PATRIOT NATIONAL BANCORP INC (Form: 10KSB, Received: 03/25/2005 06:09:02)

U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 - KSB

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2004

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to ____________________

Commission file number 000-29599

PATRIOT NATIONAL BANCORP, INC.

(Name of small business issuer in its charter)

Connecticut (State or other jurisdiction of incorporation or organization)	06-1559137 (IRS Employer Identification Number)
900 Bedford Street Stamford, Connecticut	06901
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number	(203) 324-7500

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $2.00 per share

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

State issuer’s revenue for its most recent fiscal year: $ 21,380,455

Aggregate market value of the voting stock held by nonaffiliates of the registrant as of February 28, 2005 based on the last sale price as reported on the NASDAQ Small Cap Market: $ 28,887,830 .

Number of shares of the registrant’s Common Stock, par value $2.00 per share, outstanding as of February 28, 2005: 2,486,391.

Documents Incorporated by Reference

Proxy Statement for 2005 Annual	Incorporated into Part III of this
Meeting of Shareholders. (A definitive	Form 10-KSB
proxy statement will be filed with the
Securities and Exchange Commission
within 120 days after the close of the
fiscal year covered by this Form 10-KSB.)

Transitional Small Business Disclosure Format (check one):

Yes

No X

Table of Contents

	Page

Part I

Item 1. Description of Business	1

Item 2. Description of Properties	8

Item 3. Legal Proceedings	8

Item 4. Submission of Matters to a Vote of Security Holders	8

Part II

Item 5. Market for Common Equity, Related Shareholder Matters and Small Business Issuer Purchases of Equity Securities	8

Item 6. Management’s Discussion and Analysis or Plan of Operation	11

Item 7. Financial Statements	27

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	28

Item 8A. Controls and Procedures	28

Item 8B. Other Information	28

Part III

Item 9. Directors and Executive Officers of the Registrant	28

Item 10. Executive Compensation	29

Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Matters	29

Item 12. Certain Relationships and Related Transactions	29

Item 13. Exhibits, Lists and Reports on Form 8-K	29

Item 14. Principal Accountant Fees and Services	31

PART I

Item 1. Description of Business

Patriot National Bancorp, Inc. (“ Bancorp ”), a Connecticut corporation, was organized in 1999 for the purpose of becoming a one-bank holding company (the “ Reorganization ”) for Patriot National Bank, a national banking association headquartered in Stamford, Fairfield County, Connecticut (the “ Bank ”). Following receipt of regulatory and shareholder approvals, the Reorganization became effective as of the opening of business on December 1, 1999. Upon consummation of the Reorganization, each outstanding share of Common Stock, par value $2.00 per share, of the Bank (“ Bank Common Stock ”), was converted into the right to receive one share of Common Stock, par value $2.00 per share, of Bancorp (“ Bancorp Common Stock ”), and each outstanding option or warrant to purchase Bank Common Stock became an option or warrant to purchase an equal number of shares of Bancorp Common Stock.

The Bank was granted preliminary approval by the Comptroller of the Currency (the “OCC” ) on March 5, 1993. It received its charter and commenced operations as a national bank on August 31, 1994. Since then, the Bank has opened branch offices in Greenwich and Old Greenwich, Connecticut in 1997 and 1999, respectively, two branch offices in Norwalk, Connecticut, one in 2001 and a second in 2003, a second Stamford location in 2003, two branch offices in Wilton, Connecticut, one in 2003 and a second in 2004, and a branch office in Darien, Connecticut in 2004. The Bank recently received regulatory approval to open two branch offices, one in Southport, Connecticut and one in Greenwich, Connecticut.

On June 30, 1999, the Bank through its wholly-owned subsidiary, PinPat Acquisition Corporation, acquired all of the outstanding capital stock of Pinnacle Financial Corp., a Connecticut corporation, Pinnacle Financial Corp., a New Jersey corporation, and Pinnacle Financial Corp., a New York corporation (collectively, “ Pinnacle ”), a residential mortgage broker. Pinnacle surrendered its mortgage licenses and the mortgage brokerage business of Pinnacle is now conducted through the Patriot National Bank Residential Lending Group ( “Residential Lending Group” ), a division of the Bank. PinPat Acquisition Corporation is presently an inactive subsidiary of the Bank.

On March 11, 2003, Bancorp formed Patriot National Statutory Trust I (the “Trust”) for the sole purpose of issuing trust preferred securities and investing the proceeds in subordinated debentures issued by Bancorp. Bancorp primarily invested the funds from the issuance of the debt in the Bank, which in turn used the proceeds to fund general operations of the Bank.

As of the date hereof, the only business of Bancorp is its ownership of all of the issued and outstanding capital stock of the Bank and the Trust. Except as specifically noted otherwise herein, the balance of the description of Bancorp’s business is a description of the Bank’s business.

The Bank conducts business at its main office located at 900 Bedford Street, Stamford, Connecticut and at branch offices located at 838 High Ridge Road, Stamford, Connecticut, 100 Mason Street, Greenwich, Connecticut, 184 Sound Beach Avenue, Old Greenwich,

Connecticut, 16 River Street and 365 Westport Avenue in Norwalk, Connecticut, One Danbury Road and 5 River Road in Wilton, Connecticut and 800 Post Road in Darien, Connecticut. The Bank also operates mortgage origination offices at 1177 Summer Street, Stamford, Connecticut and 20 Broad Hollow Road, Melville, New York.

The Bank offers a broad range of consumer and commercial banking services with an emphasis on serving the needs of individuals, small and medium-sized businesses and professionals. The Bank offers consumer and commercial deposit accounts that include: checking accounts, interest-bearing “NOW” accounts, insured money market accounts, time certificates of deposit, savings accounts and IRA’s (Individual Retirement Accounts). Other services include money orders, traveler’s checks, ATM’s (automated teller machines), internet banking and debit cards. In addition, the Bank may in the future offer Keogh accounts and other financial services. The Bank does not currently accept brokered deposits.

The Bank offers commercial real estate and construction loans to area businesses and developers. Real estate loans made to individuals include home mortgages, home improvement loans, bridge loans and home equity lines of credit. Other personal loans include lines of credit, installment loans and credit cards. Commercial loans offered to small and medium-sized businesses include secured and unsecured loans to service companies, real estate developers, manufacturers, restaurants, wholesalers, retailers and professionals doing business in the region. The Bank offers residential mortgages through its Residential Lending Group. The Residential Lending Group solicits and processes mortgage loan applications from consumers on behalf of permanent investors and originates loans for sale.

The Bank competes with a variety of financial institutions in its market area. Most have greater financial resources and capitalization, which gives them higher lending limits and the ability to conduct larger advertising campaigns to attract business. Generally the larger institutions offer services such as trust and international banking which the Bank is not equipped to offer directly. When the need arises, arrangements are made with correspondent institutions to provide such services. In the future, if the Bank desires to offer trust services, prior approval of the OCC will be required. To attract business in this competitive environment, the Bank relies on local promotional activities and personal contact by officers, directors and shareholders and on its ability to offer personalized services.

The customer base of the Bank is diversified so that there is not a concentration of either loans or deposits within a single industry, a group of industries, a single person or groups of people. The Bank is not dependent on one or a few major customers for either its deposit or lending activities, the loss of any one of which would have a material adverse effect on the business of the Bank.

Residents and businesses in Stamford, Greenwich, Norwalk, Wilton and Darien, Connecticut provide the majority of the Bank’s deposits. The Bank has focused its attention on serving the segments of its market area historically served by community banks. The Bank competes in its market by providing a high level of personalized and responsive banking service for which the Bank believes there is a need. This area is bordered by New York State to the west, the Town of Ridgefield to the north, the Town of Westport to the east, and the Long Island Sound to the south.

The Bank’s loan customers extend beyond Stamford, Greenwich, Norwalk, Wilton and Darien to include nearby towns in Fairfield County, Connecticut, and towns in Westchester County, New York, although the Bank’s loan business is not necessarily limited to these areas. The Bank’s mortgage brokerage business is concentrated in the areas surrounding its loan origination offices. While the Bank does not currently hold or intend to attract significant deposit or loan business from major corporations with headquarters in the Fairfield County area, the Bank believes that the service, professional and related busi-nesses which have been attracted to this area, as well as the individuals that reside in this area, represent current and potential customers of the Bank.

In the normal course of business and subject to applicable government regulations, the Bank invests a portion of its assets in investment securities, which may include certain debt and equity securities, including government securities. An objective of the Bank’s investment policy is to seek to optimize its return on assets while limiting its exposure to interest rate movements and to maintain adequate levels of liquidity.

The Bank’s employees perform most routine day-to-day banking transactions at the Bank. However, the Bank has entered into a number of arrangements with third parties for banking services such as correspondent banking, check clearing, data processing services, credit card processing and armored carrier service.

The cities of Stamford and Norwalk and the towns of Greenwich, Wilton and Darien are presently served by approximately 151 branches of commercial banks and savings banks, most of which are offices of banks which have headquarters outside of the state or area or are subsidiaries of bank or financial holding companies whose headquarters are outside of the areas served by the Bank. In addition to banks with branches in the same areas as the Bank, there are numerous banks and financial institutions serving the communities surrounding these areas, which also draw customers from Stamford, Greenwich, Norwalk, Wilton and Darien, posing significant competition to the Bank for deposits and loans. Many of such banks and financial institutions are well established and well capitalized.

In recent years, intense market demands, economic pressures and significant legislative and regulatory actions have eroded banking industry classifications which were once clearly defined and have increased competition among banks, as well as other financial institutions. This increase in competition has caused banks and other financial service institutions to diversify their services and become more cost effective as a result of competition with one another and with new types of financial service companies, including non-bank competitors. The impact on Bancorp of federal legislation authorizing increased services by financial holding companies and interstate branching of banks has resulted in increased competition. These events have resulted in increasing homogeneity in the financial services offered by banks and other financial institutions. The impact on banks and other financial institutions of these market dynamics and legislative and regulatory changes has been increased customer awareness of product and service differences among competitors and increased merger activity.

As a bank holding company, Bancorp’s operations are subject to regulation, supervision and examination by the Board of Governors of the Federal Reserve Board (the “ Federal Reserve

Board ”). The Federal Reserve Board has established capital adequacy guidelines for bank holding companies that are similar to the OCC’s capital guidelines applicable to the Bank. The Bank Holding Company Act of 1956, as amended (the “ BHC Act ”), limits the types of companies that a bank holding company may acquire or organize and the activities in which it or they may engage. In general, bank holding companies and their subsidiaries are only permitted to engage in, or acquire direct control of, any company engaged in banking or in a business so closely related to banking as to be a proper incident thereto. Federal legislation enacted in 1999 authorizes certain entities to register as financial holding companies. Registered financial holding companies are permitted to engage in businesses, including securities and investment banking businesses, which are prohibited to bank holding companies. While the creation of financial holding companies is evolving, to date there has been no significant impact on Bancorp.

Under the BHC Act, Bancorp is required to file annually with the Federal Reserve Board a report of its operations. Bancorp, the Bank and any other subsidiaries are subject to examination by the Federal Reserve Board. In addition, Bancorp will be required to obtain the prior approval of the Federal Reserve Board to acquire, with certain exceptions, more than 5% of the outstanding voting stock of any bank or bank holding company, to acquire all or substantially all of the assets of a bank or to merge or consolidate with another bank holding company. Moreover, Bancorp, the Bank and any other subsidiaries are prohibited from engaging in certain tying arrangements in connection with any extension of credit or provision of any property or services. The Bank is also subject to certain restrictions imposed by the Federal Reserve Act on issuing any extension of credit to Bancorp or any of its subsidiaries or making any investments in the stock or other securities thereof and on the taking of such stock or securities as collateral for loans to any borrower. If Bancorp wants to engage in businesses permitted to financial holding companies but not to bank holding companies, it would need to register with the Federal Reserve Board as a financial holding company.

The Federal Reserve Board has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the Federal Reserve Board’s view that a bank holding company should pay cash dividends only to the extent that bank holding company’s net income for the past year is sufficient to cover both the cash dividend and a rate of earnings retention that is consistent with the bank holding company’s capital needs, asset quality and overall financial condition. The Federal Reserve Board has also indicated that it would be inappropriate for a company experiencing serious financial problems to borrow funds to pay dividends. Furthermore, under the prompt corrective action regulations adopted by the Federal Reserve Board pursuant to applicable law, the Federal Reserve Board may prohibit a bank holding company from paying any dividends if the bank holding company’s bank subsidiary is classified as “undercapitalized.”

A bank holding company is required to give the Federal Reserve Board prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of its consolidated retained earnings. The Federal Reserve Board may disapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe or unsound practice or would violate

any law, regulation, Federal Reserve Board order, or any condition imposed by, or written agreement with, the Federal Reserve Board.

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, (“ Riegle-Neal Act ”) was enacted to ease restrictions on interstate banking. Effective September 29, 1995, the Riegle-Neal Act allows the Federal Reserve Board to approve an application of an adequately capitalized and adequately managed bank holding company to acquire control of, or acquire all or substantially all of the assets of, a bank located in a state other than such holding company’s state, without regard to whether the transaction is prohibited by the laws of any state. The Federal Reserve Board may not approve the acquisition of a bank that has not been in existence for the minimum time period (not exceeding five years) specified by the statutory law of the host state. The Riegle-Neal Act also prohibits the Federal Reserve Board from approving an application if the applicant (and its depository institution affiliates) controls or would control more than 10% of the insured deposits in the United States or 30% or more of the deposits in the target bank’s home state or in any state in which the target bank maintains a branch. The Riegle-Neal Act does not affect the authority of states to limit the percentage of total insured deposits in the state which may be held or controlled by a bank or bank holding company to the extent that such limitation does not discriminate against out-of-state banks or bank holding companies. Individual states may also waive the 30% statewide concentration limits contained in the Riegle-Neal Act.

Bancorp is subject to capital adequacy rules and guidelines issued by the OCC, the Federal Reserve Board and the Federal Deposit Insurance Corporation (“ FDIC ”), and the Bank is subject to capital adequacy rules and guidelines issued by the OCC. These substantially identical rules and guidelines require Bancorp to maintain certain minimum ratios of capital to adjusted total assets and/or risk-weighted assets. Under the provisions of the Federal Deposit Insurance Corporation Improvements Act of 1991, the Federal regulatory agencies are required to implement and enforce these rules in a stringent manner. Bancorp is also subject to applicable provisions of Connecticut law insofar as they do not conflict with, or are not otherwise preempted by, Federal banking law.

