Company: PNBK
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001628280-25-040370
Chunk: 114

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 114
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 ("DTA") were zero both at June 30, 2025 and December 31, 2024 as Patriot recorded a full valuation allowance against all of the DTAs as of September 30, 2024. Patriot evaluates its ability to realize its deferred tax assets on a quarterly basis. In doing so, management considers all available evidence, both positive and negative, to determine whether it is more likely than not that the deferred tax assets will be realized. The Company will continue to evaluate its ability to realize its deferred tax assets. If future evidence suggests that it is more likely than not that additional deferred tax assets will be realized, the valuation allowance will be adjusted.

The effective tax benefit rate for the three months ended June 30, 2025 was (0.97)%, compared to the effective tax benefit rate for the three months ended June 30, 2024 of (23.07)%. The effective tax benefit rates for the six months ended June 30, 2025 and June 30, 2024 were (0.61)% and (20.25)%, respectively. The Company’s effective rate for the three and six months ended June 30, 2025 was affected by the change in the valuation allowance and for the three and six months ended June 30, 2024 was affected by state taxes and non-deductible expenses.

As of June 30, 2025, Patriot had available approximately $48.4 million of Federal net operating loss carryforwards (“NOL”) that are offset by $15.5 million in §382 limitations imposed by the Internal Revenue Code. After applying the limitation, Patriot has $32.9 million post-change NOL which do not expire. Patriot has not performed an analysis on the post-change NOL, but the potential impact of any additional limitation would not be material to the financial statements due to the fact that the NOL are fully offset by a valuation allowance.

Patriot has approximately $66.7 million of NOLs available for Connecticut tax purposes at June 30, 2025, which may be used to offset up to 50% of taxable income in any year. Approximately $63.2 million of the NOL will expire between 2030 and 2044 and approximately $3.3 million of the NOL will expire in 2055.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBB