuable six months after closing of the Offering upon exercise of three-year warrants (the “Warrants”).

Upon such Warrant holders or their assignees meeting certain conditions (the “Non-Control Conditions”), the Non-Voting Common Stock may be exchanged for shares of Voting Common Stock.

The Shares will be sold to the investors at a price per share of $ 1.25 per Share and the Warrants will be sold to investors at a price of $ 0.125 per warrant share.

The Warrants are exercisable no earlier than six months after the closing of the Offering at an exercise price of $ 1.56 per share, subject to increase to as much as $ 1.685 per share under certain conditions.

The proceeds from the Offering, prior to deducting the estimated offering expenses, are expected to be approximately $ 25.6 million.

Estimated offering expenses are $ 250 thousand.

Patriot’s authorized common stock consists of 200,000,000 shares have a $ 0.01 par value, with 115,070,413 and 4,065,593 shares issued as of December 31, 2025 and 2024, respectively.

Common stock shares outstanding were 114,996,672 and 3,991,852 as of December 31, 2025 and 2024, respectively.

Preferred Stock

On March 20, 2025, as part of the private placement, the Company issued 90,832 shares of its Series A Non-Cumulative Perpetual Convertible Preferred Stock (the “Series A Preferred Stock”).

The Series A Preferred Stock has no par value and a liquidation preference of $ 60 per share.

The gross proceeds from the issuance of the Series A Preferred Stock totaled $ 5.45 million.

On July 3, 2025, the Series A Preferred Stock was converted into 7,266,560 shares of the Company’s Non-Voting Common Stock.

No preferred shares authorized, issued or outstanding as of December 31, 2025 and 2024.

The Company did not pay any dividends for the year ended December 31, 2025, 2024, and 2023.

2025 FORM 10-K 90

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

401(k) Savings Plan

6 unchanged sentences

Participants immediately vest in Patriot’s matching contributions, if applicable.

During the years ended December 31, 2024, 2023, and 2022, Patriot made matching contributions to the 401(k) Plan of $ 284,000 , $ 278,000 , and $ 251,000 , respectively.

During the years ended December 31, 2025, 2024, and 2023, Patriot made matching contributions to the 401(k) Plan of $ 227 thousand, $ 284 thousand, and $ 278 thousand, respectively.

Financial Instruments with Off-Balance-Sheet Risk

In the normal course of business, the Bank is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers.

In the ordinary course of business, the Bank 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, which involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet.

19 unchanged sentences

Collateral held varies, but may include commercial property, residential property, deposits, and securities.

The Bank has established an allowance for credit loss of $ 182,000 and $ 271,000 as of December 31, 2024 and 2023, respectively, which is included in accrued expenses and other liabilities on the Consolidated Balance Sheet.

The Bank has established an allowance for credit loss of $ 80 thousand and $ 182 thousand as of December 31, 2025 and 2024, respectively, which is included in accrued expenses and other liabilities on the Consolidated Balance Sheet.

Standby letters of credit are written commitments issued by the Bank to guarantee the performance of a customer to a third party.

2 unchanged sentences

As of December 31, 2025, the Bank has 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 91

PATRIOT NATIONAL BANCORP, INC.

7 unchanged sentences

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 FDIC, 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.”

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 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%.

6 unchanged sentences

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.

During 2024, the Bank significantly reduced its total and risk-based assets to work towards achieving the OCC requirements

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 Bank has been working to address each of the items identified in the OCC Agreement.

The Company has completed the Private Placement , which was critical to address the Capital Plan and Higher Minimums Article and pivotal to the Strategic Plan.

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.

As of December 31, 2025, the Bank has met all of its regulatory capital requirements.

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

On January 14, 2025, the Bank entered into Formal Agreement, 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 Formal Agreement.

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

The same minimum capital ratios were re-established within the Formal Agreement under its Capital Plan and Higher Minimums Articles so that all capital requirements are governed by the Formal Agreement.

Under these provisions, the Bank must maintain, on an ongoing basis, 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 %.