Bancorp is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act” ), and, in accordance with the Exchange Act, files periodic reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC” ).

The Bank’s operations are subject to regulation, supervision and examination by the OCC and the FDIC.

Federal and state banking regulations regulate, among other things, the scope of the business of a bank, a bank holding company or a financial holding company, the investments a bank may make, deposit reserves a bank must maintain, the nature and amount of collateral for certain loans a bank makes, the establishment of branches and the activities of a bank with respect to mergers and acquisitions. The Bank is a member of the Federal Reserve System and is subject to applicable provisions of the Federal Reserve Act and regulations thereunder. The Bank is subject to the federal regulations promulgated pursuant to the Financial Institutions Supervisory

Act to prevent banks from engaging in unsafe and unsound practices, as well as various other federal and state laws and consumer protection laws. The Bank is also subject to the comprehensive provisions of the National Bank Act.

The OCC regulates the number and locations of the branch offices of a national bank. The OCC may only permit a national bank to maintain branches in locations and under the conditions imposed by state law upon state banks. At this time, applicable Connecticut banking laws do not impose any material restrictions on the establishment of branches by Connecticut banks throughout Connecticut.

The earnings and growth of Bancorp, the Bank and the banking industry are affected by the monetary and fiscal policies of the United States Government and its agencies, particularly the Federal Reserve Board. The Open Market Committee of the Federal Reserve Board implements national monetary policy to curb inflation and combat recession. The Federal Reserve Board uses its power to adjust interest rates in United States Government securities, the Discount Rate and deposit reserve retention rates. The actions of the Federal Reserve Board influence the growth of bank loans, investments and deposits. They also affect interest rates charged on loans and paid on deposits. The nature and impact of any future changes in monetary policies cannot be predicted.

In addition to other laws and regulations, Bancorp and the Bank are subject to the Community Reinvestment Act (“ CRA” ), which requires the Federal bank regulatory agencies, when considering certain applications involving Bancorp or the Bank, to consider Bancorp’s and the Bank’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods. The CRA was originally enacted because of concern over unfair treatment of prospective borrowers by banks and over unwarranted geographic differences in lending patterns. Existing banks have sought to comply with CRA in various ways; some banks have made use of more flexible lending criteria for certain types of loans and borrowers (consistent with the requirement to conduct safe and sound operations), while other banks have increased their efforts to make loans to help meet identified credit needs within the consumer community, such as those for home mortgages, home improvements and small business loans. For example, this may include participation in various government insured lending programs, such as Federal Housing Administration insured or Veterans Administration guaranteed mortgage loans, Small Business Administration loans, and participation in other types of lending programs such as high loan-to-value ratio conventional mortgage loans with private mortgage insurance. To date, the market area from which the Bank draws much of its business is Stamford, Greenwich, Norwalk, Wilton and Darien, which are characterized by a very diverse ethnic, economic and racial cross-section of the population. As the Bank expands further, the market areas served by the Bank will continue to evolve. Bancorp and the Bank have not and will not adopt any policies or practices, which discourage credit applications from, or unlawfully discriminate against, individuals or segments of the communities served by the Bank.

On October 26, 2001, the United and Strengthening America by Providing Tools Required to Intercept and Obstruct Terrorism Act of 2001, or the USA Patriot Act, was enacted to further strengthen domestic security following the September 11, 2001 attacks. This Act amends various federal banking laws, particularly the Bank Secrecy Act with the intent to curtail money

laundering and other activities that might be undertaken to finance terrorist actions. The Act also requires that financial institutions in the United States enhance already established anti-money laundering policies, procedures and audit functions and ensure that controls are reasonably designed to detect instances of money laundering through certain correspondent or private banking accounts. Verification of customer identification, maintenance of said verification records and cross checking names of new customers against government lists of known or suspected terrorists is also required.

On July 20, 2002, the Sarbanes-Oxley Act of 2002 was enacted, the primary purpose of which is to protect investors through improved corporate governance and responsibilities of and disclosures by public companies. The Act contains provisions for the limitations of services that external auditors may provide as well as requirements for the credentials of Audit Committee members. In addition, the principal executive and principal financial officers are required to certify in quarterly and annual reports that they have reviewed the report; and based on the officers’ knowledge, the reports accurately present the financial condition and results of operations of the company and contain no untrue statement or omission of material fact. The officers also certify their responsibility for establishing and maintaining a system of internal controls which insure that all material information is made known to the officers; this certification also includes the evaluation of the effectiveness of disclosure controls and procedures and their impact upon financial reporting. Section 404 of the Act entitled Management Assessment of Internal Controls, requires that each annual report include an internal control report which states that it is the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting, as well as an assessment by management of the effectiveness of the internal control structure and procedures for financial reporting. This section further requires that the external auditors attest to, and report on, the assessment made by management. On March 2, 2005, the SEC extended the Section 404 compliance dates for non-accelerated filers (those issuers with non-affiliated public float of less than $75 million) to fiscal years ending on or after July 16, 2006. Due to the burdens on smaller companies in designing and implementing compliance with this section, this one year extension will provide smaller companies, such as Bancorp, with the necessary opportunity to more thoroughly evaluate their systems of internal controls.

Bancorp does not anticipate that compliance with applicable federal and state banking laws will have a material adverse effect on its business or the business of the Bank. Neither Bancorp nor the Bank has any material patents, trademarks, licenses, franchises, concessions and royalty agreements or labor contracts, other than the charter granted to the Bank by the OCC. The Bank has, however, registered the trademark “Patriot” and the corresponding logo with the State of Connecticut Trademark Office. Compliance by Bancorp and the Bank with federal, state and local provisions which have been enacted or adopted regulating or otherwise relating to the discharge of material into the environment is not expected to have a material effect upon the capital expenditures, earnings or competitive position of Bancorp.

As of December 31, 2004, Bancorp had 102 full-time employees and 8 part-time employees. None of the employees of Bancorp is covered by a collective bargaining agreement.

Item 2. Description of Properties

Patriot National Bancorp Inc.’s corporate headquarters and main branch banking office is located at 900 Bedford Street in Stamford, Connecticut. The building is leased by the Bank as are its eight other branch banking offices and two mortgage origination offices; the Bank also leases space at its main office for additional parking. Lease commencement dates for office locations range from January 1, 2001 to September 1, 2004 and lease expiration dates fall between March 31, 2005 and October 15, 2014. Subsequent to December 31, 2004 the Bank entered into a lease for a new branch location with a lease expiration date of March 22, 2015. In addition, the Bank is in the process of negotiating a lease for a New York mortgage origination office to replace the lease expiring March 31, 2005. Most of the leases contain rent escalation provisions as well as renewal options for one or more periods.

The Bank has sublet and licensed excess space in two of its locations to an attorney. See also, “Item 12. Certain Relationships and Related Transactions.”

All leased properties are in good condition.

Item 3. Legal Proceedings

Neither Bancorp nor the Bank has any pending legal proceedings, other than ordinary routine litigation incidental to its business, to which Bancorp or the Bank is a party or any of its property is subject.

Item 4. Submission of Matters to a Vote of Security Holders

During the fourth quarter of 2004, no matter was submitted to a vote of shareholders.

PART II

Item 5. Market for Common Equity, Related Shareholder Matters and Small Business Issuer

Purchases of Equity Securities

Market Information

Bancorp Common Stock is traded on the NASDAQ Small Cap Market under the Symbol “PNBK.” On December 31, 2004, the last sale price for Bancorp Common Stock on NASDAQ Small Cap Market was $18.40.

The following table sets forth the high and low sales price and dividends per share of Bancorp Common Stock for the last two fiscal years for each quarter as reported on the NASDAQ Small Cap Market.

	2004								2003

	Sales Price					Cash Dividends Declared			Sales Price					Cash Dividends Declared
Quarter Ended	High		Low			Cash Dividends Declared		High			Low			Cash Dividends Declared
March 31	$	16.25		$	12.49	$	0.030		$	10.56		$	9.50	$	0.025
June 30		15.25			14.03		0.035			10.80			9.10		0.030
September 30		14.99			13.51		0.035			11.45			9.65		0.030
December 31		18.60			14.01		0.035			12.50			10.76		0.030

Holders

There were approximately 761 shareholders of record of Bancorp Common Stock as of December 31, 2004.

Dividends

2001 marked the first year in which Bancorp paid a dividend on Bancorp Common Stock; since then, the Company has consistently paid dividends.

Bancorp’s ability to pay future dividends on its Common Stock depends on the Bank’s ability to pay dividends to Bancorp. In accordance with OCC rules and regulations, the Bank may continue to pay dividends only if the total amount of all dividends that will be paid, including the proposed dividend, by the Bank in any calendar year does not exceed the total of the Bank’s retained net income of that year to date, combined with the retained net income of the preceding two years, unless the proposed dividend is approved by the OCC. In addition, the OCC and/or the FDIC may impose further restrictions on dividends. Future dividends depend on many factors, including management’s estimates of future earnings and Bancorp’s need for capital.

Recent Sales of Unregistered Securities

During the fourth quarter of 2004 Bancorp did not have any sales of unregistered securities.

Purchases of Equity Securities by the Small Business Issuer and Affiliated Purchasers

During the fourth quarter of 2004 there were no such purchases of Bancorp Common Stock.

Securities Authorized for Issuance under Equity Compensation Plans

The following table presents information as of December 31, 2004 for equity compensation plans maintained by Bancorp.

Equity Compensation Plan Information

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	110,000	$10.13	-
Equity compensation plans not approved by security holders	-	-	-
Total	110,000	$10.13	-

Item 6. Management’s Discussion and Analysis or Plan of Operation

Patriot National Bancorp, Inc

Financial Highlights


	2004		2003		2002		2001		2000

Operating Data

Interest and dividend income	$	18,678,251	$	15,214,702	$	12,604,718	$	13,722,943	$	14,694,135
Interest expense		7,008,508		5,588,255		4,764,693		6,866,960		8,017,615
Net interest income		11,669,743		9,626,447		7,840,025		6,855,983		6,676,520
Provision for loan losses		556,000		563,000		468,000		250,000		325,900
Noninterest income		2,702,204		4,813,740		4,113,820		3,509,955		2,685,296
Noninterest expense		12,256,550		11,659,467		9,812,838		8,675,551		7,693,345
Net income		926,397		1,340,720		1,052,007		876,387		767,171

Basic income per share		0.38		0.56		0.44		0.37		0.34
Diluted income per share		0.37		0.55		0.43		0.36		0.33
Dividends per share		0.135		0.115		0.095		0.060		-

Balance Sheet Data

Cash and due from banks		6,670,409		4,023,732		5,385,757		7,544,242		3,656,071
Federal funds sold		37,500,000		15,000,000		3,000,000		12,700,000		29,500,000
Short term investments		11,460,057		10,430,939		3,348,968		6,788,569		-
Investment securities		78,258,775		92,330,533		61,720,716		35,816,880		34,073,832
Loans, net		263,874,820		214,420,528		170,794,939		135,680,036		126,411,265
Total assets		405,046,955		342,469,049		248,496,753		202,569,457		197,628,127
Total deposits		367,005,325		289,992,182		217,911,260		183,263,939		179,666,098
Total borrowings		16,248,000		31,301,385		10,292,675		839,280		945,270
Total shareholders’ equity		19,756,434		18,779,913		18,544,955		17,406,016		16,427,436

(a)	Plan of Operation

Not applicable since Bancorp has had revenues from operations in each of the last two fiscal years.

(b)	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Summary

Bancorp’s subsidiary, Patriot National Bank, celebrated its ten year anniversary on August 31, 2004. In addition, the Bank established two new branch banking offices during 2004; the first located in Darien, Connecticut opened in July 2004 and the second located in Wilton, Connecticut opened in November 2004.

Bancorp reported earnings of $926,000 ($0.38 basic income per share and $0.37 diluted income per share) for 2004 compared to $1,341,000 ($0.56 basic income per share and $0.55 diluted income per share) for 2003. Total assets ended the year at a new record high of $405.0 million, an increase of $62.5 million from December 31, 2003.

Net interest income for the year ended December 31, 2004 increased $2.1 million or 21.2% to $11.7 million as compared to $9.6 million for the year ended December 31, 2003.

Total assets increased by 18.3% during the year as total loans increased from $214.4 million at December 31, 2003 to $263.9 million at December 31, 2004. The available for sale securities portfolio decreased $14.3 million or 15.8% to $76.3 million from $90.6 million at December 31, 2003. Loan growth was funded primarily through deposit growth. Deposits increased $77.0 million to $367.0 million at December 31, 2004; interest bearing deposits increased $64.9 million, or 25.0%, and non-interest bearing deposits increased $12.1 million or 39.7%. Borrowings decreased $15.1 million due mainly to the payoff of certain FHLB advances and a repurchase agreement. The exercise of stock warrants combined with the increase in retained earnings from net income, net of dividend payments, partially offset by the increase in other comprehensive loss from unrealized losses on the available for sale securities portfolio, resulted in an increase of $977 thousand in shareholders’ equity.

FINANCIAL CONDITION

Assets

Bancorp’s total assets increased $62.5 million or 18.3% from $342.5 million at December 31, 2003 to $405.0 million at December 31, 2004. The growth in total assets was funded primarily by deposit growth of $77.0 million partially offset by decreases in borrowings of $15.1 million. Federal funds sold increased $22.5 million; cash and due from banks and short term investments increased $2.6 million and $1.0 million, respectively.

Investments

The following table is a summary of Bancorp’s investment portfolio at December 31 for the years shown.


	2004		2003		2002
U. S. Government Agency and
Sponsored Agency Obligations	$	14,823,295	$	11,865,618	$	9,129,414
Mortgage-backed securities		52,446,180		66,696,465		38,461,159
Corporate bonds		-		-		383,797
Marketable equity securities		9,000,000		12,000,000		12,643,996
Federal Reserve Bank stock		692,600		691,150		481,050
Federal Home Loan Bank stock		1,296,700		1,077,300		621,300
Total Investments	$	78,258,775	$	92,330,533	$	61,720,716

Total investments decreased $14.1 million to $78.3 million due primarily to principal payments on mortgage-backed securities and redeemed money market preferred equity instruments exceeding new investment purchases. During the fourth quarter of 2004, the Bank redeployed excess liquidity into the purchase of adjustable rate residential mortgage loans in place of additional investment purchases. The Bank is a member of the Federal Home Loan Bank of Boston which provides an additional source of liquidity.

