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.

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. 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’s residential real estate loan portfolio consists primarily of purchased residential 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 addition, during the second quarter of 2024 Patriot began originating mortgage loans through its mortgage origination unit based Jacksonville, Florida. During the three and six months ended June 30, 2024, Patriot purchased $38,000 and $86,000 residential real estate loans, respectively. During the three and six months ended 2023, Patriot did not purchase any residential real estate 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 secured by business assets but are also occasionally offered on an unsecured basis. In granting these types of loans, Patriot considers the borrower’s cash flow as the primary source of repayment, supported by the value of collateral, if any, and personal guarantees, as applicable. 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 portfolio totaled $5.7 million at both June 30, 2024 and December 31, 2023. The syndicated and leveraged loan is included in the commercial and industrial loan classification and is comprised of loan transaction led by a major financial institution, which is the Agent Bank or Lead Arranger, and is referred to as a syndicated loan or "Shared National Credit (SNC)". The SNC loan was determined to be complementary to the Bank’s existing commercial and industrial loan portfolio and product offerings. Further originations in this loan class are not expected.

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 outstanding under this program at June 30, 2024 and December 31, 2023 totaled $32.3 million and $48.5 million, respectively. No loans were purchased under this program for three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, the Bank purchased $4.3 million and $13.6 million unsecured consumer loans, respectively.

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 June 30, 2024 and December 31, 2023 totaled $3.8 million and $4.3 million, respectively.

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.

Patriot originates SBA 7(a) loans, on which the SBA has historically provided guarantees of 75% of the principal balance. However, during the pandemic in 2021, 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. SBA loans are for the purpose of providing working capital, financing the purchase of equipment, inventory, or commercial real estate and for other business purposes. Loans are guaranteed by the businesses' major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. SBA loans held for investment are included in the commercial real estate loans and commercial and industrial loan classifications, which totaled $31.8 million and $30.0 million as of June 30, 2024 and December 31, 2023, respectively. During the six months ended June 30, 2024, $5.5 million SBA loans previously classified as held for sale were transferred to held for investment. No held for sale SBA loans were transferred to held for investment during the six months ended June 30, 2023.

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 $131,000 and $133,000 as of June 30, 2024 and December 31, 2023, respectively, which are included in the commercial and industrial loan classifications.

The Company adopted ASU 2016-13 on January 1, 2023, which introduced the current expected credit loss ("CECL") methodology for estimating all expected losses over the life of a financial asset. Under the CECL methodology, the ACL is measured on a collective basis for pools of loans with similar risk characteristics. For loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. 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 estimated credit losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.

The Company estimates expected credit losses for pooled loans using a modeling method that incorporates probability of default and loss given default. 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., CRE 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, which management elected to discount in part to reflect the expectation of slower voluntary prepayments in the face of an increasing interest rate environment.

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.

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. Commercial real estate lending is divided into Investment CRE and Owner-Occupied CRE. 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. 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. Repayment is dependent on the cash flow and successful operations of the business. Repayment of these loans may be adversely affected by conditions in the specific owner’s industry. Also, commercial real estate loans typically involve relatively large loan balances to a single borrower. Residential real estate lending risks are generally less significant than those of other loans. 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. Risk of default is assessed based on FICO scores, debt to income ratios, historical loss rates other common consumer loan metrics. For the pool of purchased unsecured consumer loans, the risk of default and necessary ACL is assessed on an individual loan basis using a customized model that heavily weights payment/delinquency status, FICO scores, and remaining loan life until maturity.

The Company maintains an ACL for credit losses on unfunded lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a drawdown on the commitment. 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 $235,000 at June 30, 2024 and $271,000 at December 31, 2023, respectively.


