PATRIOT NATIONAL BANCORP INC (PNBK) Business

ITEM 1. Business

General

Patriot National Bancorp, Inc. (exclusive of its subsidiaries, “PNBK” or the “Holding Company”) is a Connecticut corporation and a registered bank holding company. The Holding Company’s principal asset is Patriot Bank, N.A., a national banking association headquartered in Stamford, Connecticut (the “Bank”) and its other wholly owned subsidiaries are Patriot National Statutory Trust I and PinPat Acquisition Corporation (collectively with PNBK and Bank, the “Company”, “we”, “us”, or “our”). The Bank, a member of the Federal Reserve System (the “Federal Reserve”), operates under a national bank charter issued by the Office of the Comptroller of the Currency (“OCC”), and its deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to applicable limits.

The Company’s common stock is listed on the Nasdaq Global Market under the symbol “PNBK.” As of December 31, 2025, the Company’s only material operating business is the ownership and operation of the Bank.

The Bank commenced operations in 1994 and, as of December 31, 2025, operated eight branch offices, including seven branches in Connecticut and one branch in New York. In addition to its branch network, the Bank serves clients through relationship-based banking, treasury management, institutional banking, and digital banking channels.

2025 Transformation and Strategic Repositioning

During 2025, the Company undertook a substantial transformation of its capital structure, governance, management team, and business strategy. The Company completed significant capital raising transactions during 2025, restructured certain outstanding debt obligations, and reconstituted senior management and the Board of Directors. These actions were part of a broader repositioning of the Bank’s business model, operating infrastructure, and risk management framework.

In January 2025, the Bank entered into a Formal Agreement with the OCC (the “Formal Agreement”) that required the Bank to take specified actions to strengthen capital, strategic planning, governance, risk management, and other aspects of its risk, compliance and operations. The Formal Agreement has materially influenced the Bank’s activities during 2025 and is expected to continue to influence management priorities in 2026, including capital planning, remediation efforts, policy enhancements, management reporting, and the pacing and scope of business line development. The Bank’s strategic plan and capital plan were developed in part to address deficiencies identified through supervisory processes and to support the Bank’s operation in a safe and sound manner while the Formal Agreement remains in effect.

As part of this repositioning, the Bank reviewed its legacy products, exited or curtailed certain non-core activities, enhanced its enterprise risk management and reporting capabilities, and refocused its business on targeted customer segments and products that management believes are better aligned with the Bank’s risk appetite and long-term strategy.

Business Strategy

The Bank is repositioning its business model to focus on relationship-driven banking and specialized financial services for selected customer segments. As reflected in the Bank’s strategic plan, the Bank’s principal target client segments are:

•entrepreneurs, investors, business leaders, and the businesses and advisors who serve them;

•digital payments and related institutional banking clients, including program managers, financial technology companies, and payment processors; and

•underbanked but creditworthy individuals and businesses in the Bank’s market areas.

The Bank’s strategy is intended to align its products, service model, capital deployment, and risk management framework with these target segments. The Bank continues to retain certain deposit (e.g., retail) and lending relationships with legacy customers from prior to the March 2025 recapitalization (its “Legacy Business”). The Legacy Business is anticipated to reduce over time as a percentage of the Bank’s overall loans and deposits. Management’s strategic repositioning has included narrowing or eliminating certain Legacy Business, redesigning product offerings, enhancing relationship management capabilities, and investing in operational, compliance, and reporting infrastructure.

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Lending Activities

The Bank’s lending activities have been refocused on products that management believes are consistent with the Bank’s strategic direction and risk appetite. During 2025, the Bank reduced or exited certain legacy or non-core lending activities and began emphasizing a more focused set of lending programs. The strategic plan identifies commercial real estate lending, high-net-worth and business lines of credit, and rediscount or other asset-secured lending facilities among the lending activities the Bank expects to emphasize.

Commercial real estate lending is generally now focused on relationship-based originations for borrowers with established or expected deposit relationships. The Bank also seeks to offer secured and unsecured credit facilities to high-net-worth individuals, entrepreneurs, and businesses, including lines of credit that may be supported by marketable securities, real estate, business assets, or other collateral. In addition, the Bank is developing rediscount and related asset-backed financing capabilities for certain institutional and high net worth client relationships.