The Bank has been working to address each of the items identified in the Formal Agreement.

The Company completed the Private Placement in March 2025, which was critical to address the Capital Plan and Higher Minimums Articles and pivotal to the Strategic Plan Article in the Formal Agreement.

Certain proceeds from the Private Placement were contributed to the Bank as additional capital and brought the Bank into compliance with the minimum capital ratios required under the Formal Agreement.

Among other efforts, the Company has completed two additional equity issuances in 2025, in furtherance of its obligations under the Capital Plan and Higher Minimums Articles and the Strategic Plan Article in the Formal Agreement.

As of December 31, 2025, the Bank’s capital ratios remain in excess of the minimums required by the Formal Agreement.

Although the Bank's capital ratios are exceeding both standard "well capitalized" levels and the higher minimums set forth in the Formal Agreement, the Bank remains classified as "adequately capitalized" rather than "well capitalized" due to the specific terms of that agreement.

2025 FORM 10-K 92

PATRIOT NATIONAL BANCORP, INC.

10 unchanged sentences

Actual $ 129,587 20.76 % $ 120,329 19.25 % $ 44,534 6.07 % $ 56,536 7.71 %

To be Well Capitalized (1) — — 73,309 10.00 % — — 89,732 10.00 %

To be Well Capitalized(a) — — 62,516 10.00 % — — 73,309 10.00 %

For capital adequacy 49,934 8.00 % 50,013 8.00 % 58,667 8.00 % 58,648 8.00 %

Individual minimum capital ratio (2) — — 84,306 11.50 % — — N/A N/A

Individual minimum capital ratio — — 71,894 11.50 % — — 84,306 11.50 %

Tier 1 Capital (to risk weighted assets):

Actual 117,567 18.84 % 116,657 18.66 % 33,545 4.57 % 55,546 7.58 %

To be Well Capitalized (1) — — 58,648 8.00 % — — 71,785 8.00 %

To be Well Capitalized(a) — — 50,013 8.00 % — — 58,648 8.00 %

For capital adequacy 37,450 6.00 % 37,510 6.00 % 44,001 6.00 % 43,986 6.00 %

Individual minimum capital ratio (2) — — 73,309 10.00 % — — N/A N/A

Individual minimum capital ratio — — 62,516 10.00 % — — 73,309 10.00 %

Common Equity Tier 1 Capital

1 unchanged sentence

Actual 109,567 17.55 % 116,657 18.66 % 25,545 3.48 % 55,546 7.58 %

To be Well Capitalized (1) — — 47,651 6.50 % — — 58,325 6.50 %

To be Well Capitalized(a) — — 40,636 6.50 % — — 47,651 6.50 %

For capital adequacy 28,088 4.50 % 28,132 4.50 % 33,000 4.50 % 32,989 4.50 %

Individual minimum capital ratio (2) — — 73,309 10.00 % — — N/A N/A

Individual minimum capital ratio — — 62,516 10.00 % — — 73,309 10.00 %

Tier 1 Leverage Capital (to average assets):

Actual 117,567 11.52 % 116,657 11.42 % 33,545 3.50 % 55,546 5.79 %

To be Well Capitalized (1) — — 47,948 5.00 % — — 54,170 5.00 %

To be Well Capitalized(a) — — 51,097 5.00 % — — 47,948 5.00 %

For capital adequacy 40,835 4.00 % 40,878 4.00 % 38,368 4.00 % 38,358 4.00 %

Individual minimum capital ratio (2) — — 86,306 9.00 % — — N/A N/A

(1) Designation as "Well Capitalized" does not apply to bank holding companies - the Company.

Individual minimum capital ratio — — 91,975 9.00 % — — 86,306 9.00 %

(a) 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 ratios established by the OCC began to be phased in beginning April 17,2024.

It was not applicable to periods prior to that date and does not apply to bank holding companies - the Company.