The following table presents the maturity distribution of available for sale investment securities at December 31, 2004 and the weighted average yield of such securities. The weighted average yields were calculated on the amortized cost and effective yields to maturity of each security.

	One year or less		Over one through five years		Over five through ten years		Over ten years		No maturity		Total		Weighted Average Yield

U.S. Government Agency and Sponsored Agency obligations	$	-	$	14,000,000	$	1,000,000	$	-	$	-	$	15,000,000		3.47%
Mortgage-backed securities		-		-		-		-		52,903,731		52,903,731		4.09%
Money market preferred equity securities		-		-		-		-		9,000,000		9,000,000		2.34%
Total	$	-	$	14,000,000	$	1,000,000	$	-	$	61,903,731	$	76,903,731		3.76%
Weighted average yield		-%		3.40%		4.38%		-%		3.83%		3.76%

The following table presents a summary of investments for any issuer that exceeds 10% of shareholders’ equity at December 31, 2004.

	Amortized		Fair
	Cost		Value
Available for sale securities :
U.S. Government Agency and Sponsored
Agency Obligations	$	15,000,000	$	14,823,295
U.S. Government Agency mortgage-backed securities		52,903,731		52,446,180

Short term investments :
Merrill Lynch Premier Institutional Fund		11,460,057		11,460,057

Loans

The following table is a summary of Bancorp’s loan portfolio at December 31 for the years shown.


	2004			2003			2002
Real Estate
Commercial	$	106,771,441		$	96,339,220		$	65,967,205
Residential		36,965,661			21,772,759			27,012,024
Construction		74,598,919			57,122,445			39,208,651
Commercial		17,562,523			15,532,902			13,021,909
Consumer installment		1,386,709			1,861,924			1,757,321
Consumer home equity		30,874,894			25,607,775			26,812,092
Total Loans		268,160,147			218,237,025			173,779,202
Premiums		313,754			-			-
Net deferred fees		(1,117,556	)		(881,822	)		(611,809	)
Allowance for loan losses		(3,481,525	)		(2,934,675	)		(2,372,454	)
Loans, net	$	263,874,820		$	214,420,528		$	170,794,939

Bancorp’s net loan portfolio increased $49.5 million or 23.1% from $214.4 million at December 31, 2003 to $263.9 million at December 31, 2004. Included in the growth of the loan portfolio for 2004 is the purchase during the fourth quarter of $13.1 million in residential mortgage loans. Loan growth was funded through an increase in total deposits. At December 31, 2004, the net loan to deposit ratio was 71.9% and the net loan to asset ratio was 65.2%. At December 31, 2003, the net loan to deposit ratio was 73.9%, and the net loan to asset ratio was 62.6%.

During an historic environment of lower interest rates, loan activity continued to remain strong and the volume of new loans far exceeded principal reductions and payoffs.

Maturities and Sensitivities of Loans to Changes in Interest Rates

The following table presents the maturities of loans in Bancorp’s portfolio at December 31, 2004, by type of loan:

			Due after
	Due in		one year
	one year		through		Due after
(thousands of dollars)	or less		five years		five years		Total
Commercial real estate	$	10,797	$	38,263	$	57,712	$	106,772
Residential real estate		6,047		3,757		27,162		36,966
Construction loans		46,391		28,207		-		74,598
Commercial loans		7,209		9,695		659		17,563
Consumer installment		1,219		167		-		1,386
Consumer home equity		93		4,732		26,050		30,875
Total	$	71,756	$	84,821	$	111,583	$	268,160

Fixed rate loans	$	5,242	$	21,454	$	10,796	$	37,492
Variable rate loans		66,514		63,367		100,787		230,668
Total	$	71,756	$	84,821	$	111,583	$	268,160

The following table presents loan concentrations at December 31, 2004:

				Dollars
Category	Percentage			Outstanding
	(thousands of dollars)
Construction		27.8	%		$ 74,598
Commercial Retail		8.0	%		21,420
Commercial Residential Rental		5.2	%		13,987

Critical Accounting Policies

In the ordinary course of business, Bancorp has made a number of estimates and assumptions relating to reporting results of operations and financial condition in preparing its financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. The Company believes the following discussion addresses Bancorp’s only critical accounting policy, which is the policy that is most important to the presentation of Bancorp’s financial results. This policy requires management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are considered impaired. A risk rating system is utilized to measure the adequacy of the general component of the allowance for loan losses. Under this system, each loan is assigned a risk rating between one and nine, which has a corresponding loan loss factor assigned, with a rating of “one” being the least risk and a rating of “nine” reflecting the most risk or a complete loss. Risk ratings are assigned by the originating loan officer or loan committee at the initiation of the transactions and are reviewed and changed, when necessary during the life of the loan. Loan loss reserve factors are multiplied against the balances in each risk rating category to arrive at the appropriate level for the allowance for loan losses. Loans assigned a risk rating of “six” or above are monitored more closely by the credit administration officers. The unallocated portion of the allowance reflects management’s estimate of probable but undetected losses inherent in the portfolio; such estimates are influenced by uncertainties in economic conditions, delays in obtaining information, including unfavorable information about a borrower’s financial condition, difficulty in identifying triggering events that correlate perfectly to subsequent loss rates, and risk factors that have not yet manifested themselves in loss allocation factors. Loan quality control is continually monitored by management subject to oversight by the board of directors through its members who serve on the loan committee and is also reviewed by the full board of directors on a monthly basis. The methodology for determining the adequacy of the allowance for loan losses is consistently applied; however, revisions may be made to the methodology and assumptions based on historical information related to charge-off and recovery experience and management’s evaluation of the current loan portfolio.

Based upon this evaluation, management believes the allowance for loan losses of $3.5 million, at December 31, 2004, which represents 1.31% of gross loans outstanding, is adequate, under prevailing economic conditions, to absorb losses on existing loans. At December 31, 2003, the allowance for loan losses was $2.9 million or 1.35% of gross loans outstanding.

The accrual of interest income on loans is discontinued whenever reasonable doubt exists as to its collectibility and generally is discontinued when loans are past due 90 days, based on contractual terms, as to either principal or interest. When the accrual of interest income is discontinued, all previously accrued and uncollected interest is reversed against interest income.

The accrual of interest on loans past due 90 days or more, including impaired loans, may be continued if the loan is well secured, and it is believed all principal and accrued interest income due on the loan will be realized, and the loan is in the process of collection. A non-accrual loan is restored to an accrual status when it is no longer delinquent and collectibility of interest and principal is no longer in doubt.

Management considers all non-accrual loans and restructured loans to be impaired. In most cases, loan payments that are past due less than 90 days, based on contractual terms, are considered minor collection delays and the related loans are not considered to be impaired. The Bank considers consumer installment loans to be pools of smaller balance homogeneous loans, which are collectively evaluated for impairment.

Analysis of Allowance for Loan Losses

	2004		2003		2002		2001		2000
	(thousands of dollars)
Balance at beginning of period	$	2,934	$	2,372	$	1,894	$	1,645	$	1,360
Charge-offs		(9)		(1)		-		(2)		(44)
Recoveries		-		-		10		1		3
Net (charge-offs) recoveries		(9)		(1)		10		(1)		(41)
Additions charged to operations		556		563		468		250		326
Balance at end of period	$	3,481	$	2,934	$	2,372	$	1,894	$	1,645
Ratio of net (charge-offs) recoveries
during the period to average loans
outstanding during the period		(0.00%)		(0.00%)		0.01%		(0.00%)		(0.03%)

Allocation of the Allowance for Loan Losses

											Percent of loans in each
	Amounts (thousands of dollars)										category to total loans
Balance at end of each period applicable to	2004		2003		2002		2001		2000		2004			2003			2002			2001			2000
Real Estate:
Commercial	$	1,319	$	1,183	$	893	$	833	$	700		39.82	%		44.15	%		37.97	%		43.88	%		44.67	%
Residential		304		230		276		153		34		13.78	%		9.98	%		15.54	%		5.44	%		3.93	%
Construction		1,358		972		726		348		270		27.82	%		26.17	%		22.56	%		19.02	%		17.91	%
Commercial		185		155		129		142		185		6.55	%		7.12	%		7.49	%		10.63	%		10.01	%
Consumer installment		11		12		11		14		12		0.52	%		0.85	%		1.01	%		0.89	%		1.29	%
Consumer home equity		233		285		283		296		312		11.51	%		11.73	%		15.43	%		20.14	%		22.19	%
Unallocated		71		97		54		108		132		N/A			N/A			N/A			N/A			N/A
Total	$	3,481	$	2,934	$	2,372	$	1,894	$	1,645		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

Non-Accrual, Past Due and Restructured Loans

The following table is a summary of non-accrual and past due loans at the end of each of the last five years.

	2004		2003		2002		2001		2000
	(thousands of dollars)
Loans delinquent over 90
days still accruing	$	373	$	165	$	1,172	$	1,300	$	507
Non-accruing loans		3,669		150		201		1,654		1,759
	$	4,042	$	315	$	1,373	$	2,954	$	2,266
% of Total Loans		1.51%		0.14%		0.79%		2.14%		1.77%
% of Total Assets		1.00%		0.09%		0.56%		1.46%		1.15%
Additional income on non-accrual
loans if recognized on an accrual
basis	$	18	$	18	$	67	$	159	$	115

There were no loans in either 2004 or 2003 considered as “troubled debt restructurings.”

Potential Problem Loans

The $3.7 million of non-accruing loans at December 31, 2004 is comprised of three loans, all of which are well collateralized and in the process of collection. Two of the loans totaling $3.5 million are current as to principal and interest payments.

At December 31, 2004, Bancorp had no loans other than those described above, as to which management has significant doubts as to the ability of the borrower to comply with the present repayment terms.

Deposits

The following table is a summary of Bancorp’s deposits at December 31 for each of the years shown.

	2004		2003		2002

Non-interest bearing	$	42,584,120	$	30,477,295	$	25,519,809
Interest bearing
Time certificates, less than $100,000		131,764,662		92,574,784		57,202,908
Time certificates, $100,000 or more		71,287,106		50,793,863		28,681,345
Money market		72,450,663		69,503,859		56,973,507
Savings		22,104,121		23,792,811		26,847,780
NOW		26,814,653		22,849,570		22,685,911
Total interest bearing		324,421,205		259,514,887		192,391,451
Total deposits	$	367,005,325	$	289,992,182	$	217,911,260

Total deposits increased $77.0 million or 26.6% to $367.0 million at December 31, 2004. Non-interest bearing deposits increased $12.1 million or 39.7% to $42.6 million at December 31, 2004. Based upon expansion and the increased penetration into the areas served by the Bank, commercial demand accounts increased $7.5 million and personal demand accounts increased $3.8 million, both of which represent increases of 39% as compared to December 31, 2003. Interest bearing deposits increased $64.9 million or 25.0% to $324.4 million at December 31, 2004. During 2004, the Bank established two new branch banking offices; these new offices attracted $19.1 million or 24.8% of the annual growth in deposits. The new branch offices’ grand opening promotional campaigns were also a contributing factor to the growth of deposits in existing branches. Certificates of deposit and NOW account products increased $59.7 million and $4.0 million, respectively; money market fund accounts increased $2.9 million, while savings accounts decreased $1.7 million. Much of the growth in certificates of deposit is attributable to the promotional campaigns run in conjunction with the new branch openings and the ten year anniversary of the Bank; growth in certificates of deposit also resulted from the transfer of funds from money market fund accounts. The increase in certificates of deposit greater than $100 thousand of $20.5 million is the result of successful sales efforts and branch expansion; these balances do not include brokered deposits. The Bank continues to offer attractive interest rates in the very competitive Fairfield County marketplace in order to attract additional deposits to fund loan growth.

As of December 31, 2004, the Bank’s maturities of time deposits were:

	$100,000 or		Less than
	greater		$100,000		Totals
(thousands of dollars)
Three months or less	$	5,858	$	11,502	$	17,360
Three to six months		13,249		23,430		36,679
Six months to one year		13,695		27,494		41,189
Over one year		38,485		69,339		107,824
Total	$	71,287	$	131,765	$	203,052

Borrowings

Borrowings decreased $15.1 million to $16.2 million at December 31, 2004.

Borrowings include short term securities sold under agreements to repurchase, Federal Home Loan Bank Advances, junior subordinated debentures, a capital lease and a collateralized borrowing.

During 2004, certain FHLB advances and short term securities sold under agreements to repurchase matured and due to the liquidity position of the Bank were not extended. The final payment on the lease classified as a capital lease was made during 2004; in addition, the loan sold and classified as a collateralized borrowing was refinanced at the end of 2004.

The following table sets forth short term borrowing amounts along with the respective interest rates and maturities:

Federal Home Loan Bank advances:
Amount	Maturity		Rate		Average amount outstanding
$ 2,000,000		04/29/2005		1.930%	$	2,000,000
2,000,000		05/13/2005		4.480%		2,000,000
$ 4,000,000				3.205%	$	4,000,000

The maximum amount of short term borrowings outstanding under Federal Home Loan Bank advances during 2004 was $9,000,000.

At December 31, 2004 the Bank had no securities sold under repurchase agreements; the average amount outstanding during 2004 was $2,243,000 with a maximum outstanding of $5,700,000.

Other

The increase in premises and equipment is due primarily to the capitalized costs associated with leasehold improvements made to and providing equipment for two new branch offices and the relocation of one mortgage origination office from Greenwich to Stamford.

The increase in accrued interest receivable is due to higher outstanding balances in loans at December 31, 2004 as compared to those in effect at December 31, 2003.

The decrease in accrued expenses and other liabilities is due primarily to decreases in accruals for incentive compensation arrangements and lower balances at year end for other accrued expenses.

