PATRIOT NATIONAL BANCORP INC
For the period ended Dec 31, 2025. Filed Dec 31, 2025.
View on SEC.govAbout this filing
A notice of a major event between regular reports, such as results, a deal or a change of executives. It is often the first formal record of the news.
Dec 31, 2025 · Filed Dec 31, 2025
Use the contents to explore the available documents and sections.
Contents
EX-99.1 · 2. Execute
- Execute
Patriot is focused on building a scalable business designed to produce compelling financial returns over time. Our goal is to generate revenue (net of interest expense) that exceeds 4.5% of assets with a marginal efficiency ratio below 50%, while sustaining robust capital, liquidity, and risk‑management practices that support a safe and sound franchise across economic cycles. As our restructuring initiatives take hold and legacy issues are resolved, we believe the earnings potential of the platform will become increasingly evident in our reported results during 2026.
Patriot currently has three primary sources of revenue: (i) interest income from originated loans, (ii) interest income from purchased assets, and (iii) non-interest income.
| ● | Interest Income from Originated Loans: Patriot originates three primary types of loans: commercial real estate loans (CRE), high-net-worth lines of credit (C&I), and secured rediscount lines (C&I). Each of these loan programs originate floating rate loans tied to SOFR, the U.S. Treasury or the WSJ Prime Rate index that provide a sound interest rate risk profile with attractive asset-liability management features. Our loans typically include covenants that provide for default rates of interest, interest rate floors, and minimum deposit requirements. |
| ● | Interest Income from Purchased Assets: Our capital markets team is responsible for deploying excess liquidity into a diversified portfolio that may include government guaranteed securities, investment-grade private-label securities, and single-family residential mortgage loans. Patriot’s executive team has significant experience managing diverse credit portfolios and single-family residential mortgages. This provides the bank significant flexibility to generate net interest income without putting undue pressure on our loan origination function. Patriot will focus on the acquisition of homogenous, first-lien single-family mortgages, agency and government securities, and investment-grade private-label mortgage-backed securities and collateralized loan obligations. |
| ● | Non-Interest Income: Non-interest income is an important component of our profit engine. Patriot’s Institutional Banking division is currently the largest driver of non-interest income through its digital payments business. As the sponsor bank of fintech program managers, Patriot provides white-label debit and credit cards, ACH and money movement, and FDIC insurance to non-depository financial institutions and their customers. Since Patriot’s recapitalization, we have increased the bank’s annualized digital payments revenue by over 25%. |
Patriot’s revenue is offset principally by (i) deposit costs and (ii) non-interest expenses.
| ● | Deposit Costs: Patriot’s costs of deposits declined during 2025, from 3.7% in Q1 2025 to 3.25% by Q3 2025. This progress was attributable to several strategic decisions. First, Patriot refocused its lending activities solely on serving its depositors and now requires borrowers to maintain meaningful deposits at the bank. Second, Patriot re-mixed its deposit portfolio to provide more attractive deposit pricing to relationship-based accounts. Third, Patriot restructured its digital payments business to better deliver depository services and command improved pricing. Overall, Patriot targets an average cost of deposits to support a net interest margin (NIM) that exceeds 3.5%. |
| ● | Non-interest Expense: As assets grow, we expect Patriot’s operating margins to increase. Long-term, Patriot expects its business focus to shift from small retail branches to larger high-net-worth clients and the businesses that serve them. This more efficient model is expected to result in a meaningful decline in non-interest expenses as a percentage of assets. Similarly, we believe Patriot’s Institutional Banking division is highly scalable and able to grow deposits quickly through the institutional clients they serve. Patriot seeks to bring its non-interest expenses down to achieve a marginal efficiency ratio below 50%. |
Patriot returned to profitability in the latter part of 2025, and targets achieving profitability on a consolidated basis – inclusive of costs associated with its publicly traded holding company Patriot National Bancorp, Inc. (Ticker: PNBK) – in 2026. As the remaining legacy assets pay off or are diluted by Patriot’s new asset growth, we seek to deliver a positive return on average assets in 2026. A possible outcome of achieving sustained profitability is that it may enable Patriot to reverse its valuation allowance against, and recapture, its deferred tax asset.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.