Under the terms of the Formal Agreement, the Bank is not eligible to be “Well Capitalized” while the Formal Agreement continues in effect and is designated as “Adequately Capitalized” regardless of its capital ratios being in excess of the regulatory defined Well Capitalized ratios.

Related Party Transactions

In the normal course of business, the Company can grant loans to executive officers, directors and members of their immediate families, as defined, and to entities in which these individuals have more than a 10 % equity ownership, although these loans are infrequent.

No related party loans were outstanding as of December 31, 2024 and 2023.

As of December 31, 2024 and 2023, deposits from related parties aggregated approximately $ 63,000 and $ 64,000 , respectively.

The Company and the Bank engage in transactions with related parties in the ordinary course of business.

For purposes of this note, related parties include the Company's directors and executive officers, their immediate family members, and entities over which such persons exercise control or significant influence, as defined under ASC Topic 850, Related Party Disclosures.

Loans and Extensions of Credit

No extensions of credit to related parties, as defined under ASC 850, were outstanding as of December 31, 2025 or 2024.

The following describes a related party debt transaction completed during 2025 that had no outstanding balance as of December 31, 2025.

Note Conversion — Michael Carrazza / Solaia Capital Holdings LLC

Carrazza serves as a director on the Board of the Company.

Carrazza also serves as manager of Solaia Capital Holdings LLC ("Solaia Capital"), an entity in which he holds a material ownership interest.

In May 2025, Solaia Capital purchased from Fall River Five Cents Savings Bank the outstanding principal balance and accrued unpaid interest of $ 649 thousand (the "Transferred Note") of the Company's 8.5 % Fixed Rate Senior Notes Due January 15, 2026 (the "Senior Notes").

Solaia Capital thereafter elected to convert the Transferred Note into shares of the Company's common stock

2025 FORM 10-K 93

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

pursuant to the terms of an amendment to the Senior Notes previously approved by the Board of Directors, which provided holders of the Senior Notes the right to voluntarily convert outstanding principal and accrued interest into common stock at a conversion price of $ 0.75 per share.

Upon conversion, the Company issued 865,990 shares of its common stock to Solaia Capital, extinguishing the $ 649 thousand outstanding obligation under the Transferred Note.

The conversion price of $ 0.75 per share was the same price at which the Company issued shares of common stock to all investors in its March 20, 2025 private placement.

The transaction was reviewed and approved by the Audit Committee of the Board of Directors prior to consummation, and was thereafter approved by the unanimous written consent of the full Board of Directors on May 11, 2025, with Mr.

Carrazza participating in his capacity as a director.

The Company believes the transaction was effected on terms no less favorable to the Company than those available from unaffiliated noteholders, given that the conversion price was consistent with the terms available to all converting noteholders and with the March 2025 private placement pricing.

Deposit Accounts

The Bank accepts deposits from related parties on terms no more favorable than those offered to similarly situated non-affiliated depositors, including with respect to interest rates, fees, and minimum balance requirements.

Related party deposit balances as of December 31, 2025 and December 31, 2024 were approximately $ 2.2 million and $ 63 thousand, respectively.

The aggregate related party deposit balances are included in total deposits in the accompanying Consolidated Balance Sheets.

Fair Value and Interest Rate Risk

19 unchanged sentences

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).

2025 FORM 10-K 94

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

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.

4 unchanged sentences

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).

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Other Investments

16 unchanged sentences

Due to the significant unobservable input related to the servicing rights, the 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.

Retained Beneficial Interest

The Company retained its rights to sold loans under a loss share agreement and did not transfer such rights to the loan purchasers.

Accordingly, the Company has continuing involvement in the transferred financial assets.

The retained interest is recognized as a separate asset and represents the present value of expected future reimbursements.

The fair value of this asset is estimated using a discounted cash flow methodology that incorporates significant unobservable inputs, including expected credit losses, timing of

2025 FORM 10-K 95

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

cash flows, and appropriate discount rates.

Due to the use of these unobservable inputs, the asset is classified as a Level 3 measurement within the fair value hierarchy in accordance with ASC 820.