The following table presents average balance sheets (daily averages), interest income, interest expense and the corresponding yields earned and rates paid:

Distribution of Assets, Liabilities and Shareholders’ Equity

Interest Rates and Interest Differential and Rate Volume Variance Analysis

(thousands of dollars) ⁽¹⁾

	2004							2003
															Fluctuations in Interest
				Interest							Interest				Income/Expense ⁽³⁾
	Average			Income/		Average		Average			Income/		Average		Due to change in:
	Balance			Expense		Rate		Balance			Expense		Rate		Volume			Rate			Total

Interest earning assets:
Loans ⁽²⁾	$	239,239		$	15,632		6.53%	$	193,990		$	12,782		6.59%	$	2,967		$	(117	)	$	2,850
Short term investments		8,356			105		1.26%		7,124			79		1.11%		13			13			26
Investments ⁽⁴⁾		87,631			2,752		3.14%		72,250			2,256		3.12%		477			19			496
Federal funds sold		12,733			189		1.48%		9,147			97		1.06%		31			61			92
Total interest earning assets		347,959			18,678		5.37%		282,511			15,214		5.39%		3,488			(24	)		3,464

Cash and due from banks		4,159							4,001
Premises and equipment, net		1,621							1,083
Allowance for loan losses		(3,190	)						(2,652	)
Other		6,396							5,798
Total Assets	$	356,945						$	290,741

Interest bearing liabilities:
Time certificates	$	156,623		$	4,901		3.13%	$	110,129		$	3,512		3.19%	$	1,456		$	(67	)	$	1,389
Savings accounts		23,666			294		1.24%		24,824			337		1.36%		(15	)		(28	)		(43	)
Money market accounts		70,264			867		1.23%		62,217			863		1.39%		105			(101	)		4
NOW accounts		23,107			152		0.66%		22,627			149		0.66%		3			-			3
Repurchase agreements		2,243			28		1.25%		5,700			91		1.60%		(46	)		(17	)		(63	)
FHLB advances		14,197			372		2.62%		11,671			327		2.80%		67			(22	)		45
Subordinated debt		8,248			380		4.61%		6,159			271		4.40%		88			21			109
Other borrowings		226			14		6.19%		471			38		8.07%		(17	)		(7	)		(24	)
Total interest
bearing liabilities		298,574			7,008		2.35%		243,798			5,588		2.29%		1,641			(221	)		1,420

Demand deposits		36,456							25,892
Accrued expenses and
other liabilities		2,362							2,140
Shareholders’ equity		19,553							18,911
Total liabilities and equity	$	356,945						$	290,741

Net interest income				$	11,670						$	9,626			$	1,847		$	197		$	2,044
Interest margin							3.35%							3.41%
Interest Spread							3.02%							3.10%

(1) The rate volume analysis reflects the changes in net interest income arising from changes in interest rates and from asset

and liability volume, including mix. The change in interest attributable to volume includes changes in interest attributable to mix.

(2) Includes non-accruing loans.

(3) Favorable/ (unfavorable) fluctuations.

(4) Yields are calculated at historical cost and excludes the effects of unrealized gain or loss on available for sale securities.

RESULTS OF OPERATIONS

For the year ended December 31, 2004, Bancorp earned $926,000 ($0.38 basic income per share and $0.37 diluted income per share) a decrease of 30.9% as compared to 2003 when Bancorp earned $1,341,000 ($0.56 basic income per share and $0.55 diluted income per share). Noninterest income decreased $2.1 million or 43.9% to $2.7 million for 2004 from $4.8 million in 2003. An increase in long term interest rates during the year resulted in a decrease in the volume of residential mortgage refinance transactions; the interest rate increase along with the turnover of loan originators in the New York office which created a temporary staffing reduction, resulted in a decrease in mortgage brokerage and referral fees and loan processing fees of $1.9 million. The results for 2003 included a gain from the sale of investment securities of $308,000; there were no such sales of investment securities during 2004.

Interest income increased $3.5 million to $18.7 million in 2004 as compared to 2003 when interest income was $15.2 million. This increase is due mainly to the growth in the loan portfolio and higher average balances in the available for sales securities portfolio.

Interest expense increased $1.4 million or 25.4% to $7.0 million in 2004 compared to $5.6 million in 2003. The increase in interest expense is due to the increase in total deposits and higher average balances in Federal Home Loan Bank borrowings and subordinated debt.

Noninterest expenses for 2004 totaled $12.3 million which represents an increase of $597,000 or 5.1% over the prior year. The higher operating costs were primarily the result of the full year impact in 2004 of the three branch offices opened in 2003, the two new branch offices opened in 2004, and the relocation of a residential mortgage loan origination office from Greenwich to Stamford, all of which resulted in an increase in occupancy and equipment expenses of $397,000 over last year.

The following are measurements relating to Bancorp’s earnings.

	2004			2003			2002

Return on average assets		.26	%		.46	%		.47	%
Return on average equity		4.74	%		7.09	%		5.82	%
Dividend payout ratio		35.26	%		20.54	%		21.59	%
Average equity to average assets		5.48	%		6.50	%		8.13	%
Basic income per share		$ 0.38			$ 0.56			$ 0.44
Diluted income per share		$ 0.37			$ 0.55			$ 0.43

Interest income and expense

Bancorp’s net interest income increased $2.1 million or 21.2%, to $11.7 million in 2004 from $9.6 million in 2003. An increase in average earning assets of $65.4 million, or 23.2%, increased Bancorp’s interest income $3.5 million or 22.8% from $15.2 million in 2003 to $18.7 million in 2003. Average loans outstanding increased $45.2 million, or 23.3%, led by growth in construction and real estate loans, which reflects the continuing strength of the local real estate

market. An increase in average investments and related yields resulted in an increase in interest income on available for sale securities of $496,000. Higher average balances in federal funds sold and short-term investments combined with interest rates which began increasing in the latter part of the year resulted in an increase of $118,000 in interest earned on Federal funds sold and short term investments. Total average interest bearing liabilities increased by $54.8 million or 22.5%; average certificates of deposits increased by $46.5 million; average money market deposits and NOW accounts increased $8.0 million and $0.5 million, respectively; average savings accounts decreased $1.2 million; average FHLB advances increased $2.5 million; average subordinated debt which was issued at the end of the first quarter of 2003 increased $2.1 million. Interest expense increased from $5.6 million in 2003 to $7.0 million in 2004. Interest expense on certificates of deposit increased $1.4 million as a result of higher average outstanding balances partially offset by a decrease in the cost of funds for that portfolio from 3.19% in 2003 to 3.13% in 2004.

Noninterest income

Noninterest income decreased $2.1 million from $4.8 million in 2003 to $2.7 million in 2004. The decrease is due primarily to an increase in long term interest rates which resulted in a decrease in the volume of residential mortgage refinance transactions; this increase in interest rates combined with the turnover of loan originators in the New York office, which created a temporary staffing reduction, resulted in a decrease in mortgage brokerage referral fees of $1.6 million and a reduction in loan origination and processing fees of $260,000. Included in the results for 2003 are gains from the sale of investment securities of $308,000; during 2004 there were no sales of investment securities. Increases in deposit accounts and transaction volumes resulted in an increase in fees and service charges of $87,000 or 22.9% from $378,000 for the year ended December 31, 2003 to $465,000 for the year ended December 31, 2004.

Noninterest expenses

Noninterest expenses increased $597,000 in 2004 from $11.7 million in 2003 to $12.3 million in 2004. Salaries and benefits decreased slightly in 2004 as compared to 2003; increases in salaries, due primarily to staff additions resulting from the full year impact in 2004 of three branches opened in 2003 and two in 2004, loan and deposit sales and incentive compensation and stock based compensation, were more than offset by lower levels of commissions and production and target related incentive compensation expense as a direct result of the decrease in the volume of residential mortgage refinance transactions. Higher staffing levels and incentive compensation also resulted in higher payroll taxes and employee benefit costs. Occupancy and equipment expenses increased $397,000 from $1.3 million 2003 to $1.7 million in 2004; this increase is due primarily to the full year impact in 2004 of opening three new branch offices in 2003 and of opening two branches in 2004, as well as the costs associated with the relocation of the Greenwich loan origination office to a new facility in Stamford. Loan administration and processing expenses decreased $195,000 or 48.2% from $404,000 for the year ended December 31, 2003 to $209,000 for the year ended December 31, 2004; this decrease is related to the decrease in the volume of residential mortgage loans and the resultant decreases in mortgage brokerage and loan processing fees. Other non-interest expenses increased $192,000 or 18.3% from $1.0 million for the year ended December 31, 2003 to $1.2 million for the year

ended December 31, 2004; included in the results for 2004 are nonrecurring items for a payment made to the State of Connecticut for an amendment to Bancorp’s Articles of Incorporation for the increase in the number of shares the Company is authorized to issue and the write off of an externally perpetuated fraud of a customer’s checks for which the Bank has submitted an insurance claim. In addition, there were increases in regulatory assessments as a direct result of the growth of the Bank.

The provision for income taxes of $633,000 in 2004 and $877,000 for 2003 represents the tax expense recognized for both federal and state income tax. The effective tax rates for 2004 and 2003 are 40.6% and 39.5%, respectively. Fluctuations in effective tax rates are due to the change in pre-tax income as well as to the exclusion, for state tax purposes, of certain holding company expenses.

Management believes that additional branch offices will contribute to the future growth and earnings of Bancorp. While the opening of these new branches will result in increased operating expenses, the openings will be strategically planned to maintain profitable operations.

Management regularly reviews loan and deposit rates and attempts to price Bancorp’s products competitively. With the assistance of its investment advisors, Bancorp tracks its mix of asset/liability maturities and strives to maintain a reasonable match. Performance ratios are reviewed monthly by management and the Board and are used to set strategies.

LIQUIDITY

Bancorp’s liquidity position was 32.6% and 35.1% at December 31, 2004 and 2003, respectively. The liquidity ratio is defined as the percentage of liquid assets to total assets. The following categories of assets as described in the accompanying balance sheets are considered liquid assets: cash and due from banks, federal funds sold, short-term investments and available-for-sale securities. Liquidity is a measure of Bancorp’s ability to generate adequate cash to meet financial obligations. The principal cash requirements of a financial institution are to cover increases in its loan portfolio and downward fluctuations in deposit accounts. Management believes Bancorp’s short-term assets have sufficient liquidity to satisfy loan demand, cover potential fluctuations in deposit accounts and to meet other anticipated cash requirements.

CAPITAL

The following table illustrates the Bank’s regulatory capital ratios for each of the years shown:

	December 31,
	2004			2003			2002
Total Risk-Based Capital		10.50	%		11.67	%		10.36	%
Tier 1 Risk-Based Capital		9.29	%		10.47	%		9.11	%
Leverage Capital		6.98	%		7.85	%		6.98	%

The following table illustrates Bancorp’s regulatory capital ratios for each of the years shown:

	December 31,
	2004			2003			2002
Total Risk-Based Capital		10.70	%		11.87	%		10.39	%
Tier 1 Risk-Based Capital		9.04	%		10.00	%		9.13	%
Leverage Capital		6.79	%		7.51	%		6.99	%

Capital adequacy is one of the most important factors used to determine the safety and soundness of individual banks and the banking system. Based on the above ratios, the Bank is considered to be “well capitalized” under applicable regulations. To be considered “well-capitalized,” an institution must generally have a leverage capital ratio of at least 5%, a Tier 1 risk-based capital ratio of at least 6% and a total risk-based capital ratio of at least 10%.

The increase in capital ratios during 2003 was due primarily to the issuance of trust preferred securities through the formation of a statutory trust. The decrease in capital ratios during 2004 is due primarily to the growth of the bank.

Management continuously assesses the adequacy of the Bank’s capital to ensure that the Bank maintains its “well capitalized” classification. Management’s strategic and capital plans contemplate various alternatives to raise additional capital to support the planned growth of the Bank which plans include the opening of two new branches in 2005. The Board and management are in the planning stages of an offering of common stock scheduled for 2005 to support the growth plans of the Company.

MARKET RISK

Market risk is defined as the sensitivity of income to fluctuations in interest rates, foreign exchange rates, equity prices, commodity prices and other market-driven rates or prices. Based upon the nature of Bancorp’s business, market risk is primarily limited to interest rate risk, which is the impact that changing interest rates have on current and future earnings.

Bancorp’s goal is to maximize long term profitability while minimizing its exposure to interest rate fluctuations. The first priority is to structure and price Bancorp’s assets and liabilities to maintain an acceptable interest rate spread while reducing the net effect of changes in interest rates. In order to accomplish this, the focus is on maintaining a proper balance between the timing and volume of assets and liabilities re-pricing within the balance sheet. One method of achieving this balance is to originate variable rate loans for the portfolio and purchase short term investments to offset the increasing short term re-pricing of the liability side of the balance sheet. In fact, a number of the interest bearing deposit products have no contractual maturity. Customers may withdraw funds from their accounts at any time and deposit balances may therefore run off unexpectedly due to changing market conditions. Additionally, loans and investments with longer term rate adjustment frequencies are matched against longer term deposits and borrowings to lock in a desirable spread.

The exposure to interest rate risk is monitored by the Asset and Liability Management Committee (“ ALCO ”) consisting of senior management personnel. ALCO reviews the

interrelationships within the balance sheet to maximize net interest income within acceptable levels of risk. ALCO reports to the Board of Directors on a monthly basis regarding its activities.

Impact of Inflation and Changing Prices

Bancorp’s financial statements have been prepared in terms of historical dollars, without considering changes in relative purchasing power of money over time due to inflation. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the effect of general levels of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services. Notwithstanding this, inflation can directly affect the value of loan collateral, in particular, real estate. Inflation, or disinflation, could significantly affect Bancorp’s earnings in future periods.

“Safe Harbor” Statement Under Private Securities Litigation Reform Act of 1995

Certain statements contained in Bancorp’s public reports, including this report, and in particular in this “Management’s Discussion and Analysis or Plan of Operation,” may be forward looking and subject to a variety of risks and uncertainties. These factors include, but are not limited to, (1) changes in prevailing interest rates which would affect the interest earned on Bancorp’s interest earning assets and the interest paid on its interest bearing liabilities, (2) the timing of repricing of Bancorp’s interest earning assets and interest bearing liabilities, (3) the effect of changes in governmental monetary policy, (4) the effect of changes in regulations applicable to Bancorp and the Bank and the conduct of its business, (5) changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks and the impact of federal legislation, (6) the ability of competitors which are larger than Bancorp to provide products and services which it is impracticable for Bancorp to provide, (7) the effect of Bancorp’s opening of branches, and (8) the effect of any decision by Bancorp to engage in any business not historically permitted to it. Other such factors may be described in Bancorp’s other filings with the SEC.

Although Bancorp believes that it offers the loan and deposit products and has the resources needed for continued success, future revenues and interest spreads and yields cannot be reliably predicted. These trends may cause Bancorp to adjust its operations in the future. Because of the foregoing and other factors, recent trends should not be considered reliable indicators of future financial results or stock prices.