(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
Three Months Ended June 30, 2024
Allowance for credit losses:
March 31, 2024	$	5,620	$	671	$	1,199	$	6,280	$	7	$	—	$	—	$	13,777

Charge-offs	—		—		(404)		(1,849)		—		—		—		(2,253)
Recoveries	—		—		72		260		—		—		—		332
Provisions (credits)	2,338		7		348		442		(2)		—		—		3,133		(1)
June 30, 2024	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	—	$	14,989

Three Months Ended June 30, 2023
Allowance for credit losses:
March 31, 2023	$	9,809	$	853	$	1,799	$	12,251	$	21	$	47	$	—	$	24,780

Charge-offs	—		—		(4)		(2,516)		(150)		—		—		(2,670)
Recoveries	—		11		9		260		—		—		—		280
Provisions (credits)	230		163		(131)		1,280		162		4		—		1,708		(2)
June 30, 2023	$	10,039	$	1,027	$	1,673	$	11,275	$	33	$	51	$	—	$	24,098


(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
Six Months Ended June 30, 2024
Allowance for credit losses:
December 31, 2023	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	—	$	15,925
Impact of ASC 326 Adoption	—		—		—		—		—		—		—		—
Charge-offs	(158)		(21)		(814)		(4,372)		—		—		—		(5,365)
Recoveries	—		—		78		565		—		—		—		643
Provisions (credits)	2,027		92		682		1,097		1		(113)		—		3,786		(3)
June 30, 2024	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	—	$	14,989

Six Months Ended June 30, 2023
Allowance for credit losses:
December 31, 2022	$	6,966	$	665	$	1,403	$	1,207	$	24	$	10	$	35	$	10,310
Charge-offs	—		—		(6)		(4,312)		(150)		—		—		(4,468)
Recoveries	—		11		16		433		—		—		—		460
Provisions (credits)	1,447		162		41		2,970		163		12		—		4,795		(4)
June 30, 2023	$	10,039	$	1,027	$	1,673	$	11,275	$	33	$	51	$	—	$	24,098


(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Total
June 30, 2024
Allowance for credit losses:
Individually evaluated loans	$	5,717	$	—	$	—	$	—	$	—	$	—	$	5,717
Collectively evaluated loans	2,241		678		1,215		5,133		5		—		9,272
Total allowance for credit losses	$	7,958	$	678	$	1,215	$	5,133	$	5	$	—	$	14,989

Loans receivable, gross:
Individually evaluated loans	$	27,675	$	172	$	5,686	$	—	$	—	$	2,357	$	35,890
Collectively evaluated loans	430,881		99,247		129,058		77,397		3,829		—		740,412
Total loans receivable, gross	$	458,556	$	99,419	$	134,744	$	77,397	$	3,829	$	2,357	$	776,302


(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Total
December 31, 2023
Allowance for credit losses:
Individually evaluated for impairment	$	3,813	$	—	$	392	$	—	$	—	$	—	$	4,205
Collectively evaluated for impairment	2,276		607		877		7,843		4		113		11,720
Total allowance for credit losses	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	15,925

Loans receivable, gross:
Individually evaluated for impairment	$	12,775	$	—	$	3,904	$	—	$	454	$	—	$	17,133
Collectively evaluated for impairment	459,318		106,783		159,661		99,688		3,812		2,464		831,726
Total loans receivable, gross	$	472,093	$	106,783	$	163,565	$	99,688	$	4,266	$	2,464	$	848,859

Patriot employs a risk rating system as part of the risk assessment of its loan portfolio. At origination, credit officers are required to assign a risk rating to each loan in their portfolio, which is ratified or modified by the Loan Committee to which the loan is submitted for approval. If financial developments occur on a loan in the credit officer’s portfolio of responsibility, the risk rating is reviewed and adjusted, as applicable. 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.

Additionally, Patriot retains an independent third-party loan review firm to perform a semi-annual analysis of the results of its risk rating process. The semi-annual review is based on a randomly selected sample of loans within established parameters (e.g., value, concentration), in order to assess and validate the risk ratings assigned to individual loans. 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.