The Company evaluates the retained interest on a recurring basis for changes in expected cash flows and records adjustments to fair value as necessary.

Changes in the fair value of the retained interest are recognized in earnings in the period in which they occur.

Derivative asset (liability) - Interest Rate Swaps

5 unchanged sentences

See Notes 1 and 11 for additional disclosures on derivatives.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

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

17 unchanged sentences

The off-balance-sheet financial instruments (i.e., commitments to extend credit) are insignificant and are not recorded on a recurring basis.

2025 FORM 10-K 96

PATRIOT NATIONAL BANCORP, INC.

2 unchanged sentences

The following table provides a comparison of the carrying amounts and estimated fair values of Patriot’s financial assets and liabilities as of December 31, 2025 and 2024:

(In thousands) December 31, 2024 December 31, 2023

December 31, 2025 December 31, 2024

(In thousands) Fair Value

Hierarchy Carrying

16 unchanged sentences

Accrued interest receivable Level 2 4,869 4,869 5,488 5,488

Retained beneficial interest Level 3 518 518 — —

Interest rate swap receivable Level 2 39 39 83 83

16 unchanged sentences

Financial liabilities, total $ 966,645 $ 960,435 $ 1,001,165 $ 1,000,091

The carrying amount of cash and non-interest-bearing balances due from banks, 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.

2025 FORM 10-K 97

PATRIOT NATIONAL BANCORP, INC.

1 unchanged sentence

Notes to consolidated financial statements

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).

15 unchanged sentences

December 31, 2025:

Government agency and mortgage-backed securities $ — $ 60,223 $ — $ 60,223

Government agency and MBS $ — $ 204,068 $ — $ 204,068

Corporate bonds — 1,736 11,727 13,463

2 unchanged sentences

Available-for-sale securities $ — $ 212,950 $ 11,727 $ 224,677

Retained beneficial interest $ — $ — $ 518 $ 518

Interest rate swap receivable $ — $ 39 $ — $ 39

1 unchanged sentence

December 31, 2024:

Government agency and mortgage-backed securities $ — $ 65,671 $ — $ 65,671

Government agency and MBS $ — $ 60,223 $ — $ 60,223

Corporate bonds — 1,612 11,123 12,735

7 unchanged sentences

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.

2025 FORM 10-K 98

PATRIOT NATIONAL BANCORP, INC.

7 unchanged sentences

Year Ended December 31,

2024 2023 2022

(In thousands) 2025 2024 2023

Level 3 fair value, beginning of period $ 11,123 $ 10,262 $ 9,427

10 unchanged sentences

Servicing assets 652 Discounted Cash Flows Market discount rates 10 % - 15 %

Retained beneficial interest(a) $ 518 Discounted Cash Flows Market discount rates 10 % - 15 %

Loss projections (% exposure) 10 % - 20 %

Claim timing (months) 9 months - 18 months

December 31, 2024:

1 unchanged sentence

Servicing assets 852 Discounted Cash Flows Market discount rates 14.73 % - 14.90 %

(a) Loss projections applied in the discounted cash flow analysis ranged from approximately 10 % to 20 %, with lower loss assumptions applied to stronger credits and higher loss assumptions applied to loans with elevated credit risk, weighted average of approximately 15 %.

Claim timing assumptions ranged from approximately 9 to 18 months, with shorter timeframes applied to loans expected to resolve more quickly and longer timeframes applied to loans requiring extended workout or recovery periods, weighted average of approximately 12 months.

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.

4 unchanged sentences

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.

2025 FORM 10-K 99

PATRIOT NATIONAL BANCORP, INC.

5 unchanged sentences

December 31, 2025 and 2024

(In thousands) As of December 31,

As of December 31,

(In thousands) 2025 2024

Cash and due from banks $ 11,500 $ 252

9 unchanged sentences

Years Ended December 31, 2025, 2024, and 2023

(In thousands) Year ended December 31,

2024 2023 2022

Year ended December 31,

(In thousands) 2025 2024 2023

Interest on subordinated debt $ 1,375 $ 1,617 $ 1,502

9 unchanged sentences

Total comprehensive loss $ ( 9,148 ) $ ( 40,302 ) $ ( 3,795 )

2025 FORM 10-K 100

PATRIOT NATIONAL BANCORP, INC.