The Bank has also historically purchased certain loans and investment assets as part of balance sheet management and liquidity deployment. Management’s current strategy contemplates more selective use of purchased assets and investments, including residential mortgage-related assets and government, agency, and investment-grade securities, subject to capital, liquidity, concentration, and risk management considerations.

Deposit Products and Treasury Management

The Bank offers traditional deposit products for consumer and commercial customers, including demand deposits, noninterest-bearing and interest-bearing checking accounts, money market accounts, savings accounts, certificates of deposit, individual retirement accounts, and health savings accounts. The Bank also offers treasury management and transaction services, including online and mobile banking, ACH services, wire transfers, debit card services, remote deposit capture, and other cash management tools.

As part of its repositioning, the Bank is seeking to increase relationship-based deposits from target clients, including high-net-worth households, family offices, private businesses, fiduciaries, nonprofit organizations, non-depository financial institutions, and institutional clients. Management has also emphasized deposit pricing, service enhancements, and treasury management capabilities intended to support more durable and relationship-oriented funding sources.

Institutional Banking and Digital Payments

The Bank’s institutional banking activities include services provided to financial technology companies, program managers, non-depository financial institutions, lenders, and other businesses that seek a banking partner for deposits, loans, payments, transaction accounts, card-related services, treasury management, and other banking solutions. The Bank views this line of business as an important source of deposits and fee income.

Through its digital payments activities, the Bank provides or supports services such as ACH and money movement, debit and credit card program sponsorship, settlement-related services, and FDIC-insured deposit account functionality for program relationships. Because these activities can involve elevated operational, compliance, fraud, liquidity, and Bank Secrecy Act / anti-money laundering (BSA/AML) risk, the Bank is enhancing associated controls, policies, staffing, and reporting as part of its broader remediation and risk management initiatives.

Investment Securities

In the normal course of business, the Bank invests a portion of its assets in investment securities to manage liquidity, interest rate risk, and earnings. The investment portfolio may include U.S. Treasury securities, government agency securities, mortgage-backed securities, and certain investment-grade private-label securities or other permissible investments. Management’s stated strategy emphasizes liquidity, diversification, and capital preservation, while aligning investment activity with the Bank’s capital, liquidity, and interest rate risk management objectives.

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Market Area and Offices

The Bank’s branch office locations are summarized as follows:

In addition to its branch network, the Bank has its headquarters in Stamford, CT (separate from the Stamford branch location). The Bank also maintains a banking office in Beverly Hills, California that supports relationship development and client coverage in the Los Angeles market. This office opened in the first quarter of 2026.

The Bank’s primary historical markets are the Tri-State area of Connecticut, New York and New Jersey. The Bank also serves clients beyond its branch footprint through its relationship banking, institutional banking, and digital payments activities.

Employees

As of December 31, 2025, the Company had 107 full-time employees. None of the Company’s employees are represented by a collective bargaining agreement.

During 2025, the Company substantially reconstituted its senior management team and added personnel in key functions, including executive management, risk management, operations, finance, accounting, treasury management, technology, legal, compliance, and relationship management. Management believes these personnel changes are an important part of the Bank’s remediation and strategic repositioning efforts.

Competition

The Bank operates in a highly competitive environment and competes with national, regional, and community banks, as well as non-bank financial institutions, financial technology firms, private lenders, and other providers of financial services. Many of these competitors have substantially greater financial, technological, operational, and marketing resources than the Bank.

The Bank seeks to compete through relationship-based service, specialized deposit and lending solutions, treasury management capabilities, institutional banking services, and an operating model designed to serve targeted customer segments that management believes have banking needs that the Bank can offer with attractive risk-adjusted returns that remain unmet by their traditional banking partners.

Supervision and Regulation

The Company and the Bank are subject to extensive federal regulation, supervision and examination.

Patriot National Bancorp, Inc., as a bank holding company, is subject to regulation and supervision by the Board of Governors of the Federal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHC Act”). Patriot Bank, N.A., as a national banking association, is subject primarily to regulation, supervision and examination by the OCC. The Bank’s deposits are insured by the FDIC up to applicable limits, and the Bank is also subject to certain applicable regulations of the FDIC and the Federal Reserve.

