
	December 31,
(In thousands)	2023		2022
Loan portfolio segment:
Commercial Real Estate	$	472,093	$	437,443
Residential Real Estate	106,783		124,140
Commercial and Industrial	163,565		138,787
Consumer and Other	99,688		141,091
Construction	4,266		4,922
Construction to Permanent - CRE	2,464		1,933
Loans receivable, gross	848,859		848,316
Allowance for credit losses	(15,925)		(10,310)
Loans receivable, net	$	832,934	$	838,006

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 2023 and 2022, 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 portfolios totaled $5.7 million and $5.8 million at December 31, 2023 and 2022, 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. Further originations in this loan class are not expected.

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.

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 $15.4 million and $90.1 million for the year ended December 31, 2023 and 2022, respectively. Loans outstanding under this program totaled $48.5 million and $78.9 million as of December 31, 2023 and 2022, respectively.

The Company does not have any lending programs commonly referred to as subprime lending. 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.

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, 2023 and 2022 totaled $4.3 million and $4.9 million, respectively.

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.

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 $30.0 million and $32.5 million at December 31, 2023 and 2022, respectively.

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. 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.

As described in Note 1, “Summary of Significant Accounting Policies,” the Company adopted ASU 2016-13 on January 1, 2023, which introduced the 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 $271,000 at December 31, 2023.


(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
As of and for the year ended December 31, 2023
Allowance for credit losses:
December 31, 2022	$	6,966	$	665	$	1,403	$	1,207	$	24	$	10	$	35	$	10,310
Impact of 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	3,843		254		540		5,058		134		74		—		9,903		(1)
December 31, 2023	$	6,089	$	607	$	1,269	$	7,843	$	4	$	113	$	—	$	15,925

As of and for the year ended December 31, 2022
Allowance for loan and lease losses:
December 31, 2021	$	5,063	$	1,700	$	2,532	$	253	$	78	$	41	$	238	$	9,905
Charge-offs	—		—		(70)		(1,690)		(68)		—		—		(1,828)
Recoveries	154		4		69		121		—		—		—		348
(Credits) provisions	1,749		(1,039)		(1,128)		2,523		14		(31)		(203)		1,885
December 31, 2022	$	6,966	$	665	$	1,403	$	1,207	$	24	$	10	$	35	$	10,310

As of and for the year ended December 31, 2021
Allowance for loan and lease losses:
December 31, 2020	$	4,485	$	1,379	$	3,284	$	295	$	739	$	162	$	240	$	10,584
Charge-offs	(51)		(3)		(212)		(23)		(69)		—		—		(358)
Recoveries	—		3		65		111		—		—		—		179
Provisions (credits)	629		321		(605)		(130)		(592)		(121)		(2)		(500)
December 31, 2021	$	5,063	$	1,700	$	2,532	$	253	$	78	$	41	$	238	$	9,905


(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
December 31, 2023
Allowance for credit losses:
Individually evaluated loans	$	3,813	$	—	$	392	$	—	$	—	$	—	$	—	$	4,205
Collectively evaluated loans	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 loans	$	12,775	$	—	$	3,904	$	—	$	454	$	—	$	—	$	17,133
Collectively evaluated loans	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


(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
December 31, 2022
Allowance for loan and lease losses:
Individually evaluated for impairment	$	5,430	$	5	$	608	$	—	$	—	$	—	$	—	$	6,043
Collectively evaluated for impairment	1,536		660		795		1,207		24		10		35		4,267
Total allowance for loan losses	$	6,966	$	665	$	1,403	$	1,207	$	24	$	10	$	35	$	10,310

Loans receivable, gross:
Individually evaluated for impairment	$	11,241	$	2,508	$	4,653	$	514	$	—	$	—	$	—	$	18,916
Collectively evaluated for impairment	426,202		121,632		134,134		140,577		4,922		1,933		—		829,400
Total loans receivable, gross	$	437,443	$	124,140	$	138,787	$	141,091	$	4,922	$	1,933	$	—	$	848,316

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 expert to perform a quarterly 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.

•Substandard: An asset is classified “substandard” if it is not adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. 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.

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 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
	104,683		146,372		111,308		3,681		41,832		64,217		—		472,093
Residential Real Estate:
Pass	—		1,251		2,975		11,577		15,770		74,596		614		106,783


	—		1,251		2,975		11,577		15,770		74,596		614		106,783
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
	2,718		14,264		23,900		8,004		10,016		8,128		96,535		163,565
Consumer and Other:
Pass	6,470		36,668		4,724		—		5,590		14,314		30,945		98,711

Substandard	197		645		61		—		—		—		74		977
	6,667		37,313		4,785		—		5,590		14,314		31,019		99,688
Construction:
Pass	—		—		3,812		—		—		—		—		3,812