3 unchanged sentences

Years Ended December 31, 2025, 2024, and 2023

(In thousands) Year ended December 31,

2024 2023 2022

Year ended December 31,

(In thousands) 2025 2024 2023

Cash Flows from Operating Activities:

Net (loss) income $ ( 12,710 ) $ ( 39,882 ) $ ( 4,179 )

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Equity in undistributed net loss (income) of subsidiary 2,539 37,682 2,150

Dividends received from Patriot Bank, N.A.

950 2,500 900

Share-based compensation expense 5,233 184 105

6 unchanged sentences

Net increase in investment in Patriot Bank N.A.

( 66,500 ) — —

Net cash used in investing activities ( 66,500 ) — —

Cash Flows from Financing Activities:

Proceeds from issuance of senior notes — — 12,000

Proceeds from capital raise 86,648 — —

Repayments of senior notes ( 2,884 ) — —

8 unchanged sentences

Deferred debt issuance costs $ ( 23 ) $ — $ 56

Senior debt conversion to common stock $ ( 9,705 ) $ — $ —

Subordinated debt conversion to common stock $ ( 2,000 ) $ — $ —

Accrued interest capitalized into principal $ 1,098 $ — $ —

Retained earnings adjustment - ASC 326 adoption $ — $ — $ 11,510

2025 FORM 10-K 101

PATRIOT NATIONAL BANCORP, INC.

2 unchanged sentences

Segment Information

The Company’s reportable segment is determined by the Chief Executive Officer, who is the designated the chief operating decision maker (“CODM”), based upon information provided about the Company’s products and services offered.

Patriot’s only business segment is Community Banking.

The Company’s reportable segment is determined by the Chief Executive Officer, who is the designated chief operating decision maker (“CODM”), based upon information provided about the Company’s products and services offered.

Patriot’s only business segment is Banking.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The segment is also distinguished by the level of information provided to the CODM, who uses such information to review performance of various components of the business, which are then aggregated and financial performance is evaluated on a company-wide basis, as presented in the Company’s Consolidated Statements of Income.

The CODM will evaluate the financial performance of the Company’s business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the Company’s segment and in the determination of allocating resources.

The CODM will evaluate the financial performance of the Company’s business such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the Company’s segment and in the determination of allocating resources.

The CODM uses consolidated net income to benchmark the Company against its competitors.

The benchmarking analysis coupled with monitoring of budget to actual results on a consolidated basis are used in assessment performance and in establishing compensation.

Interest earning assets consist of commercial and consumer loans, investment securities and cash and provide the majority of interest income in the Community Banking segment.

Interest bearing liabilities consist of nonmaturity and time deposits, FHLB and FRB advances and other borrowings and generate the majority of interest expense.

The consolidated results of operations also include provisions for credit losses, noninterest income and expenses.

Interest earning assets consist of commercial and consumer loans, investment securities and cash and provide the majority of interest income in the Banking segment.

Interest bearing liabilities consist of non-maturity and time deposits, FHLB and FRB advances and other borrowings and generate the majority of interest expense.

The consolidated results of operations also include provisions for credit losses, non-interest income and expenses.

All operations are domestic.

1 unchanged sentence

Subsequent Event

Effective as of February 14, 2025, the note holders of the Company’s 8.5 % Senior Notes due January 15, 2026 agreed to extend the grace period for the interest payment due January 15, 2025 to April 1, 2025 (the “Extension”).

Also on March 20, 2025, the Company completed a $ 57.75 million private placement of:

(i) shares of the Company’s common stock, par value $ 0.01 per share (“Common Stock”), at a purchase price of $ 0.75 per share, and (ii) shares of a new series of the Company’s preferred stock, no par value per share, designated as Series A Non-Cumulative Perpetual Convertible Preferred Stock (the “Series A Preferred Stock”), with a liquidation preference of $ 60 per share (the “Private Placement”).