Charge-offs of loans to reduce the loan to its recoverable value that are solely collateral dependent, generally occur immediately upon confirmation of the partial loss amount. Loans that are cash flow dependent are modeled to reflect the expected cash flows through expected loan maturity, including any proceeds from refinancing or principal curtailment. A specific reserve is established for the amount by which the net investment in the loan exceeds the present value of discounted cash flows. Charge-offs on cash flow dependent loans also generally occur immediately upon confirmation of the partial loss amount. If either type of loan is classified as "Loss”, meaning full loss on the loan is expected, the full balance of the loan receivable is charged off, regardless of the potential recovery from a sale of the underlying collateral. Any amount that may be recovered on the sale of collateral underlying a loan is recognized as a “recovery” in the period in which the collateral is sold. In accordance with Federal Financial Institutions Examination Council published policies establishing uniform criteria for the classification of retail credit based on delinquency status, “Open-end” and “Closed-end” credits are charged off when 180 days and 90 days delinquent, respectively. Loans receivable that are part of the unsecured loan purchase program are charged-off in full when the loan is 90 days past due.


	Term of Loans by Origination
As of June 30, 2024:	2024		2023		2022		2021		2020		Prior		Revolving		Total Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	107,117	$	139,305	$	96,020	$	3,354	$	76,706	$	—	$	422,502
Special mention	—		—		6,461		901		—		445		—		7,807
Substandard	—		—		3,002		13,276		279		11,690		—		28,247
Total	—		107,117		148,768		110,197		3,633		88,841		—		458,556
Current period gross charge-offs	—		—		—		—		—		158		—		158
Residential Real Estate:
Pass	—		—		1,235		2,851		10,344		81,518		700		96,648
Special mention	—		—		—		—		1,053		1,416		—		2,469
Substandard	—		—		—		—		—		302		—		302
Total	—		—		1,235		2,851		11,397		83,236		700		99,419
Current period gross charge-offs	—		—		—		—		—		21		—		21
Commercial and Industrial:
Pass	678		1,591		14,917		21,394		1,064		8,215		77,076		124,935
Special mention	—		5		19		40		—		968		—		1,032
Substandard	—		268		622		844		5,725		1,214		104		8,777
Total	678		1,864		15,558		22,278		6,789		10,397		77,180		134,744
Current period gross charge-offs	—		—		—		—		—		814		—		814
Consumer and Other:
Pass	25		4,053		24,814		2,986		—		18,170		26,084		76,132

Substandard	—		112		386		23		—		429		315		1,265
Total	25		4,165		25,200		3,009		—		18,599		26,399		77,397
Current period gross charge-offs	—		185		3,812		375		—		—		—		4,372
Construction:
Pass	—		—		—		3,829		—		—		—		3,829


Total	—		—		—		3,829		—		—		—		3,829

Construction to Permanent - CRE:


Substandard	—		—		—		2,357		—		—		—		2,357
Total	—		—		—		2,357		—		—		—		2,357


Total loans	$	703	$	113,146	$	190,761	$	144,521	$	21,819	$	201,073	$	104,279	$	776,302
Total Current period gross charge-offs	$	—	$	185	$	3,812	$	375	$	—	$	993	$	—	$	5,365

Loans receivable, gross:
Pass	$	703	$	112,761	$	180,271	$	127,080	$	14,762	$	184,609	$	103,860	$	724,046
Special mention	—		5		6,480		941		1,053		2,829		—		11,308
Substandard	—		380		4,010		16,500		6,004		13,635		419		40,948
Total Loans receivable, gross	$	703	$	113,146	$	190,761	$	144,521	$	21,819	$	201,073	$	104,279	$	776,302
Current period gross charge-offs	$	—	$	185	$	3,812	$	375	$	—	$	993	$	—	$	5,365


	Term of Loans by Origination
As of December 31, 2023:	2023		2022		2021		2020		2019		Prior		Revolving		Total Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	104,683	$	138,091	$	111,308	$	3,401	$	31,832	$	63,526	$	—	$	452,841
Special mention	—		6,482		—		—		—		—		—		6,482
Substandard	—		1,799		—		280		10,000		691		—		12,770
Total	104,683		146,372		111,308		3,681		41,832		64,217		—		472,093
Current period gross charge-offs	—		—		—		—		6,341		5		—		6,346
Residential Real Estate:
Pass	—		1,251		2,975		11,577		15,770		74,596		614		106,783