Item 7. Financial Statements

The consolidated balance sheets of Bancorp as of December 31, 2004 and December 31, 2003 and the related consolidated statements of income, shareholders’ equity and cash flows for the years ended December 31, 2004 and December 31, 2003, together with the report thereon of McGladrey & Pullen, LLP dated March 3, 2005, are included as part of this Form 10-KSB in the “Financial Report” following page 33 hereof.

Item 8. Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure

Not applicable.

Item 8A. Controls and Procedures

Based on an evaluation of the effectiveness of Bancorp’s disclosure controls and procedures performed by Bancorp’s management, with the participation of Bancorp’s Chief Executive Officer and its Chief Financial Officer as of the end of the period covered by this report, Bancorp’s Chief Executive Officer and Chief Financial Officer concluded that Bancorp’s disclosure controls and procedures have been effective.

As used herein, “disclosure controls and procedures” mean controls and other procedures of Bancorp that are designed to ensure that information required to be disclosed by Bancorp in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by Bancorp in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to Bancorp’s management, including its principal executive, and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in Bancorp’s internal control over financial reporting identified in connection with the evaluation described in the preceding paragraph that occurred during Bancorp’s fiscal year ended December 31, 2004 that has materially affected, or is reasonably likely to materially affect, Bancorp’s internal control over financial reporting.

Item 8B. Other Information

Not applicable

PART III

Item 9. Directors and Executive Officers of the Registrant

The information required by Items 401 and 405 of Regulation S-B is incorporated into this Form 10-KSB by reference to Bancorp’s definitive proxy statement (the “ Definitive Proxy Statement” ) for its 2004 Annual Meeting of Shareholders, to be filed within 120 days following December 31, 2004.

Item 10. Executive Compensation

The information required by Item 402 of Regulation S-B is incorporated into this Form 10-KSB by reference to the Definitive Proxy Statement.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The information required by Item 201(d) and Item 403 of Regulation S-B is incorporated into this Form 10-KSB by reference to the Definitive Proxy Statement.

Item 12. Certain Relationships and Related Transactions

The information required by Item 404 of Regulation S-B is incorporated into this Form 10-KSB by reference to the Definitive Proxy Statement.

Item 13. Exhibits and Reports on Form 8-K

(a)

Exhibits

Exhibit No.	Description

2	Agreement and Plan of Reorganization dated as of June 28, 1999 between Bancorp and the Bank (incorporated by reference to Exhibit 2 to Bancorp’s Current Report on Form 8-K dated December 1, 1999 (Commission File No. 000-29599)).

3(i)	Certificate of Incorporation of Bancorp, (incorporated by reference to Exhibit 3(i) to Bancorp's Current Report on Form 8-K dated December 1, 1999 (Commission File No. 000-29599)).

3(i)(A)	Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp, Inc. dated July 16, 2004.

3(ii)	By-laws of Bancorp (incorporated by reference to Exhibit 3(ii) to Bancorp’s Current Report on Form 8-K dated December 1, 1999 (Commission File No. 000-29599)).

4	Reference is made to the Rights Agreement dated April 19, 2004 by and between Patriot National Bancorp, Inc. and Registrar and Transfer Company filed as Exhibit 99.2 to Bancorp’s Report on Form 8-K filed on April 19, 2004, which is incorporated herein by reference.

10(a)(1)	2001 Stock Appreciation Rights Plan of Bancorp (incorporated by reference to Exhibit 10(a)(1) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2001 (Commission File No. 000-29599)).

Exhibit No.	Description

10(a)(3)	Employment Agreement, dated as of October 23, 2000, as amended by a First Amendment, dated as of March 21, 2001, among the Bank, Bancorp and Charles F. Howell (incorporated by reference to Exhibit 10(a)(4) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2000 (Commission File No. 000-29599)).

10(a)(4)	Change of Control Agreement, dated as of May 1, 2001 between Martin G. Noble and Patriot National Bank.

10(a)(5)	Employment Agreement dated as of November 3, 2003 among Patriot National Bank, Bancorp and Robert F. O’Connell. (incorporated by reference to Exhibit 10(a)(5) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2003 (Commission File No. 000-29599)).

10(a)(6)	Change of Control Agreement, dated as of November 3, 2003 between Robert F. O’Connell and Patriot National Bank. (incorporated by reference to Exhibit 10(a)(6) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2003 (Commission File No. 000-29599)).

10(a)(8)	Employment Agreement dated as of January 1, 2005 between Patriot National Bank and Marcus Zavattaro.

10(c)	1999 Stock Option Plan of the Bank (incorporated by reference to Exhibit 10(c) to Bancorp’s Current Report on Form 8-K dated December 1, 1999 (Commission File No. 000-29599)).

10(a)(9)	License agreement dated July 1, 2003 between Patriot National Bank and L. Morris Glucksman. (incorporated by reference to Exhibit 10(a)(9) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2003 (Commission File No. 000-29599)).

10(a)(10)	Employment Agreement dated as of October 23, 2003 among the Bank, Bancorp and Charles F. Howell. (incorporated by reference to Exhibit 10(a)(10) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2003 (Commission File No. 000-29599)).

14	Code of Conduct for Senior Financial Officers

21	Subsidiaries of Bancorp (Incorporated by reference to Exhibit 21 to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 1999 (Commission File No. 000-29599)).

23	Consent of McGladrey & Pullen, LLP.

31(1)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31(2)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32	Section 1350 Certification

(b) Reports on Form 8-K

During the quarter ended December 31, 2004, Bancorp filed two current Reports of Form 8-K; the first was dated October 25, 2004 (filed October 25, 2004) responding to Item 2 and relating to a press release announcing certain information concerning Bancorp’s results of operations for the quarter and nine months ended September 30, 2004 and its financial condition at September 30, 2004; the second report was dated December 21, 2004 (filed December 21, 2004) responding to Item 8 and related to a press release announcing Bancorp’s quarterly dividend.

14. Principal Accountant Fees and Services

The information required by Item 9(e) of Schedule 14A of Regulation S-B is incorporated into this Form 10-KSB by reference to the Definitive Proxy Statement.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Patriot National Bancorp, Inc.
	(Registrant)


	By: /s/ Angelo De Caro
	Name: Angelo De Caro
	Title: Chairman & Chief Executive Officer

Date: March 16, 2005

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in capacities and on the dates indicated.

/s/ Angelo De Caro	March 16, 2005
Angelo De Caro, Chairman, Chief Executive	Date
Officer and Director


/s/ Robert F. O’Connell	March 16, 2005
Robert F. O’Connell	Date
Senior Executive Vice President,
Chief Financial Officer and Director


/s/ Michael A. Capodanno	March 16, 2005
Michael A. Capodanno	Date
Senior Vice President & Controller


/s/ John J. Ferguson	March 16, 2005
John J. Ferguson	Date
Director


/s/ Brian A. Fitzgerald	March 16, 2005
Brian A. Fitzgerald	Date
Director

Form 10 KSB - Signatures continued

/s/ John A. Geoghegan	March 16, 2005
John A. Geoghegan	Date
Director


/s/ L. Morris Glucksman	March 16, 2005
L. Morris Glucksman	Date
Director


/s/ Charles F. Howell	March 16, 2005
Charles F. Howell	Date
Director


/s/ Michael Intrieri	March 16, 2005
Michael Intrieri	Date
Director


/s/ Paul Settelmeyer	March 16, 2005
Paul Settelmeyer	Date
Director


/s/ Philip Wolford	March 16, 2005
Philip Wolford	Date
Director

Patriot National Bancorp, Inc.

Financial Report

December 31, 2004 and 2003

CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	1

CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheets	2
Consolidated statements of income	3
Consolidated statements of shareholders’ equity	4
Consolidated statements of cash flows	5-6
Notes to consolidated financial statements	7-39

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

Patriot National Bancorp, Inc. and Subsidiary

Stamford, Connecticut

We have audited the accompanying consolidated balance sheets of Patriot National Bancorp, Inc. and Subsidiary (the "Company") as of December 31, 2004 and 2003, and the related consolidated statements of income, shareholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Patriot National Bancorp, Inc. and Subsidiary as of December 31, 2004 and 2003, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ McGladrey & Pullen, LLP

New Haven, Connecticut

March 3, 2005

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
December 31, 2004 and 2003


	2004			2003
ASSETS
Cash and due from banks (Note 2)	$	6,670,409		$	4,023,732
Federal funds sold		37,500,000			15,000,000
Short-term investments		11,460,057			10,430,939
Cash and cash equivalents		55,630,466			29,454,671

Available for sale securities (at fair value) (Note 3)		76,269,475			90,562,083
Federal Reserve Bank stock		692,600			691,150
Federal Home Loan Bank stock (Note 7)		1,296,700			1,077,300
Loans receivable (net of allowance for loan losses: 2004 $3,481,525;
2003 $2,934,675) (Note 4)		263,874,820			214,420,528
Accrued interest receivable		1,758,339			1,470,622
Premises and equipment, net (Notes 5 and 8)		2,132,633			1,421,098
Deferred tax asset (Note 9)		1,677,042			1,524,125
Goodwill (Note 10)		930,091			930,091
Other assets (Note 7)		784,789			917,381
Total assets	$	405,046,955		$	342,469,049

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits (Note 6):
Noninterest bearing deposits	$	42,584,120		$	30,477,295
Interest bearing deposits		324,421,205			259,514,887
Total deposits		367,005,325			289,992,182

Repurchase agreements (Note 7)		-			5,700,000
Federal Home Loan Bank borrowings (Note 7)		8,000,000			17,000,000
Subordinated debt (Note 7)		8,248,000			8,248,000
Capital lease obligation (Note 8)		-			103,941
Collateralized borrowings		-			249,444
Accrued expenses and other liabilities		2,037,196			2,395,569
Total liabilities		385,290,521			323,689,136

Commitments and Contingencies (Notes 7, 8, 11 and 13)

Shareholders' equity (Notes 11 and 14)
Preferred stock, no par value; 1,000,000 shares authorized,
no shares issued		-			-
Common stock, $2 par value: 30,000,000 shares authorized; shares
issued and outstanding: 2004 2,486,391; 2003 2,408,607		4,972,782			4,817,214
Additional paid-in capital		11,830,173			11,519,037
Retained earnings		3,346,718			2,752,541
Accumulated other comprehensive loss - net unrealized loss
on available for sale securities, net of taxes		(393,239	)		(308,879	)
Total shareholders' equity		19,756,434			18,779,913

Total liabilities and shareholders' equity	$	405,046,955		$	342,469,049

See Notes to Consolidated Financial Statements.


CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2004 and 2003


	2004		2003
Interest and Dividend Income
Interest and fees on loans	$	15,631,838	$	12,782,457
Interest and dividends on investment securities		2,856,928		2,335,552
Interest on Federal funds sold		189,485		96,693
Total interest and dividend income		18,678,251		15,214,702

Interest Expense
Interest on deposits (Note 6)		6,213,732		4,861,152
Interest on Federal Home Loan Bank borrowings		371,699		327,020
Interest on subordinated debt		380,194		270,610
Interest on other borrowings		42,883		129,473
Total interest expense		7,008,508		5,588,255

Net interest income		11,669,743		9,626,447

Provision for Loan Losses (Note 4)		556,000		563,000

Net interest income after provision for loan losses		11,113,743		9,063,447

Noninterest Income
Mortgage brokerage referral fees		1,717,756		3,356,470
Loan origination and processing fees		408,152		668,410
Fees and service charges		465,018		378,415
Gain on sale of investment securities		-		307,739
Other income		111,278		102,706
Total noninterest income		2,702,204		4,813,740

Noninterest Expenses
Salaries and benefits (Note 12)		7,544,055		7,574,532
Occupancy and equipment expense, net		1,707,769		1,311,038
Data processing and other outside services		802,536		690,168
Professional services		386,110		301,016
Advertising and promotional expenses		369,638		332,852
Loan administration and processing expenses		209,283		404,231
Other operating expenses		1,237,159		1,045,630
Total noninterest expenses		12,256,550		11,659,467

Income before income taxes		1,559,397		2,217,720

Provision for Income Taxes (Note 9)		633,000		877,000

Net income	$	926,397	$	1,340,720

Basic income per share (Note 11)	$	0.38	$	0.56

Diluted income per share (Note 11)	$	0.37	$	0.55

Dividends per share	$	0.135	$	0.115

See Notes to Consolidated Financial Statements.

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years Ended December 31, 2004 and 2003


										Accumulated
					Additional					Other
	Number of		Common		Paid-in		Retained			Comprehensive
	Shares		Stock		Capital		Earnings			Income (Loss)			Total

Balance at December 31, 2002		2,400,525	$	4,801,050	$	11,484,649	$	1,688,158		$	571,098		$	18,544,955

Comprehensive income
Net income		-		-		-		1,340,720			-			1,340,720
Unrealized holding loss on available for
sale securities, net of taxes (Note 16)		-		-		-		-			(879,977	)		(879,977	)
Total comprehensive income														460,743

Dividends		-		-		-		(276,337	)		-			(276,337	)

Issuance of capital stock		8,082		16,164		34,388		-			-			50,552

Balance at December 31, 2003		2,408,607		4,817,214		11,519,037		2,752,541			(308,879	)		18,779,913

Comprehensive income
Net income		-		-		-		926,397			-			926,397
Unrealized holding loss on available for
sale securities, net of taxes (Note 16)		-		-		-		-			(84,360	)		(84,360	)
Total comprehensive income														842,037

Dividends		-		-		-		(332,220	)		-			(332,220	)

Issuance of capital stock		77,784		155,568		311,136		-			-			466,704

Balance, December 31, 2004		2,486,391	$	4,972,782	$	11,830,173	$	3,346,718		$	(393,239	)	$	19,756,434

See Notes to Consolidated Financial Statements.