Federal banking laws and regulations affect, among other things, the scope of the Company’s and the Bank’s business, capital requirements, liquidity management, lending limits, branching, dividend payments, transactions with affiliates, consumer compliance, community reinvestment, and BSA/AML compliance. These laws and regulations are intended primarily for the

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protection of depositors, the Deposit Insurance Fund, and the banking system as a whole, rather than for the protection of shareholders.

Bank Holding Company Regulation

As a bank holding company, the Company is subject to the BHC Act and to supervision, regulation and examination by the Federal Reserve. The BHC Act limits the activities of bank holding companies and their subsidiaries and generally requires Federal Reserve approval before a bank holding company may acquire ownership or control of more than 5% of the voting shares of another bank or bank holding company, acquire substantially all of the assets of such an institution, or merge with another bank holding company, subject to certain exceptions.

The Company is also subject to Federal Reserve capital requirements and policy guidance, including policies requiring bank holding companies to serve as a source of financial and managerial strength to their subsidiary banks. In addition, the Federal Reserve has authority to restrict or prohibit certain actions of a bank holding company, including the payment of dividends, if such actions would constitute an unsafe or unsound practice or would violate law, regulation, regulatory order, or supervisory condition.

Bank Regulation

The Bank is a national bank and is subject to the supervision, regulation and examination of the OCC. The OCC has broad enforcement authority over national banks, including the power to impose restrictions, conditions, civil money penalties, and other corrective measures where warranted. The Bank is also subject to certain provisions of the Federal Reserve Act and applicable FDIC regulations and requirements.

The Bank’s operations are subject to numerous laws and regulations, including requirements relating to permissible activities, loans to one borrower, insider transactions, real estate lending standards, reserves, liquidity, fiduciary activities where applicable, information security, vendor management, and other operational and compliance matters. The Bank is also subject to laws and regulations designed to protect consumers and prohibit unfair, deceptive or abusive acts or practices, unlawful discrimination, and other improper conduct in the offering of financial products and services.

Formal Agreement

On January 17, 2025, the Bank entered into a Formal Agreement with the OCC. The Formal Agreement requires the Bank to take specified actions to strengthen capital, governance, strategic planning, risk management, internal controls, management reporting, and other aspects of its operations.

The Formal Agreement materially influenced the Bank’s activities during 2025 and is expected to continue to influence management priorities in 2026. Among other things, the Formal Agreement has affected the Bank’s remediation efforts, policy development, internal reporting, capital planning, risk management framework, and the pacing and scope of certain business initiatives. The Bank’s strategic plan, capital plan, and various governance and risk management enhancements were developed or implemented in part in response to supervisory requirements and related remediation efforts.

Failure to satisfy the requirements of the Formal Agreement, or to otherwise address supervisory concerns in a timely and satisfactory manner, could result in additional supervisory or enforcement actions, restrictions on the Bank’s activities, or other adverse consequences. For additional information regarding risks relating to the Formal Agreement and related supervisory matters, see “Item 1A. Risk Factors.”

Capital Requirements

The Company and the Bank are each subject to regulatory capital requirements administered by their respective banking regulators. The Company is subject to capital requirements and supervision by the Federal Reserve, and the Bank is subject to capital requirements and supervision by the OCC and, as applicable, the FDIC. These capital rules establish minimum requirements for leverage and risk-based capital ratios and, for banking organizations subject to the risk-based capital framework, include a capital conservation buffer. Failure to meet applicable capital requirements can result in restrictions on capital distributions, discretionary bonus payments, growth, and other activities.

Federal regulations require insured depository institutions, including national banks, to satisfy minimum capital standards in order to be deemed adequately capitalized under the prompt corrective action framework. These standards include minimum ratios for

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common equity Tier 1 capital, Tier 1 capital, total capital, and Tier 1 leverage capital. Institutions that do not satisfy applicable standards may become subject to increasingly stringent supervisory restrictions.