Total	—		1,251		2,975		11,577		15,770		74,596		614		106,783
Current period gross charge-offs	—		—		—		—		—		515		—		515
Commercial and Industrial:
Pass	2,696		13,916		23,099		8,004		9,578		7,024		96,431		160,748
Special mention	6		348		—		—		37		11		104		506
Substandard	16		—		801		—		401		1,093		—		2,311
Total	2,718		14,264		23,900		8,004		10,016		8,128		96,535		163,565
Current period gross charge-offs	—		182		85		—		516		144		—		927
Consumer and Other:
Pass	6,470		36,668		4,724		—		5,590		14,314		30,945		98,711

Substandard	197		645		61		—		—		—		74		977
Total	6,667		37,313		4,785		—		5,590		14,314		31,019		99,688
Current period gross charge-offs	114		9,013		1,280		—		6		66		—		10,479
Construction:
Pass	—		—		3,812		—		—		—		—		3,812

Substandard	—		—		—		—		454		—		—		454
Total	—		—		3,812		—		454		—		—		4,266
Current period gross charge-offs	—		—		150		—		—		—		—		150
Construction to Permanent - CRE:

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

Total	—		—		2,464		—		—		—		—		2,464


Total loans	$	114,068	$	199,200	$	149,244	$	23,262	$	73,662	$	161,255	$	128,168	$	848,859
Total Current period gross charge-offs	$	114	$	9,195	$	1,515	$	—	$	6,863	$	730	$	—	$	18,417

Loans receivable, gross:
Pass	$	113,849	$	189,926	$	145,918	$	22,982	$	62,770	$	159,460	$	127,990	$	822,895
Special mention	6		6,830		2,464		—		37		11		104		9,452
Substandard	213		2,444		862		280		10,855		1,784		74		16,512
Loans receivable, gross	$	114,068	$	199,200	$	149,244	$	23,262	$	73,662	$	161,255	$	128,168	$	848,859
Total Current period gross charge-offs	$	114	$	9,195	$	1,515	$	—	$	6,863	$	730	$	—	$	18,417


(In thousands)	Performing (Accruing) Loans
As of June 30, 2024:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	7,540	$	6,748	$	—	$	14,288	$	404,989	$	419,277	$	3,225	$	422,502
Special mention	901		—		—		901		6,906		7,807		—		7,807
Substandard	589		—		1,178		1,767		2,029		3,796		24,451		28,247
	9,030		6,748		1,178		16,956		413,924		430,880		27,676		458,556
Residential Real Estate:
Pass	177		33		—		210		96,438		96,648		—		96,648
Special mention	—		—		—		—		2,469		2,469		—		2,469
Substandard	—		—		—		—		—		—		302		302
	177		33		—		210		98,907		99,117		302		99,419
Commercial and Industrial:
Pass	1,112		—		—		1,112		119,856		120,968		3,967		124,935
Special mention	—		—		—		—		1,032		1,032		—		1,032
Substandard	481		514		—		995		5,978		6,973		1,804		8,777
	1,593		514		—		2,107		126,866		128,973		5,771		134,744
Consumer and Other:
Pass	1,002		423		—		1,425		74,707		76,132		—		76,132
Substandard	—		—		—		—		—		—		1,265		1,265
	1,002		423		—		1,425		74,707		76,132		1,265		77,397
Construction:
Pass	—		—		—		—		3,829		3,829		—		3,829

Substandard	—		—		—		—		—		—		—		—
	—		—		—		—		3,829		3,829		—		3,829
Construction to Permanent - CRE:


Substandard	—		—		—		—		—		—		2,357		2,357
	—		—		—		—		—		—		2,357		2,357

Total	$	11,802	$	7,718	$	1,178	$	20,698	$	718,233	$	738,931	$	37,371	$	776,302

Loans receivable, gross:
Pass	$	9,831	$	7,204	$	—	$	17,035	$	699,819	$	716,854	$	7,192	$	724,046
Special mention	901		—		—		901		10,407		11,308		—		11,308
Substandard	1,070		514		1,178		2,762		8,007		10,769		30,179		40,948
Loans receivable, gross	$	11,802	$	7,718	$	1,178	$	20,698	$	718,233	$	738,931	$	37,371	$	776,302


(In thousands)	Performing (Accruing) Loans
As of December 31, 2023:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	2,274	$	231	$	—	$	2,505	$	448,707	$	451,212	$	1,629	$	452,841
Special mention	—		—		—		—		6,482		6,482		—		6,482
Substandard	—		—		—		—		1,624		1,624		11,146		12,770
	2,274		231		—		2,505		456,813		459,318		12,775		472,093
Residential Real Estate:
Pass	1,439		—		—		1,439		105,344		106,783		—		106,783


	1,439		—		—		1,439		105,344		106,783		—		106,783
Commercial and Industrial:
Pass	420		10		—		430		157,335		157,765		2,983		160,748
Special mention	—		348		—		348		158		506		—		506
Substandard	526		—		—		526		847		1,373		938		2,311
	946		358		—		1,304		158,340		159,644		3,921		163,565
Consumer and Other:
Pass	1,327		1,015		341		2,683		96,028		98,711		—		98,711
Substandard	—		—		—		—		—		—		977		977
	1,327		1,015		341		2,683		96,028		98,711		977		99,688
Construction:
Pass	—		—		—		—		3,812		3,812		—		3,812

Substandard	—		—		—		—		—		—		454		454
	—		—		—		—		3,812		3,812		454		4,266
Construction to Permanent - CRE:

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

	—		—		—		—		2,464		2,464		—		2,464

Total	$	5,986	$	1,604	$	341	$	7,931	$	822,801	$	830,732	$	18,127	$	848,859

Loans receivable, gross:
Pass	$	5,460	$	1,256	$	341	$	7,057	$	811,226	$	818,283	$	4,612	$	822,895
Special mention	—		348		—		348		9,104		9,452		—		9,452
Substandard	526		—		—		526		2,471		2,997		13,515		16,512
Loans receivable, gross	$	5,986	$	1,604	$	341	$	7,931	$	822,801	$	830,732	$	18,127	$	848,859


(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of June 30, 2024:
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	1,653	$	1,572	$	3,225	$	—	$	3,225
Substandard	—		581		1,306		1,887		22,564		24,451
Residential Real Estate:

Substandard	—		—		302		302		—		302
Commercial and Industrial:
Pass	—		2,568		906		3,474		493		3,967
Substandard	—		273		1,253		1,526		278		1,804
Consumer and Other:

Substandard	—		—		1,202		1,202		63		1,265



Construction to permanent - CRE:

Substandard	2,357		—		—		2,357		—		2,357
Total non-accruing loans	$	2,357	$	5,075	$	6,541	$	13,973	$	23,398	$	37,371

As of December 31, 2023:
Loan portfolio segment:
Commercial Real Estate:
Pass	$	—	$	—	$	1,629	$	1,629	$	—	$	1,629
Substandard	—		770		439		1,209		9,937		11,146



Commercial and Industrial:
Pass	—		—		2,054		2,054		929		2,983
Substandard	—		371		535		906		32		938
Consumer and Other:

Substandard	—		16		887		903		74		977
Construction:

Substandard	—		—		—		—		454		454
Total non-accruing loans	$	—	$	1,157	$	5,544	$	6,701	$	11,426	$	18,127

The accrual of interest on loans is discontinued at the time the loan is 90 days past due for payment unless the loan is well-secured and in process of collection. Consumer loans are typically charged off when they become 120 days past due (180 days for open ended consumer credit). Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual status or charged-off, at an earlier date, if collection of principal or interest is considered doubtful.

All interest accrued, but not collected for loans that are placed on non-accrual status or charged off, is reversed against interest income. The interest on these loans is generally accounted for on the cash-basis method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, future payments are reasonably assured, after at least six months of timely payment history. The Bank considers loans under $100,000 and consumer installment loans to be pools of smaller homogeneous loan balances, and therefore are collectively evaluated for impairment, and not individually measured for impairment.

If non-accrual loans had been performing in accordance with the original contractual terms, additional interest income (net of cash collected) of approximately $933,000 and $1.5 million would have been recognized during the three and six months ended June 30, 2024, respectively. During the three and six months ended June 30, 2023, additional interest income (net of cash collected) of approximately $133,000 and $268,000 would have been recognized, respectively.