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2004 and 2003


	2004			2003

Cash Flows from Operating Activities
Net income	$	926,397		$	1,340,720
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization and accretion of investment premiums and discounts, net		500,847			593,490
Provision for loan losses		556,000			563,000
Gain on sales of investment securities		-			(307,739	)
Depreciation and amortization of premises and equipment		536,029			417,377
Loss on disposal of bank premises and equipment		3,804			2,037
Deferred income taxes		(101,212	)		(230,089	)
Change in assets and liabilities:
Increase in deferred loan fees		235,734			270,013
Increase in accrued interest receivable		(287,717	)		(159,169	)
Decrease in other assets		132,592			31,555
(Decrease) increase in accrued expenses and other liabilities		(373,139	)		635,461
Net cash provided by operating activities		2,129,335			3,156,656

Cash Flows from Investing Activities
Purchases of available for sale securities		(16,020,313	)		(71,907,123	)
Proceeds from sales of available for sale securities		-			7,094,321
Proceeds from maturities of available for sale securities		6,000,000			8,200,000
Principal repayments on available for sale securities		23,676,009			24,964,017
Purchase of Federal Reserve Bank stock		(1,450	)		(210,100	)
Purchase of Federal Home Loan Bank stock		(219,400	)		(456,000	)
Net increase in loans		(50,246,026	)		(44,458,602	)
Purchases of premises and equipment		(1,251,368	)		(1,058,215	)
Proceeds from sale of bank premises and equipment		-			6,900
Investment in trust (Note 7)		-			(248,000	)
Net cash used in investing activities		(38,062,548	)		(78,072,802	)







					(Continued)

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
Years Ended December 31, 2004 and 2003


	2004			2003

Cash Flows from Financing Activities
Net increase in demand, savings and money market deposits		17,330,022			14,596,528
Net increase in time certificates of deposit		59,683,121			57,484,394
Decrease in securities sold under repurchase agreements		(5,700,000	)		-
Proceeds from FHLB borrowings		17,000,000			16,000,000
Principal repayments of FHLB borrowings		(26,000,000	)		(3,000,000	)
Proceeds from issuance of subordinated debt		-			8,248,000
Debt issuance costs		-			(240,000	)
Decrease in other borrowings		(353,385	)		(239,290	)
Proceeds from issuance of common stock		466,704			50,552
Dividends paid on common stock		(317,454	)		(264,092	)
Net cash provided by financing activities		62,109,008			92,636,092

Net increase in cash and cash equivalents		26,175,795			17,719,946

Cash and cash equivalents
Beginning		29,454,671			11,734,725

Ending	$	55,630,466		$	29,454,671

Supplemental Disclosures of Cash Flow Information
Cash paid for:
Interest	$	7,020,278		$	5,569,011

Income taxes	$	850,970		$	1,102,971

Supplemental Disclosure of Noncash Investing and Financing
Activities
Unrealized holding losses on available for sale securities
arising during the period	$	(136,065	)	$	(1,419,317	)

Accrued dividends declared on common stock	$	87,024		$	72,258




See Notes to Consolidated Financial Statements.

Note 1. Nature of Operations and Summary of Significant Accounting Policies

2004	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

U.S. Government agency and sponsored agency obligations	$	15,000,000	$	937	$	(177,642)	$	14,823,295
Mortgage-backed securities		52,903,731		69,719		(527,270)		52,446,180
Money market preferred equity securities		9,000,000		-		-		9,000,000
	$	76,903,731	$	70,656	$	(704,912)	$	76,269,475

2003	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

U.S. Government agency and sponsored agency obligations	$	12,018,111	$	7,500	$	(159,993)	$	11,865,618
Mortgage-backed securities		67,042,163		147,589		(493,287)		66,696,465
Money market preferred equity securities		12,000,000		-		-		12,000,000
	$	91,060,274	$	155,089	$	(653,280)	$	90,562,083

	Less Than 12 Months					12 Months or More					Total
	Fair Value			Unrealized Loss		Fair Value			Unrealized Loss		Fair Value		Unrealized Loss

U.S. Government agency and
sponsored agency
obligations	$	7,921,108	$		(78,892)		$	3,901,250	$	(98,750)	$	11,822,358	$	(177,642)
Mortgage-backed securities		17,632,613			(134,422)			20,361,275		(392,848)		37,993,888		(527,270)
Totals	$	25,553,721	$		(213,314)		$	24,262,525	$	(491,598)	$	49,816,246	$	(704,912)

		Amortized		Fair
		Cost		Value
Maturity:
1-5 years	$	14,000,000	$	13,822,983
5-10 years		1,000,000		1,000,312
Mortgage-backed securities		52,903,731		52,446,180
Total	$	67,903,731	$	67,269,475

		2004		2003

Real estate:
Commercial	$	106,771,441	$	96,339,220
Residential		36,965,661		21,772,759
Construction		74,598,919		57,122,445
Commercial		17,562,523		15,532,902
Consumer installment		1,386,709		1,861,924
Consumer home equity		30,874,894		25,607,775
Total loans		268,160,147		218,237,025
Premiums on purchased loans		313,754		-
Net deferred loan fees		(1,117,556)		(881,822)
Allowance for loan losses		(3,481,525)		(2,934,675)
Loans receivable, net	$	263,874,820	$	214,420,528

		2004		2003

Balance, beginning of year	$	2,934,675	$	2,372,454
Provision for loan losses		556,000		563,000
Recoveries of loans previously charged-off		-		-
Loans charged-off		(9,150)		(779)
Balance, end of year	$	3,481,525	$	2,934,675

		2004		2003

Loans receivable for which there is a related allowance for credit losses	$	150,000	$	-

Loans receivable for which there is no related allowance for credit losses	$	3,519,148	$	150,000

Allowance for credit losses related to impaired loans	$	22,500	$	-

Average recorded investment in impaired loans	$	2,990,191	$	157,678

Note 5. Premises and Equipment

		2004		2003

Premises under capital lease	$	-	$	783,000
Leasehold improvements		1,811,187		1,372,576
Furniture, equipment and software		2,332,962		1,561,579
		4,144,149		3,717,155
Less accumulated depreciation and amortization		(2,011,516)		(2,296,057)
	$	2,132,633	$	1,421,098

		2004		2003

Noninterest bearing	$	42,584,120	$	30,477,295
Interest bearing:
Time certificates, less than $100,000		131,764,662		92,574,784
Time certificates, $100,000 or more		71,287,106		50,793,863
Money market		72,450,663		69,503,859
Savings		22,104,121		23,792,811
NOW		26,814,653		22,849,570
Total interest bearing		324,421,205		259,514,887
Total deposits	$	367,005,325	$	289,992,182

Due within:
1 year	$	95,228,157
1-2 years		42,562,232
2-3 years		22,269,921
3-4 years		24,022,181
4-5 years		18,969,277
	$	203,051,768

	Fixed		Floating
	Rate		Rate		Total

2005	$	4,000,000	$	-	$	4,000,000
2006		1,000,000		-		1,000,000
2007		3,000,000		-		3,000,000
2008		-		-		-
2009		-		-		-
Thereafter		-		8,248,000		8,248,000
Total borrowings	$	8,000,000	$	8,248,000	$	16,248,000

Years Ending December 31,		Amount

2005	$	926,360
2006		888,052
2007		744,607
2008		560,839
2009		503,017
Thereafter		2,265,723
	$	5,885,598

		2004		2003

Current
Federal	$	554,723	$	842,241
State		179,489		264,848
Total		734,212		1,107,089

Deferred
Federal		(81,723)		(178,241)
State		(19,489)		(51,848)
Total		(101,212)		(230,089)

Provision for income taxes	$	633,000	$	877,000

		2004		2003

Provision for income taxes at statutory Federal rate	$	530,200	$	754,000
State taxes, net of Federal benefit		96,500		129,000
Dividends received deduction		(52,300)		(45,900)
Nondeductible expenses		16,800		10,900
Other		41,800		29,000
Total provision for income taxes	$	633,000	$	877,000

		2004		2003

Deferred tax assets:
Allowance for loan losses	$	1,356,056	$	1,172,111
Investment securities		241,017		189,312
Asset under capital lease		-		20,667
Premises and equipment		138,986		230,643
Accrued expenses		14,022		13,580
Other		-		7,206
Gross deferred tax assets		1,750,081		1,633,519

Deferred tax liabilities:
Tax bad debt reserve		69,347		109,394
Other		3,692		-
Gross deferred tax liabilities		73,039		109,394

Deferred tax asset, net	$	1,677,042	$	1,524,125

Note 11. Shareholders’ Equity

	2004
	Net Income		Shares	Per Share Amount
Basic Income Per Share
Income available to common shareholders	$	926,397	2,449,679	$	0.38

Effect of Dilutive Securities
Warrants and stock options outstanding		-	53,012		(0.01)

Diluted Income Per Share
Income available to common shareholders
plus assumed conversions	$	926,397	2,502,691	$	0.37

	2003
	Net Income		Shares	Per Share Amount
Basic Income Per Share
Income available to common shareholders	$	1,340,720	2,400,879	$	0.56

Effect of Dilutive Securities
Warrants and stock options outstanding		-	42,357		(0.01)

Diluted Income Per Share
Income available to common shareholders
plus assumed conversions	$	1,340,720	2,443,236	$	0.55

A summary of the status of the warrants at December 31, 2004 and 2003, and changes during the years ended on those dates, is as follows:

	2004				2003
	Number of Shares		Weighted- Average Exercise Price		Number of Shares		Weighted- Average Exercise Price

Outstanding at beginning of year		83,484	$	6.00		91,166	$	6.00
Expired		5,700		6.00		-
Exercised		77,784		6.00		7,682		6.00
Outstanding at end of year		-				83,484		6.00

Exercisable at end of year		-				83,484		6.00

	2004			2003
	Number of Shares		Weighted- Average Exercise Price	Number of Shares		Weighted- Average Exercise Price

Outstanding at beginning of year	110,000	$	10.13	110,000	$	10.13
Granted	-			-
Outstanding at end of year	110,000		10.13	110,000		10.13

Exercisable at end of year	110,000		10.13	110,000		10.13

The weighted-average remaining contractual life for the options outstanding at December 31, 2004 is 4.7 years.

		2004		2003

Commitments to extend credit:
Future loan commitments	$	23,484,674	$	23,618,500
Unused lines of credit		36,018,661		31,433,770
Undisbursed construction loans		37,224,376		31,958,302
Financial standby letters of credit		197,000		122,000
	$	96,924,711	$	87,132,572

Actual

For Capital

Adequacy Purposes

To Be Well

Capitalized Under

Prompt Corrective

Action Provisions

2004		Amount	Ratio		Amount	Ratio		Amount	Ratio

The Company:

Total Capital (to Risk Weighted Assets)	$	30,701	10.70%	$	22,954	8.00%	$	N/A	N/A
Tier I Capital (to Risk Weighted Assets)		25,936	9.04%		11,476	4.00%		N/A	N/A
Tier I Capital (Average Assets)		25,936	6.79%		15,279	4.00%		N/A	N/A

The Bank:

Total Capital (to Risk Weighted Assets)	$	30,124	10.50%	$	22,952	8.00%	$	28,690	10.00%
Tier I Capital (to Risk Weighted Assets)		26,642	9.29%		11,471	4.00%		17,207	6.00%
Tier I Capital (to Average Assets)		26,642	6.98%		15,268	4.00%		19,085	5.00%

Actual

For Capital

Adequacy Purposes

To Be Well

Capitalized

Prompt Corrective

Action Provisions

2003		Amount	Ratio		Amount	Ratio		Amount	Ratio

The Company:

Total Capital (to Risk Weighted Assets)	$	29,094	11.87%	$	19,608	8.00%	$	N/A	N/A
Tier I Capital (to Risk Weighted Assets)		24,522	10.00%		9,809	4.00%		N/A	N/A
Tier I Capital (Average Assets)		24,522	7.51%		13,061	4.00%		N/A	N/A

The Bank:

Total Capital (to Risk Weighted Assets)	$	28,568	11.67%	$	19,584	8.00%	$	24,480	10.00%
Tier I Capital (to Risk Weighted Assets)		25,633	10.47%		9,793	4.00%		14,689	6.00%
Tier I Capital (to Average Assets)		25,633	7.85%		13,061	4.00%		16,327	5.00%

Restrictions on dividends, loans and advances

		2004		2003

Balance, beginning of year	$	1,410,440	$	3,547,766
Additional loans		183,386		8,823
Repayments		(22,998)		(2,129,708)
Adjustment for former related parties		(1,372,242)		(16,441)
Balance, end of year	$	198,586	$	1,410,440

Before-Tax

Amount

Tax Effect

Net-of-Tax

Amount

Unrealized holding losses arising during period	$	(136,065)	$	51,705	$	(84,360)

Less reclassification adjustment for gains
recognized in net income		-		-		-

Unrealized holding loss on available for sale
securities, net of taxes	$	(136,065)	$	51,705	$	(84,360)

	2004		2003
	Recorded		Recorded
	Book		Book
	Balance	Fair Value	Balance	Fair Value
Financial Assets:
Cash and due from banks	$ 6,670	$ 6,670	$ 4,024	$ 4,024
Federal funds sold	37,500	37,500	15,000	15,000
Short-term investments	11,460	11,460	10,431	10,431
Available for sale securities	76,269	76,269	90,562	90,562
Federal Reserve Bank stock	693	693	691	691
Federal Home Loan Bank stock	1,297	1,297	1,077	1,077
Loans receivable, net	263,875	265,206	214,421	218,064
Accrued interest receivable	1,758	1,758	1,471	1,471

Financial Liabilities:
Demand deposits	$ 42,584	$ 42,584	$ 30,477	$ 30,477
Savings deposits	22,104	22,104	23,793	23,793
Money market deposits	72,451	72,451	69,504	69,504
NOW accounts	26,815	26,815	22,850	22,850
Time deposits	203,052	206,539	143,369	148,005
Repurchase agreements	-	-	5,700	5,700
FHLB borrowings	8,000	8,082	17,000	17,107
Subordinated debt	8,248	8,248	8,248	8,248
Collateralized borrowings	-	-	249	249

Unrecognized financial instruments

Loan commitments on which the committed interest rate is less than the current market rate were insignificant at December 31, 2004 and 2003. The estimated fair value of fee income on letters of credit at December 31, 2004 and 2003 was insignificant.

The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk.

Note 18. Segment Reporting

The Company has two reportable segments, the commercial bank and the mortgage broker. The commercial bank segment provides its commercial customers with products such as commercial mortgage and construction loans, working capital loans, equipment loans and other business financing arrangements, and provides its consumer customers with residential mortgage loans, home equity loans and other consumer installment loans. The commercial bank segment also attracts deposits from both consumer and commercial customers and invests such deposits in loans, investments and working capital. The commercial bank’s revenues are generated primarily from net interest income from its lending, investment and deposit activities.

The mortgage broker solicits and processes conventional mortgage loan applications from consumers on behalf of permanent investors and originates loans for sale. Revenues are generated from loan brokerage and application processing fees received from the permanent investors, and gains and origination fees from loans sold.

