Company: PNBK
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001628280-25-025485
Chunk: 78

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 78
---
2024 to $4.0 million for the three months ended March 31, 2025. 

The net interest margin was 1.64% for the three months ended March 31, 2025, compared with 2.20% for the three months ended March 31, 2024.  The decline in interest margins was primarily associated with an increase in the cost of deposits and other borrowings due to the significant rise in market interest rates, only partially mitigated by the rise in variable rate interest earning assets. The decline in net interest margin also reflected the lowering of loan balances during a period of rising interest rates.

Provision for Credit Losses ("PCL")

Provision for credit losses for the three months ended March 31, 2025, amounted to $733,000. This encompassed a $756,000 PCL  on loans and a $23,000  of reserve for credit losses on unfunded commitments. For the three months ended March 31, 2024, the PCL was $658,000, consisting of $653,000 PCL on loans and a $5,000 PCL on unfunded commitments. 

For the three months ended March 31, 2025, the Bank has been selectively managing down its credit exposure in certain higher-risk areas. The loan portfolio declined from $810.3 million as of March 31, 2024, to $674.2 million as of March 31, 2025. This reduction in credit exposure has required a lower level of reserves. Consequently, the ACL for loans outstanding decreased from $13.8 million as of March 31, 2024, to $6.7 million as of March 31, 2025.

54

Non-interest income 

Non-interest income for the three months ended March 31, 2025 was $2.73 million, compared to $2.25 million for the three months ended March 31, 2024. The increase was primarily attributable to higher non-interest income from the Bank's Digital Payments division of $794,000.

Non-interest expense

Non-interest expense for the three months ended March 31, 2025 increased by $1.5 million to $8.7 million, compared to $7.2 million for the three months ended March 31, 2024. The primary drivers of this increase were higher salaries and benefit expenses of $355,000, professional and