The Private Placement included the issuance of:

(i) 60,400,106 shares of Common Stock, and (ii) 90,832 shares of Series A Preferred Stock, convertible, in the aggregate, into 7,266,560 shares of Common Stock.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

The amendment to the Senior Notes provides that (i) the maturity date of the Senior Notes will be extended to April 15, 2028, (ii) the interest rate will be increased to 10.0 % effective as of January 1, 2026, and (iii) at any time prior to the maturity date, the Company may repay any amount of the outstanding principal amount of the Senior Notes, in whole or in part, without penalty.

In addition, pursuant to such amendment, the noteholders agreed to convert into shares of Common Stock an amount of the outstanding Senior Notes, on a pro rata basis, equal to $ 5.0 million based on the terms of the amendment and the closing of the private placement, and all accrued and unpaid interest payments as of the closing date of the Private Placement and for future scheduled interest payments owed through the January 15, 2026 payment may be PIK.

The purpose of the Plan is to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, directors and consultants by providing incentives directly linked to shareholder value.

The Plan will be administered by the Compensation Committee of the Board.

The types of awards (the “Awards”) issuable pursuant to the Plan are Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, or Other Stock-Based Awards, as such terms are defined in the Plan.

Subject to the terms of the Plan, the maximum number of shares of Common Stock, Options and/or Stock Appreciation Rights that may be granted pursuant to Awards under the Plan shall be twenty percent ( 20 %) of the then outstanding shares of Common Stock (which, for the avoidance of doubt, includes all outstanding shares of Common Stock, whether voting or non-voting) (the “Share Limit”);

provided, that in no event shall the Share Limit be less than 10,000,000 shares.

The Company entered into an Employment Agreement, dated and effective as of the closing of the Private Placement (the “Employment Agreement”), with Steven Sugarman (the “Executive”), as the Company’s President, with the Executive also having such other roles and responsibilities at the Company and the Bank as shall be mutually agreeable by the parties.

The term of employment ends on April 1, 2029 (the “Employment Period”);

provided, however, that, commencing on April 1, 2026, and on each anniversary of such date (such date and each annual anniversary thereof, a “Renewal Date”), unless previously terminated, the Employment Period will automatically be extended so as to terminate three years from such Renewal Date.

During the Employment Period, the Executive will receive an annual base salary at a rate of not less than $ 200,000 payable in accordance with the Company’s normal payroll policies, subject to the review for increase at least annually by the Compensation Committee of the Board pursuant to normal performance review policies.

With respect to each fiscal year ending during the Employment Period, the Executive will be eligible to receive an annual bonus (the “Annual Bonus”), based on the attainment of performance objectives determined and established by the Compensation Committee, with no more than 50 % of the Annual Bonus for any year payable in the form of equity awards.

The Company will issue to the Executive the initial equity award within thirty ( 30 ) days following the effective date of the 2025 Plan, and within thirty ( 30 ) days following the end of each quarter during the term of the Employment Agreement, the Company will issue to the Executive the quarterly equity award.

The initial equity award means the amount of Restricted Stock Units equal to five percent ( 5 %) of the outstanding Common Stock and all equity securities eligible to be converted into Common Stock as of the effective date.

The quarterly equity award means the amount of Restricted Stock Units equal to the number of shares of Common Stock equivalent to five percent ( 5 %) of the outstanding Common Stock and all equity securities eligible to be converted into Common Stock as of most recent quarter-end minus the amount of Common Stock held by the Executive pursuant to awards previously issued pursuant to the Employment Agreement as of most recent quarter-end.

Such Restricted Stock Units will vest in twelve ( 12 ) equal monthly tranches commencing on the issuance date and will have a restricted period of one year from the date of grant.