Information about reportable segments, and a reconciliation of such information to the consolidated financial statements as of and for the years ended December 31, 2004 and 2003 is as follows (in thousands):

2004

Commercial

Bank

Mortgage

Broker

Consolidated

Totals

Net interest income	$	11,670	$	-	$	11,670
Noninterest income		682		2,020		2,702
Noninterest expenses		10,025		2,232		12,257
Provision for loan losses		556		-		556
Income (loss) before taxes		1,771		(212)		1,559
Assets		403,959		1,088		405,047

2003

Commercial

Bank

Mortgage

Broker

Consolidated

Totals

Net interest income	$	9,626	$	-	$	9,626
Noninterest income		851		3,963		4,814
Noninterest expenses		8,441		3,218		11,659
Provision for loan losses		563		-		563
Income before taxes		1,473		745		2,218
Assets		341,473		996		342,469

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Management allocates certain overhead expenses of the commercial bank to the mortgage broker segment. These allocations are based on a pre-determined monthly charge agreed to between the commercial bank and the mortgage broker segment. Management evaluates the performance of each segment based on profit or loss from operations before income taxes. Intersegment revenues are accounted for at amounts that assume the revenues were between unrelated third parties at the current market prices at the time of the transactions.

The Company's reportable segments are strategic business units that offer different products and services. They are managed separately because each segment appeals to different markets and, accordingly, requires different technology and marketing strategies.

The Company does not have operating segments other than those reported, the Company does not have a single external customer from which it derives 10% or more of its revenues and the Company operates in one geographical area.

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

PATRIOT NATIONAL BANCORP, INC.

The undersigned, being a duly authorized officer of Patriot National Bancorp, Inc., a corporation organized and existing under the laws of the State of Connecticut (the "Corporation"), does hereby certify:

FIRST : That Article II.(a) of the Corporation's Certificate of Incorporation be amended in its entirety to read as follows:

"(a) The total number of shares of capital stock which the Corporation shall have the authority to issue is 31,000,000 shares, consisting of 30,000,000 shares of common stock, par value two dollars ($2.00) per share, and 1,000,000 shares of serial preferred stock, without par value.

(1) Subject to all of the rights of the Preferred Stock, if any, and except as provided by law or in this Article II (or in any certificate of designations of any series of preferred stock):

(i) the holders of the common stock shall have the exclusive right to vote for the election of directors and on all other matters requiring shareholder action;

(ii) dividends may be declared and paid or set apart for payment upon the common stock out of any assets or funds of the Corporation legally available for the payment of dividends, but only when and as declared by the Board of Directors; and

(iii) upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the net assets of the Corporation shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests.

(2) The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article II, to provide by resolution for the issuance of the shares of preferred stock in one or more series, and by filing a certificate pursuant to the applicable law of the State of Connecticut, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and relative participating, optional or other special rights of the shares of each such series and the qualifications, limitations or restrictions thereof.

The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

(i) The number of shares constituting that series and the distinctive designation of the series;

(ii) The dividend rate on the shares of that series, whether dividends shall be cumulative and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

(iii) Whether the shares of that series shall have voting rights, in addition to the voting rights provided by law and, if so, the terms of such voting rights;

(iv) Whether the shares of that series shall have conversion or exchange privileges and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the Board of Directors shall determine;

(v) Whether the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(vi) Whether the shares of that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amounts of such sinking fund;

(vii) The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and

(viii) Any other relative rights, preferences and limitations of that series.

Dividends on outstanding shares of preferred stock shall be paid, or declared and set apart for payment, before any dividends shall be paid, or declared and set apart for payment, on the common stock with respect to the same dividend period.

If, upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the assets available for distribution to holders of shares of preferred stock of all series shall be insufficient to pay such holders the full preferential amount to which they are entitled, then such assets shall be distributed ratably among the shares of all series of preferred stock in accordance with the respective preferential amounts (including unpaid cumulative dividends, if any) payable with respect thereto."

SECOND : That, pursuant to Section 33-800 of the Connecticut General Statutes, the amendment was duly adopted by the shareholders of the Corporation on June 15, 2004 at the Corporation's 2004 Annual Meeting of Shareholders with 1,575,870 shares of

Common Stock, par value $2.00 per share (the "Common Stock"), cast in favor of the amendment, 140,476 shares cast against the amendment and 2,568 abstaining, such number of votes being sufficient for approval of such amendment. On the Record Date established for the Meeting, there were 2,428,607 shares of Common Stock outstanding and entitled to vote and 2,224,385 shares of Common Stock present in person or by proxy at the Meeting.

THIRD : That the amendment was duly adopted and approved by the Corporation's shareholders in the manner required by Sections 33-600 to 33-998 of the Connecticut General Statutes, and by the Certificate of Incorporation.

FOURTH : That all other provisions of the Certificate of Incorporation are unchanged.

IN WITNESS WHEREOF , the undersigned officer is authorized to execute this amendment.

Dated: July 16, 2004


	By: /s/ Philip W. Wolford
	Name: Philip W. Wolford
	Title: COO & Secretary

Change of Control Agreement, dated as of May 1, 2001 between Martin G. Noble and Patriot National Bank

See attached PDF

EMPLOYMENT AGREEMENT

This Employment Agreement dated as of January 1, 2005 is by and between Patriot National Bank, a national banking association ("Patriot") and Marcus Zavattaro (the "Executive").

RECITALS

Patriot desires to employ the Executive and to have the benefit of his skills and services, and the Executive desires to be employed by Patriot on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises, terms, covenants and conditions set forth herein, and the performance of each, the parties, intending legally to be bound, hereby agree as follows:

AGREEMENTS

Section 1. Definitions. For purposes of this Agreement, the following terms have the meanings set forth below:

" Board " means the Board of Directors of Patriot as same is constituted from time to time.

" Business " means the business operations of the Residential Lending Group of Patriot National Bank, which consists of the residential mortgage brokerage origination business as it exists on the date hereof.

" Cause " means (a) the commission by the Executive of any act, on or after the date of this Agreement, constituting, as to any cash funds or other receipts of Patriot, or any material property of Patriot or any other Person, (i) theft, (ii) embezzlement, (iii) fraud, (iv) gross misconduct, (v) dishonesty or (vi) or misappropriation of material property under applicable law; (b) the conviction of the Executive of (i) a crime resulting in material injury to the business or property of Patriot or (ii) a felony; (c) the material breach by the Executive of this Agreement, including but not limited to the failure by the Executive to follow all reasonable and lawful directions of the Board as to any material matter, or the taking of any action by the Executive that would be reasonably likely to cause material injury to Patriot or that would be in conflict with any material interest to Patriot within a reasonable period of time following Executive's receipt of written notice thereof by Patriot, which notice is sufficiently specific so as to permit Executive reasonably to cure such misconduct; or (d) the misuse or unlawful use of drugs, alcohol or other controlled substances in contravention of written policies of Patriot that are applicable to all employees of Patriot.

" Confidential Information " means information that was or is used, developed or obtained by Patriot in connection with its business, including (a) products or services, (b) fees, costs and pricing structures, (c) analyses, (d) computer software, including operating systems, applications and program listings, (e) flow charts, manuals and documentation, (f) data bases, (g) accounting and business methods, (h) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (i) other copyrightable works, (j) all technology and trade secrets, and (k) all similar and related information in whatever form or medium. Notwithstanding the foregoing, this Agreement imposes no obligation upon the Executive with respect to Confidential Information which (a) was known to the Executive before receipt from Patriot, (b) is or becomes publicly available through no fault of the Executive, (c) is disclosed to the Executive by a third party without a duty of confidentiality on the part of the third party to Patriot, (d) is subsequently independently developed by the Executive without a breach of this Agreement, or (e) is required to be disclosed by the Executive in a judicial or administrative proceeding, provided that the Executive gives Patriot reasonable advance notice of such required disclosure so that Executive may contest the disclosure or seek a protective order.

" Effective Date " means the date of this Agreement.

" Employment Period " has the meaning set forth in Section 5 of this Agreement.

" Executive " means Marcus Zavattaro.

" Permanent Disability " shall have occurred if as a result of physical or mental incapacity, the Employee shall have been incapable of performing Employee's duties hereunder for a period in excess of 120 consecutive days in any 6 month period, or an aggregate of 240 days in any 12 month period.

" Person " means an individual, a partnership, a corporation, a limited liability company, an association, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

" RLG " means the Residential Lending Group of Patriot.

" Reimbursable Expenses " has the meaning set forth in Section 4.4 of this Agreement.

" Subsidiary " means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or a combination thereof, or (b) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of the Person or a combination thereof. For purposes of this Agreement, a Person or Persons will be deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons are allocated a majority of partnership, limited liability company, association or other

business entity gains or losses or control the managing director or member or general partner of such partnership, limited liability company, association or other business entity.

" Termination Date " shall mean December 31, 2005.

Section 2. Employment. Patriot hereby employs the Executive, and the Executive hereby accepts employment with Patriot, upon the terms and conditions set forth in this Agreement, for the Employment Period provided in Section 5.

Section3. Position and Duties.

3.1 Position. The Executive shall hold the position of Executive Vice President of Patriot National Bank, and the title Division Sales Manager of the Residential Lending Group of Patriot National Bank. During the Employment Period, the Executive will perform such reasonable executive and management duties as may, from time to time, be determined and assigned to him by the Chairman, Chief Executive Officer, President and/or the Management Committee of Patriot National Bank, which duties shall be similar to the services the Executive rendered to RLG in the past and shall relate primarily to the residential real estate mortgage origination business of Patriot and its affiliates. Patriot shall not require the Executive to relocate to any office of Patriot outside of Fairfield County, Connecticut.

3.2 Performance of Duties; Other Activities. The Executive shall devote his best efforts, attention and skills toward performing his duties on behalf of Patriot, and his full business and professional time to fully and faithfully perform such duties and responsibilities to the best of his abilities in a diligent, trustworthy, businesslike and efficient manner. The Executive shall do such traveling as may reasonably be required in connection with the performance of his duties and responsibilities hereunder, provided that the Executive will not be assigned to regular duties such as would require him to relocate his permanent residence.

3.3 Reporting. The Executive will report to the Chairman, Chief Executive Officer, President and/or the Management Committee of Patriot National Bank.

Section 4 Compensation and Benefits.

4.1 Compensation. The compensation payable to the Executive by Patriot during the Employment Period is set forth on Schedule A hereto.

4.2 Executive Stock Purchases and Stock Options. The Executive may be granted options and opportunities to purchase Patriot Common Stock consistent with stock purchase plans and option plans provided to senior management of Patriot and as may be awarded in the sole discretion of Patriot's Board of Directors from time to time.

4.3 Benefits. In addition to the aforesaid compensation, the Executive shall be entitled to be included under the same rules or restrictions in any employee welfare and retirement plan or program of Patriot generally available to its employees and or officers, including, without limitation, plans for hospital services, medical services benefits, sick pay, dental and other health plans, as well as the following benefits during the Employment Period:

(a)	four weeks of paid vacation per year during the Employment Period;

(b)	five personal/sick days per year;

(c)	participation in the 401K Plan of Patriot consistent with the participation afforded other similarly positioned Patriot executives.

4.4 Expenses. Patriot shall reimburse the Executive for any and all reasonable expenses incurred by him in the course of performing his duties under this Agreement which are consistent with Patriot's policies in effect from time to time with including business travel, entertainment, mileage expenses and other business expenses ("Reimbursable Expenses"), subject to Patriot's requirements with respect to reporting and documentation of expenses.

Section 5 Employment Period and Termination.

5.1 Employment Period. The Executive's employment hereunder shall commence on the Effective Date, and, unless renewed or modified by written agreement between Patriot and the Executive, the Employment Period will terminate on the "Termination Date"; provided , however, that (a) the Employment Period shall terminate prior to such date upon the Executive's death or Permanent Disability, and (b) the Employment Period may be terminated by Patriot at any time prior to such date, if such termination shall be for Cause. The Executive and Patriot agree to begin negotiations to renew this employment agreement by September 15, 2005 and to use their best efforts to

complete negotiations by October 15, 2005 provided, however, that neither the Executive nor Patriot shall have any legal obligation to renew this employment agreement.

5.2 Unjustified Termination. Except as otherwise provided in Section 5.3 below, if the Employment Period shall be terminated by Patriot prior to the Termination Date for any reason other than (a) for Cause, or (b) as a result of the death or Permanent Disability of the Executive (collectively, an "Unjustified Termination"), the Executive shall, so long as the Executive has not breached and does not breach the provisions of Sections 6, 7 or 8 of this Agreement, be entitled to receive during the unexpired portion of the Employment Period (i) continuation of his compensation, (ii) reimbursement of all Reimbursable Expenses incurred by the Executive prior to the termination of the Employment Period, and (iii) continuation of all medical benefits.

5.3 Justified Termination. If the Employment Period shall be terminated by Patriot prior to the Termination Date (a) for Cause, (b) as a result of the Executive's resignation, or (c) as a result of the death or permanent disability of the Executive (collectively, a "Justified Termination"), the Executive shall be entitled to receive his compensation through the date of termination and reimbursement of all Reimbursable Expenses incurred by the Executive prior to the termination of the Employment Period. A termination for Cause shall become effective on the date designated by Patriot.

5.4 Benefits. Except as otherwise required by law, all of the Executive's rights to fringe benefits under this Agreement, if any, accruing after the termination of the Employment Period as a result of a Justified Termination will cease upon such Justified Termination.

Section 6. Non-Competition Agreement.

(a) The Executive covenants and agrees that during the Employment Period, and for a period of 1 year following the Termination Date (the "Restricted Period") for any reason (excluding an Unjustified Termination by Patriot) of such employment, he will not, without the prior written consent of Patriot, on his own behalf or in the service or on behalf of others anywhere in Westchester, Nassau or Suffolk counties in the State of New York or in the State of Connecticut as an owner, manager, stockholder (except as a holder of no more than 1% of the issued and outstanding stock of a publicly traded company) consultant, director, officer, principal partner, agent or employee of any business entity, participate in the development or provision of goods or services in the area of residential conforming and non-conforming mortgage origination. The enforcement, which is at the discretion of Patriot, of this Section 6, for the period following the Termination Date, as a result of either (i) a non-renewal of the Employment Period under Section 5.1, or (ii) an Unjustified Termination under Section 5.2, shall be conditioned upon Patriot paying to the

Executive the compensation payable under Section 4.1, Schedule A #1 - Salary/ Commission during the entire Restricted Period (at 75% of the amount and in the same manner as paid during the final year immediately preceding the Employment Period).

(b) The Executive covenants and agrees that during the Restricted Period, the Executive will refrain from interfering with the employment relationship between Patriot and its employees and will not solicit any of such employees for employment by an entity other than Patriot.

Section 7 Delivery of Materials Upon Termination of Employment. As requested by Patriot from time to time and upon the termination of the Executive's employment with Patriot for any reason, the Executive will promptly deliver to Patriot all copies and embodiments, in whatever form or medium, of all Confidential Information in the Executive's possession or within his control irrespective of the location or form of such material and, if requested by Patriot, will provide Patriot with written confirmation that all such materials have been delivered to Patriot.

Section 8. Nondisclosure and Non-use of Confidential Information. The Executive will not, at any time, disclose or use any Confidential Information of which the Executive is or becomes aware, whether or not such information is developed by him, except to the extent that such disclosure or use is directly related to and required by the Executive's performance of duties assigned to the Executive pursuant to this Agreement.

Section 9. Affiliates; Equitable Relief . The Executive acknowledges that a breach or threatened breach by him of any of his covenants contained in Sections 6, 7 and 8 of this Agreement could cause irreparable harm to Patriot for which it would have no adequate remedy at law. Accordingly, and in addition to any remedies which Patriot may have at law, in the event of an actual or threatened breach by the Executive of his covenants contained in Sections 6, 7 and 8 of this Agreement, Patriot shall have the absolute right to apply to any court of competent jurisdiction for such injunctive or other equitable relief as such court may deem necessary or appropriate in the circumstances.

Section 10. No Prior Agreements. The Executive hereby represents and warrants to Patriot that the execution of this Agreement by Executive, his employment by Patriot, and the performance of his duties hereunder will not violate or be a breach of any agreement with a former employer, client, or any other Person. Further, Executive agrees to indemnify and hold harmless Patriot and its officers, directors, and representatives for any claim, including, but not limited to, reasonable attorney's fees and expenses of investigation, of any such third party that such third party may now have or may hereafter come to have against Patriot or such other persons, based upon or arising out of any

non-competition agreement, invention, secrecy, or other agreement between Employee and such third party that was in existence as of the date of this Agreement. To the extent that Employee had any oral or written employment agreement or understanding with Patriot, this Agreement shall automatically supersede such agreement or understanding, and upon execution of this Agreement by Employee and Patriot, such prior agreement or understanding automatically shall be deemed to have been terminated and shall be null and void.

Section 11 Miscellaneous.

11.1 Remedies. The parties to this Agreement shall have all rights and remedies set forth in this Agreement, all rights and remedies which either party has been granted at any time under any other agreement or contract and all of the rights which either has under any law. Both parties will be entitled to enforce such rights specifically, without posting a bond or other security, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law or available in equity.

11.2 Waivers and Amendments. The provisions of this Agreement may be amended or waived only by a written agreement executed and delivered by Patriot and the Executive. No other course of dealing between the parties to this Agreement or any delay in exercising any rights hereunder will operate as a waiver of any rights of any such parties.

11.3 Successors and Assigns. All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and assigns, whether so expressed or not; provided that the Executive may not assign his rights or delegate his obligations under this Agreement without the written consent of Patriot.

11.4 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

11.5 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all of which counterparts taken together will constitute one and the same agreement.

11.6 Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

11.7 Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient, two business days after the date when sent to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands, and other communications will be sent to the Executive and to Patriot at the addresses set forth below.

If to the Executive:

Marcus Zavattaro

c/o Residential Lending Group of Patriot National Bank

1177 Summer Street

Stamford, CT 06905

And

Marcus Zavattaro

1 Highmeadow Road

Old Greenwich, CT 06870

If to Patriot:

Patriot National Bank

900 Bedford Street

Stamford, CT 06901

Attn: Chairman

or to such other address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party.

11.8 No Third Party Beneficiary. This Agreement will not confer any rights or remedies upon any person other than Patriot, the Executive and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns.

11.9 Entire Agreement. This Agreement constitutes the entire agreement among the parties and supersedes any prior understandings, agreements or representations by or among the parties, written or oral, that may have related in any way to the subject matter hereof.

11.10 Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. Any reference to any federal, state, local or

foreign statute or law will be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The use of the word "including" in this Agreement means "including without limitation" and is intended by the parties to be by way of example rather than limitation.

11.11 Life Insurance. The Executive agrees that Patriot shall have the right to obtain life insurance on the Executive's life, at the sole expense of Patriot, as the case may be, and with Patriot as the sole beneficiary thereof. The Executive shall (a) cooperate fully in obtaining such life insurance, (b) sign any necessary consents, applications and other related forms or documents and (c) take any reasonably required medical examinations.

11.12 Survival. Sections 6, 7, 8 and 9, of this Agreement will survive and continue in full force in accordance with their terms notwithstanding any termination of the Employment Period.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	PATRIOT NATIONAL BANK


	By: /s/ Angelo De Caro
	Its Chairman

	/s/ Marcus Zavattaro
	Marcus Zavattaro

SCHEDULE A

Compensation

Residential Lending Group

1. Salary / Commission. The Executive shall receive sixty (60%) percent of the fee income generated by the Residential Lending Group of Patriot National Bank from mortgage transactions for customers directly obtained by the Executive. The annual amount payable pursuant to the preceding sentence shall not exceed Four Hundred Thousand ($400,000.00) Dollars per year, but shall not be less than One Hundred Fifty Thousand ($150,000.00) Dollars per year. This salary will be payable by Patriot in regular installments in accordance with the general payroll practices of Patriot as in effect from time to time, initially at the rate of One Hundred Fifty Thousand ($150,000.00) Dollars per year until such time as Two Hundred and Fifty Thousand ($250,000.00) Dollars in fee income has been generated, and thereafter, such draw rate will be adjusted to reflect actual monthly fee income generation.

The Executive shall not be entitled to receive salary/commissions in respect of new lines of business generated within the Residential Lending Group of Patriot National Bank (for example, warehouse lending), provided that any such additional or new business generated by the Executive shall be taken into account by Patriot's Management Committee and Board of Directors in considering possible bonuses for the Executive.

2. Employee Override. In addition, if the Residential Lending Group earns $225,000.00 after-tax (after deduction of all expenses, salaries, commissions and deduction for any employee override payments described below), the Executive shall receive payments equal to (i) five (5%) percent of the commissions paid to the employees reporting to the Executive where such employees earn fifty (50%) percent or less of the fee income generated by such employees and (ii) three (3%) percent of the commissions paid to the employees reporting to the Executive where such employees earn over fifty (50%) percent of the fee income generated by such employees. The amount of this employee override payment shall be payable annually after the results of the annual audit are certified provided that the Executive is employed by Patriot on the last day of the Employment Period.

3. Profit Participation . After such time as the Residential Lending Group earns $330,000 (after deduction of all expenses, salaries, commissions and employee override payments and profit participation payments), the Executive shall receive Twenty Five (25%) percent of the after-tax profits of the Business over Three Hundred and Thirty Thousand ($330,000.00) Dollars (calculated on a after-tax basis). In calculating profits for

purposes of this paragraph, the revenues and expenses of the Business shall be accounted for in accordance with generally accepted accounting principles, consistently applied.

4. RLG Referral Credits . In calculating profits for purposes of paragraph 3 above, the Residential Lending Group of Patriot National Bank will receive credit for referral fees for any loans booked by Patriot and demand deposits maintained at Patriot, respectively, which are referred to Patriot by the Executive. Such credits will not be included in calculating the salary, commissions or RLG division profits described in paragraph 1 above. Such credits shall be in the following amounts:

(i) Residential First Mortgages -- One (1%) percent of principal, credited in twelve (12) equal monthly installments following the date such loan is booked, provided such loan remains on the books during such time;

(ii) Commercial Loans -- One (1%) percent of principal (renewals of commercial loans and commercial lines of credit do not qualify);

(iii) Bridge Loans -- one quarter of one percent (.25%) of the average annual balance for the first year;

(iv) Home Equity and Other Lines of Credit -- one-half of one percent (0.50%) of the average annual balance for the first year;

(v) Deposits -- Credited on a schedule equivalent to the schedule applicable for other loan officers of Patriot as determined by the Management Committee and the Board of Directors from time to time (see Schedule B attached);

(vi) No referral credits will be given on residential mortgages, HELOC, or end-financing on construction loans originated by other Patriot employees, underwritten by Patriot and held in Patriot's portfolio.

(vii) The Profit Participation amount shall be payable on an annual basis after the results of the annual audit are certified provided that the Executive is employed on the last day of the Employment Period.

5 . Executive job description - see schedule “C”.

SCHEDULE B

Assumes a Base Salary of $150,000
% of Goal		90%	100%	125%	150%	175%	200%
% of Bonus Target Pay Out		75%	100%	125%	150%	175%	200%
Pay Out	Deposits	$3,936	$6,000	$7,500	$11,252	$13,124	$30,000

Deposits:

$1,800,000 in new average deposits for the calendar year 2005 comprised of checking, savings and money market accounts, of which at least $600,000 shall be non-interest bearing checking accounts. CD's are excluded.

SCHEDULE C

Marcus Zavattaro

Job Responsibilities - 2005

Residential Lending Division

Includes but not limited to:

·	Maintain high ethical standards for division

·	Recruit and train loan originators

·	Assist loan originators in structuring and closing deals

·	Manage the resolution of any customer related issues

·	Grow our revenue stream by hiring more loan originators, offering additional types

of loans (B and C, FHA, etc.)

·	Establish loan origination officers in appropriate geographical locations, while

considering the potential for possible bank branch expansion

·	Encourage loan originators to seek out commercial loans

·	Establish and cultivate new investor relationships

·	Keeping aware of new technology to support our employees and business

·	Administration and budgeting

PATRIOT NATIONAL BANCORP, INC.

CODE OF CONDUCT FOR

SENIOR EXECUTIVE FINANCIAL OFFICERS

____________________________________________________________________

Introduction

Patriot National Bancorp, Inc. and its subsidiaries (the “Company”) are committed to the highest standards of ethical conduct in the fulfillment of our Goals and Values. Our reputation for integrity and honesty must be preserved and strengthened as we grow into new markets. Our reputation provides us with a competitive advantage in the financial services industry and it is fundamental to the way we do business.

This Code of Conduct for Senior Financial Officers has been adopted by the Board of Directors of Patriot National Bancorp, Inc. to promote honest and ethical conduct, proper disclosure of financial information in the Company’s periodic reports, and compliance with applicable laws, rules, and regulations by the Company’s senior officers who have financial responsibilities.

Applicability

As used in this Code, the term Senior Financial Officer means the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer.

Principles and Practices

In performing his or her duties, each Senior Financial Officer must:

(1)	maintain high standards of honest and ethical conduct and avoid any actual or apparent conflict of interest as defined in the Company’s Code of Ethics;

(2)	report to the Audit Committee of the Board of Directors any conflict of interest that may arise and any material transaction or relationship that reasonably could be expected to give rise to conflict;

(3)	provide; or cause to be provided, full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with or submits to the Securities and Exchange Commission and in other public communications;

(4)	comply and take all reasonable actions to cause others to comply with applicable governmental laws, rules, and regulations; and

(5)	promptly report violations of this Code to the Audit Committee.

Senior Financial Officers must also comply with the Code of Ethics applicable to the Company’s directors, officers, and employees generally.

Waiver

Any request for a waiver of any provision of this Code must be in writing and addressed to the Audit Committee. Any waiver of this Code will be disclosed promptly on Form 8-K or any other means approved by the Securities and Exchange Commission.

Compliance and Accountability

The Audit Committee will assess compliance with this Code, report material violations to the Board of Directors, and recommend to the Board appropriate action.

Each Senior Executive Financial Officer is required to complete an Annual Statement of Compliance with the Code which will be filed with the Corporate Secretary.

ANNUAL REPORT OF COMPLIANCE WITH THE SENIOR EXECUTIVE FINANCIAL OFFICERS’ CODE OF CONDUCT FOR PATRIOT NATIONAL BANCORP, INC. AND/OR SUBSIDIARIES

I, _____________________, A SENIOR EXECUTIVE FINANCIAL OFFICER OF PATRIOT NATIONAL BANCORP, INC., HAVE REVIEWED THE CODE OF CONDUCT, AND HAVE COMPLIED, AND WILL IN THE FUTURE COMPLY, WITH THE CODE AS APPLICABLE TO ME.

___________________	_____________________________
DATE	SIGNATURE



	______________________________
	NAME, PLEASE PRINT

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statement of Patriot National Bancorp, Inc. on Form S-3 (No. 333-100981) of our report dated March 3, 2005, which appears in the Financial Report following page 33 of the Annual Report on Form 10-KSB of Patriot National Bancorp, Inc. for the year ended December 31, 2004.

/s/ McGladrey & Pullen, LLP

New Haven, Connecticut

March 24, 2005

EXHIBIT 31 (1)

CERTIFICATION

BY CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14

I, Angelo De Caro, certify that:

1. I have reviewed this annual report on Form 10-KSB of Patriot National Bancorp, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Omitted as permitted by Exchange Act Release No. 47986];

(c) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.


	/s/ Angelo De Caro
	Angelo De Caro,
	Chairman and Chief Executive Officer
	(Principal executive officer)

March 22, 2005

EXHIBIT 31 (2)

CERTIFICATION

BY PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13A-14

I, Robert F. O’Connell, certify that:

1. I have reviewed this annual report on Form 10-KSB of Patriot National Bancorp, Inc;

(b) [Omitted as permitted by Exchange Act Release No. 47986];

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.


	/s/ Robert F. O’Connell
	Robert F. O’Connell
	Senior Executive Vice President
	(Principal financial officer)

March 22, 2005

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Patriot National Bancorp, Inc. (the “ Company ”) on Form 10-KSB for the year ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “ Report ”), we, Angelo De Caro and Robert F. O’Connell, the Chief Executive Officer and the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


	/s/ Angelo De Caro
	Angelo De Caro
	Chief Executive Officer



	/s/ Robert F. O’Connell
	Robert F. O’Connell
	Chief Financial Officer

March 22, 2005

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission and shall not be considered filed as part of the Report.

Unrealized holding losses arising during period	$	(1,111,578)	$	422,399	$	(689,179)

Add reclassification adjustment for gains
recognized in net income		(307,739)		116,941		(190,798)

Unrealized holding loss on available for sale
securities, net of taxes	$	(1,419,317)	$	539,340	$	(879,977)