PATRIOT NATIONAL BANCORP INCPNBK
PATRIOT NATIONAL BANCORP INC Debt Disclosure
Borrowings
As of December 31, 2025 and 2024, total borrowings were $16.4 million and $33.1 million, respectively. Borrowings consist primarily of FHLB advances, FRB borrowing, senior notes, subordinated notes, junior subordinated debentures and a note payable. The senior notes, subordinated notes, junior subordinated debentures contain affirmative covenants that require the Company to: maintain its and its subsidiaries’ legal entity and tax status, pay its income tax obligations on a timely basis, and comply with SEC and FDIC reporting requirements.
Federal Home Loan Bank borrowings
The Company is a member of the Federal Home Loan Bank of Boston ("FHLB-B"). Borrowings from the FHLB-B are limited to the lesser of a percentage of the value of qualified collateral or a percentage of the Bank’s total assets per the most recently-filed Call Report, as defined on the FHLB-B Statement of Products Policy. Qualified collateral, as defined, primarily consists of mortgage-backed securities and loans receivable that are required to be free and clear of liens and encumbrances, and may not be pledged for any other purposes.
As of December 31, 2025, the Company had $76.0 million in discounted value of pledged collateral with the FHLB-B. The maximum borrowing capacity is limited to the lesser of 15% of the Bank’s most recently reported Call Report total assets or the discount value of the pledged collateral. Accordingly, the Company’s maximum borrowing capacity with the FHLB-B is $76.0 million. 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 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 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
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
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
The Federal Reserve Bank of New York (“FRBNY”) accepts securities and loan pledges from qualifying depository institutions to secure borrowings from the Federal Reserve Discount Window (“Discount Window”). Patriot has pledged eligible securities and loans as collateral to support its borrowing capacity at the FRBNY. As of December 31, 2025, Patriot had pledged eligible securities and loans with a book value of $47.7 million, with a collateral value of $26.4 million. 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 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"). The program provided additional funding to eligible depository institutions, assuring they could meet the needs of all their depositors. The program served as an additional source of liquidity against high-quality securities, eliminating the need of an institution to quickly sell those securities in times of stress. The line allowed for a fixed rate borrowing for up to one year, with repayment permitted at any time without penalty. The BTFP ceased allowing any new advances after March 11, 2024. As of 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 zero, $2.3 million, and $1.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Senior notes
On December 22, 2016, the Company issued $12 million of senior notes (“2016 Senior Notes”) bearing interest at 7% per annum. On November 17, 2021, the original maturity date of the Senior Notes were extended from December 22, 2021 to June 30, 2022.
On June 22, 2022, the Company amended and restated the Senior Notes. The maturity date of the 2016 Senior Notes were further extended to December 31, 2022, and the interest rate increases from (i) 7% to 7.25% from July 1, 2022 until September 30, 2022 and (ii) from 7.25% to 7.50% thereafter. The 2016 Senior Notes were repaid in December 2022.
On December 21, 2022, the Company completed an issuance and sale of $12 million in aggregate principal amount of 8.50% fixed rate Senior Notes due January 15, 2026 (“2022 Senior Notes”). In connection with the issuance of the 2022 Senior Notes, the Company incurred $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
On June 29, 2018, the Company entered into certain subordinated note purchase agreements with two institutional accredited investors and completed a private placement of $10 million of fixed-to-floating rate subordinated notes with the maturity date of September 30, 2028 (the “Subordinated Notes”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.
The Subordinated Notes initially 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 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 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.
Trust preferred securities currently qualify for up to 6.8% of the Company’s Tier I Capital, with the excess qualifying as Tier 2 Capital.
The junior subordinated debentures are unsecured obligations of the Company. The debentures are subordinate and junior in right of payment to all present and future senior indebtedness of the Company. In addition to its obligations under the junior subordinated debentures and in conjunction with the Trust, the Company issued an unconditional guarantee of the trust preferred securities.
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. 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.
Note Payable
In September 2015, the Bank purchased the property in which its Fairfield, Connecticut branch is located for approximately $2.0 million, a property it had been leasing until that date. The purchase price was primarily satisfied by issuing the seller a $2.0 million, nine-year, promissory note bearing interest at a fixed rate of 1.75% per annum. 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.
Maturity of borrowings
At December 31, 2025, the contractual maturities of the Company’s borrowings in future periods were as follows:
| (In thousands) | ||||||||||||||||||||
| Year ending December 31, | Subordinated Notes | Junior Subordinated Debt | Total | |||||||||||||||||
| 2026 | $ | — | $ | — | $ | — | ||||||||||||||
| 2027 | — | — | — | |||||||||||||||||
| 2028 | 8,347 | — | 8,347 | |||||||||||||||||
| 2029 | — | — | — | |||||||||||||||||
| 2030 | — | — | — | |||||||||||||||||
| Thereafter | — | 8,248 | 8,248 | |||||||||||||||||
| Total of contractual maturities | 8,347 | 8,248 | 16,595 | |||||||||||||||||
| Unamortized debt issuance costs | (58) | (91) | (149) | |||||||||||||||||
| Balance at December 31, 2025 | $ | 8,289 | $ | 8,157 | $ | 16,446 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Mar 29, 2023 | |
| 2021 | Mar 24, 2022 | |
| 2020 | Mar 30, 2021 | |
| 2019 | Apr 29, 2020 | |
| 2018 | Apr 1, 2019 | |
| 2017 | Mar 30, 2018 | |
| 2016 | Mar 31, 2017 | |
| 2015 | Mar 31, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.