Company: PNBK
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001628280-25-052358
Chunk: 238

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 238
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2025, compared to 2.18% for the quarter ended September 30, 2024. For the nine months ended September 30, 2025 and 2024, the net interest margin was 1.90% and 2.18%, respectively. The increase in interest margins for the three and nine months ended September 30, 2025 compared to the same periods in 2024, was primarily associated with an increase in the cost of deposits and other borrowings due to the significant rise in market interest rates and a decline in loan interest income due to the declining loan balance, partially mitigated by the rise in variable rate interest earning assets.

68

Provision for Credit Losses ("PCL")

For the three months ended September 30, 2025, the provision for credit losses was -$0.4 million, consisting of a -$0.4 million loan provision and a $27,000 credit for off-balance-sheet exposure reserves. In comparison, for the three months ended September 30, 2024, the provision for credit losses was $1.0 million, including a $1.1 million loan provision and a $58,000 credit for off-balance-sheet exposure reserves. 

For the nine months ended September 30, 2025, the PCL was $1.8 million, which included a $2.0 million loan provision and a $128,000 credit for off-balance-sheet exposure reserves. For the nine months ended September 30, 2024, the provision was $4.8 million, consisting of a $4.9 million provision and a $94,000 credit for off-balance-sheet exposure reserves.

In 2025, the Bank has been selectively managing down its credit exposure in certain higher-risk areas. The loan portfolio declined from $755.7 million as of September 30, 2024, to $588.7 million as of September 30, 2025. This reduction in credit exposure has required a lower level of reserves. Consequently, the ACL for loans outstanding decreased from $15.0 million as of September 30, 2024, to $7.2 million as of September 30, 2025.

One key driver in both the level of outstanding loans and reserves is the pool of purchased unsecured consumer loans, which decreased from $26.1 million as of September 30, 2024 to $1.