Within ten business days following the date on which such restricted period ends, the Company will be obligated to deliver to the Executive:

(i) to the extent the Plan has not been approved by the Company’s shareholders, cash equal to the fair market value of one share as of the date on which the Restricted Stock Unit’s restricted period ends for each Restricted Stock Unit that vested;

or (ii) to the extent the Plan has been approved by the Company’s shareholders, one share for each Restricted Stock Unit that vested.

The Employment Agreement also contains certain termination, claw back, confidentiality and other customary provisions.

PATRIOT NATIONAL BANCORP, INC.

AND SUBSIDIARIES

Notes to consolidated financial statements

Certificate of Amendment

The preferences, limitations, powers and relative rights of the Series A Preferred Stock are set forth in the Certificate of Amendment of the Certificate of Incorporation of the Company (the “Certificate of Amendment”).

The Company has previously reported that, on March 13, 2025, the Company filed the Certificate of Amendment with the Secretary of State of the State of Connecticut.

The Certificate of Amendment designates 500,000 shares of Series A Preferred Stock.

As specified in the Certificate of Amendment, the Series A Preferred Stock have the following terms:

Holders of shares of issued and outstanding Series A Preferred Stock will be entitled to receive, when, as and if declared by the Board out of funds of the Company legally available therefor, non-cumulative dividends in arrears at the rate per annum of 10 % per share, payable semi-annually on April 1 and October 1 beginning on October 1, 2026.

Dividends will be payable, at the option of the Company, in cash or in kind through the issuance of additional shares of Series A Preferred Stock, provided, that if the shares of Series A Preferred Stock are converted into shares of Common Stock in full on or prior to October 1, 2026, then the holder of such share of Series A Preferred Stock will not have any right to receive any dividends on the Series A Preferred Stock.

Registration Rights Agreement

In connection with the closing of the Private Placement, the Company and the Purchasers will enter into a Registration Rights Agreement (the “Registration Rights Agreement”), under which the Company will be obligated to file a registration statement (and subsequent additional registration statements, as required) with the Securities and Exchange Commission (the “SEC”) to register for resale the shares of Common Stock to be issued in the Private Placement and the underlying shares of Common Stock into which the Series A Preferred Stock and non-voting Common Stock may be converted, as applicable.

The Registration Rights Agreement will obligate the Company to use its reasonable best efforts to file such initial registration statement no later than the sixtieth (60th) day following the closing of the Private Placement and to cause such registration statement or any subsequent additional registration statement to be declared effective by the SEC no later than the ninetieth (90th) day after the filing of such registration statement.

Collateral Requirement due to Downgrade

On February 11, 2025, the Bank received a notification from the FRBNY regarding a payment system risk (PSR) collateral requirement due to the Bank's downgrade to Group C.

Effective immediately, the Bank is required to maintain a PSR collateral amount of $ 24.4 million based on its non-wire debit activities.

The Bank currently holds approximately $ 69.9 million in unencumbered collateral with the FRBNY, sufficient to meet the new collateral requirement.

The FRBNY will reassess the collateral requirements quarterly and may adjust them based on changes in the Bank's financial services activities.

Changes to Master Account:

• Intraday Overdraft Capacity:

The Bank will no longer qualify for uncollateralized intraday credit but may request collateralized capacity, subject to FRBNY’s review.

• Transaction Processing:

FRBNY will reject transactions with insufficient funds, including Fedwire transfers, National Settlement Service transactions, and ACH credit items.

• Discount Window Borrowing:

The Bank will no longer be eligible for Primary Credit programs and will be considered under the Secondary Credit program.

• Cash Order Prefunding:

Prefunding of cash orders is required;

orders with insufficient funds will be rejected.

• Collateral Requirement:

The Bank must provide collateral security for obligations through its master account, reviewed quarterly.

• Collateral Pledged:

Additional haircuts on collateral will apply:

0 % for cash deposits and Treasury/Agency securities, 10 % for certain securities, 5 % for other securities, and 15 % for loans.

These changes do not have an immediate impact on the Bank's financial position or results of operations.

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.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data