Company: PNBK
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001628280-25-052358
Chunk: 116

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 116
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 in its ACL methodology and calculations in the third quarter of 2025.

Beginning in the second quarter of 2025, the Bank implemented the use of qualitative factors (“Q Factors”) in its ACL methodology and calculations. The application of the chosen Q-Factors added a net 12 bps to the overall reserves for third quarter of 2025 – unchanged from the second quarter of 2025. The model-only ACL yielded 1.10% of total reserves – and the addition of 12 bps of Q-Factors increased the final ACL to 1.22% of total loans.

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.

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

Three Months Ended September 30,Nine Months Ended September 30,(In thousands)2025202420252024Balance at beginning of the period$7,795 $14,989 $7,305 $15,925 Charge-offs:Commercial Real Estate(144)(124)(779)(282)Residential Real Estate— — — (21)Commercial and Industrial— (122)(130)(936)Consumer and Other(292)(1,266)(1,962)(5,638)Total charge-offs(436)(1,512)(2,871)(6,877)Recoveries:Residential Real Estate1 — 1 — Commercial and Industrial3 160 109 238 Consumer and Other227 263 688 828 Total recoveries231 423 798 1,066 Net charge-offs(205)(1,089)(2,073)(5,811)Provision for credit losses(403)1,084 1,955 4,870 Balance at end of the period$7,187 $14,984 $7,187 $14,984 Ratios:Net charge-offs to average loans (annualized)(0.14)%(0.56)%(0.42)%(0.96)%Allowance for credit losses to total loans1.22 %1.98 %1.