The Bank currently reports its regulatory capital under the risk-based capital framework. For regulatory capital purposes, common equity Tier 1 capital generally consists of common shareholders’ equity and retained earnings, subject to specified deductions and adjustments. Tier 1 capital generally consists of common equity Tier 1 capital plus qualifying additional Tier 1 capital instruments. Total capital generally consists of Tier 1 capital plus qualifying Tier 2 capital instruments, which may include qualifying subordinated debt and a limited portion of the allowance for credit losses, and certain other qualifying capital elements, in each case subject to applicable regulatory limitations. Tier 1 leverage capital generally consists of Tier 1 capital as a percentage of average total consolidated assets, subject to applicable adjustments. The Bank has elected to opt out of including most components of accumulated other comprehensive income in common equity Tier 1 capital.

In addition to minimum capital requirements, banking organizations subject to the risk-based capital rules must maintain a capital conservation buffer composed of common equity Tier 1 capital in excess of minimum risk-based capital requirements. Limitations on capital distributions and certain discretionary bonus payments may apply if the required buffer is not maintained.

In January 2025, the Bank entered into the Formal Agreement which, among other things, established specified capital-related requirements and has influenced the Bank’s capital planning and related business activities. The Company’s capital actions during 2025 were undertaken in part to strengthen capital and support the Bank’s compliance with regulatory and supervisory expectations. The strategic plan also reflects that strengthening capital and liquidity was a central objective of management’s 2025-2027 planning process.

For additional information regarding regulatory capital, including the Company’s and the Bank’s actual capital ratios, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Dividends and Source of Strength

The principal source of funds available to the Holding Company to pay dividends to shareholders and service obligations is dividends from the Bank. The ability of the Bank to pay dividends is subject to applicable law, regulatory guidance, and supervisory considerations, including capital levels, earnings, financial condition, and approval or non-objection requirements in certain circumstances.

As a bank holding company, the Holding Company is expected to act as a source of financial and managerial strength to the Bank. Accordingly, the Holding Company may be expected to commit capital and other resources to support the Bank, including at times when the Holding Company may not otherwise be inclined to do so.

Federal Reserve policy generally provides that a bank holding company should pay dividends only out of earnings and only if the prospective rate of earnings retention is consistent with the organization’s capital needs, asset quality, and overall financial condition. The Federal Reserve may restrict the ability of the Company to pay dividends or repurchase stock if doing so would be inconsistent with safety and soundness or applicable law, regulation, supervisory guidance, or regulatory orders.

Community Reinvestment Act

The Bank is subject to the Community Reinvestment Act (“CRA”), which requires federal banking regulators to evaluate the Bank’s record of helping to meet the credit needs of the communities it serves, including low- and moderate-income neighborhoods, consistent with safe and sound operations. A bank’s CRA performance is considered in connection with certain applications to engage in expansionary or other activities requiring regulatory approval. In 2025, the Bank received a Satisfactory CRA rating from the OCC.

Bank Secrecy Act and Anti-Money Laundering Compliance

The Bank is subject to the Bank Secrecy Act, the USA PATRIOT Act, and other anti-money laundering laws and regulations. These laws and regulations require the Bank to maintain a risk-based program reasonably designed to prevent the Bank from being used for money laundering, terrorist financing, and other illicit activity. Such requirements include customer identification

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and due diligence, suspicious activity monitoring and reporting, sanctions compliance, and other internal controls and reporting obligations.

Because certain of the Bank’s institutional banking and digital payments activities may involve heightened operational, compliance, fraud, and anti-money laundering risk, these areas have been a focus of control enhancements, staffing, reporting, and supervisory attention. The Bank has been enhancing associated controls, policies, and oversight as part of its broader remediation and risk management initiatives. Management specifically identifies BSA/AML risk management and enterprise risk management enhancements among the Bank’s remediation priorities.

Other Regulatory Matters

The Company and the Bank are also subject to other laws and regulations relating to consumer financial protection, privacy, data security, electronic banking, incentive compensation practices, transactions with affiliates, insider lending, and safety and soundness standards, among other matters. Changes in laws, regulations, supervisory expectations, or agency interpretations could affect the Company’s and the Bank’s business, financial condition, results of operations, and growth prospects.

For additional information regarding the effect of government regulation on the Company and the Bank, see “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Available Information

The Company’s website address is https://www.bankpatriot.com; however, information found on, or that can be accessed through, the website is not incorporated by reference into this Form 10-K. The Company makes available free of charge on its website (under the links entitled “For Investors”, then “SEC filings”, then “Documents”), its annual report on Form 10-K, its quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act, as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.