(In thousands)	June 30, 2024						December 31, 2023
	Recorded Investment		Principal Outstanding		Related Allowance		Recorded Investment		Principal Outstanding		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	5,111	$	8,111	$	—	$	2,838	$	5,879	$	—
Residential Real Estate	172		171		—		—		—		—
Commercial and Industrial	5,685		10,611		—		2,266		2,899		—

Construction	—		—		—		454		461		—
Construction to permanent - CRE	2,357		2,476		—		—		—		—
	13,325		21,369		—		5,558		9,239		—
With a related allowance recorded:
Commercial Real Estate	22,564		23,197		5,717		9,937		10,137		3,813

Commercial and Industrial	1		1,388		—		1,638		3,159		392

	22,565		24,585		5,717		11,575		13,296		4,205

Individually evaluated loans, Total:
Commercial Real Estate	27,675		31,308		5,717		12,775		16,016		3,813
Residential Real Estate	172		171		—		—		—		—
Commercial and Industrial	5,686		11,999		—		3,904		6,058		392

Construction	—		—		—		454		461		—
Construction to permanent - CRE	2,357		2,476		—		—		—		—
Total	$	35,890	$	45,954	$	5,717	$	17,133	$	22,535	$	4,205


	Three Month Ended June 30,								Six Months Ended June 30,
(In thousands)	2024				2023				2024				2023
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	5,107	$	—	$	387	$	—	$	5,108	$	—	$	680	$	—
Residential Real Estate	172		8		748		24		172		8		992		27
Commercial and Industrial	5,026		23		2,046		68		4,513		27		2,181		150
Consumer and Other	—		—		128		—		—		—		293		—
Construction	—		—		579		—		—		—		993		—
Construction to permanent - CRE	2,411		—		—		—		2,433		—		—		—
	12,716		31		3,888		92		12,226		35		5,139		177
With a related allowance recorded:
Commercial Real Estate	22,763		159		10,405		—		22,942		159		10,651		154
Residential Real Estate	—		—		1,352		—		—		—		1,468		—
Commercial and Industrial	217		—		4,052		98		577		—		4,341		139
Consumer and Other	—		—		18		—		—		—		10		—


	22,980		159		15,827		98		23,519		159		16,470		293
Individually evaluated loans, Total:
Commercial Real Estate	27,870		159		10,792		—		28,050		159		11,331		154
Residential Real Estate	172		8		2,100		24		172		8		2,460		27
Commercial and Industrial	5,243		23		6,098		166		5,090		27		6,522		289
Consumer and Other	—		—		146		—		—		—		303		—
Construction	—		—		579		—		—		—		993		—
Construction to permanent - CRE	2,411		—		—		—		2,433		—		—		—
Total	$	35,696	$	190	$	19,715	$	190	$	35,745	$	194	$	21,609	$	470

Credit losses for loans that no longer 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 in excess of $100,000 as well as selected substandard loans. 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.

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. Performing loans are monitored to determine when, if at all, additional credit loss reserves may be required for a loss of underlying collateral value. For cash flow dependent loans, the Bank determined the reserve based on the present value of expected future cash flows discounted at the loan's effective interest rate.

On a case-by-case basis, Patriot may agree to modify the contractual terms of a borrower’s loan to assist customers who may be experiencing financial difficulty. Substantially all loan modifications involve lowering the monthly payments on such loans through either a reduction in interest rate below market rate, an extension of the term of the loan, or a combination of adjusting these two contractual attributes. Loan modifications may also result in the forgiveness of principal or accrued interest. In addition, when modifying commercial loans, Patriot frequently obtains additional collateral or guarantor support. If the borrower has performed under the existing contractual terms of the loan and Patriot’s underwriters determine that the borrower has the capacity to continue to perform under the terms of the loan, the loan continues accruing interest. 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 three and six months ended June 30, 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 three and six months ended June 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. As of June 30, 2024 and December 31, 2023, there were no commitments to advance additional funds under the modified loans.