Company: PNBK
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001628280-25-040370
Chunk: 73

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 73
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 methodology and calculations in the second quarter of 2025.

The application of the chosen Q-Factors added a net 12 bps to the overall reserves for Q2. The model-only ACL yielded 1.21% of total reserves – and the addition of 12 bps of Q-Factors increased the final ACL to 1.33% of total loans. The Q-Factors make up 9% of the total ACL calculation in Q2, a reasonable addition for the introduction.

The Q-Factors are applied to specific loan pools and are quantified using management’s best estimates. As noted below, a total of 15 bps of Q-Factors was applied, but because the application is on a pool-by-pool basis, the net effect is only 12 bps across total loans.

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The following table provides detail of activity in the allowance for credit losses on loans for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,Six Months Ended June 30,(In thousands)2025202420252024Balance at beginning of the period$6,729 $13,777 $7,305 $15,925 Charge-offs:Commercial Real Estate— — (635)(158)Residential Real Estate— — — (21)Commercial and Industrial(11)(404)(130)(814)Consumer and Other(754)(1,849)(1,670)(4,372)Total charge-offs(765)(2,253)(2,435)(5,365)Recoveries:Commercial and Industrial20 72 106 78 Consumer and Other209 260 461 565 Total recoveries229 332 567 643 Net charge-offs(536)(1,921)(1,868)(4,722)Provision for credit losses1,602 3,133 2,358 3,786 Balance at end of the period$7,795 $14,989 $7,795 $14,989 Ratios:Net charge-offs to average loans (annualized)(0.08)%(0.24)%(0.55)%(1.15)%Allowance for credit losses to total loans1.33 %1.93 %1.33 %1.93 %Allowance for credit losses to nonaccrual loans32.15 %40.11 %32.15