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

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

	—		—		2,464		—		—		—		—		2,464

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

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


(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)	Performing (Accruing) Loans
As of December 31, 2022:	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	$	—	$	—	$	—	$	—	$	401,313	$	401,313	$	—	$	401,313
Special mention	—		—		—		—		24,559		24,559		—		24,559
Substandard	330		—		—		330		—		330		11,241		11,571
	330		—		—		330		425,872		426,202		11,241		437,443
Residential Real Estate:
Pass	330		—		—		330		120,715		121,045		—		121,045
Special mention	—		—		—		—		625		625		—		625
Substandard	—		—		—		—		—		—		2,470		2,470
	330		—		—		330		121,340		121,670		2,470		124,140
Commercial and Industrial:
Pass	2		—		230		232		131,092		131,324		—		131,324
Special mention	—		—		—		—		597		597		—		597
Substandard	1,488		412		—		1,900		133		2,033		4,833		6,866
	1,490		412		230		2,132		131,822		133,954		4,833		138,787
Consumer and Other:
Pass	929		3,175		925		5,029		135,990		141,019		—		141,019
Substandard	—		—		—		—		23		23		49		72
	929		3,175		925		5,029		136,013		141,042		49		141,091
Construction:
Pass	895		—		—		895		3,503		4,398		—		4,398
Special mention	—		—		—		—		524		524		—		524
	895		—		—		895		4,027		4,922		—		4,922
Construction to Permanent - CRE:
Pass	—		—		—		—		1,933		1,933		—		1,933
	—		—		—		—		1,933		1,933		—		1,933

Total	$	3,974	$	3,587	$	1,155	$	8,716	$	821,007	$	829,723	$	18,593	$	848,316

Loans receivable, gross:
Pass	$	2,156	$	3,175	$	1,155	$	6,486	$	794,546	$	801,032	$	—	$	801,032
Special mention	—		—		—		—		26,305		26,305		—		26,305
Substandard	1,818		412		—		2,230		156		2,386		18,593		20,979
Loans receivable, gross	$	3,974	$	3,587	$	1,155	$	8,716	$	821,007	$	829,723	$	18,593	$	848,316


(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 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

As of December 31, 2022:
Loan portfolio segment:
Commercial Real Estate:
Substandard	$	—	$	—	$	11,241	$	11,241	$	—	$	11,241
Residential Real Estate:
Substandard	657		—		1,796		2,453		17		2,470
Commercial and Industrial:
Substandard	46		395		3,196		3,637		1,196		4,833
Consumer and Other:
Substandard	—		—		27		27		22		49
Total non-accruing loans	$	703	$	395	$	16,260	$	17,358	$	1,235	$	18,593

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 installment loans are typically charged off no later than 180 days past due. 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 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, which are collectively evaluated for credit losses.


(In thousands)	December 31, 2023								December 31, 2022
	Recorded Investment			Principal Outstanding			Related Allowance		Recorded Investment			Principal Outstanding			Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	2,838		$	5,879		$	—	$	2,435		$	2,428		$	—
Residential Real Estate	—			—			—		2,402			2,224			—
Commercial and Industrial	2,266			2,899			—		1,939			2,424			—
Consumer and Other	—			—			—		514			514			—
Construction	454			461			—		—			—			—
	5,558			9,239			—		7,290			7,590			—
With a related allowance recorded:
Commercial Real Estate	$	9,937		$	10,137		$	3,813	$	8,806		$	8,656		$	5,430
Residential Real Estate	—			—			—		106			105			5
Commercial and Industrial	1,638			3,159			392		2,714			2,863			608

	11,575			13,296			4,205		11,626			11,624			6,043

Individually evaluated loans, Total:
Commercial Real Estate	$	12,775		$	16,016		$	3,813	$	11,241		$	11,084		$	5,430
Residential Real Estate	—			—			—		2,508			2,329			5
Commercial and Industrial	3,904			6,058			392		4,653			5,287			608
Consumer and Other	—			—			—		514			514			—
Construction	454		—	461		—	—		—		—	—		—	—
Total	$	17,133		$	22,535		$	4,205	$	18,916		$	19,214		$	6,043


	Year Ended December 31,
(In thousands)	2023				2022				2021
	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	$	1,164	$	181	$	5,702	$	87	$	7,636	$	103
Residential Real Estate	534		—		2,925		35		4,014		51
Commercial and Industrial	2,580		5		748		63		2,548		12
Consumer and Other	158		—		464		23		702		16
Construction	753		34		—		—		—		—
	5,189		220		9,839		208		14,900		182
With a related allowance recorded:
Commercial Real Estate	$	12,957	$	696	$	8,307	$	113	$	8,869	$	66
Residential Real Estate	1,156		—		107		6		109		5
Commercial and Industrial	3,359		214		3,348		28		2,234		126

	17,472		910		11,762		147		11,212		197
Individually evaluated loans, Total:
Commercial Real Estate	$	14,121	$	877	$	14,009	$	200	$	16,505	$	169
Residential Real Estate	1,690		—		3,032		41		4,123		56
Commercial and Industrial	5,939		219		4,096		91		4,782		138
Consumer and Other	158		—		464		23		702		16
Construction	753		34		—		—
Total	$	22,661	$	1,130	$	21,601	$	355	$	26,112	$	379

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 year ended December 31, 2023, 2022 and 2021, 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, 2023, 2022 and 2021 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. As of December 31, 2023 and 2022, there were no commitments to advance additional funds under the modified loans.