Company: PNBK
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001628280-25-017837
Chunk: 108

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-04-15
Form: 10-K
Item: Item 7
Chunk 108
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 The Tier 1 capital was $55.5 million, or 7.58% of risk-weighted assets, also below the required level of 10.00%. The Tier 1 leverage capital was $55.5 million, or 5.79% of average assets, falling short of the required 9.00%. The total risk-based capital was $56.5 million or 7.71% of risk-weighted assets, below the required 11.50%. During 2024, the Bank significantly reduced its average and risk-based assets to work towards achieving the IMCR targets.  Average assets are down $124.4 million to $959.0 million as of December 31, 2024 from $1.1 billion as of December 31, 2023, reflecting the actions of the Company during the year to lower assets.

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On January 14, 2025, the Bank entered into an agreement with the OCC, pursuant to which the Bank agreed, through its board of directors to take certain actions in the areas of strategic planning, capital planning, Bank Secrecy Act / Anti-Money Laundering risk management, payment activities oversight, credit administration and concentrations risk management.  The Bank’s Board appointed a Compliance Committee in January 2025, as required, to oversee the progress and compliance with the OCC Agreement.  

The Capital Plan and Higher Minimums Article in the OCC Agreement established capital minimums that need to be met and maintained.  The Bank is required to maintain the following ratios: a common equity tier 1 capital ratio of 10.00%, a Tier 1 capital ratio of 10.00%, a Tier 1 leverage ratio of 9.00% and a total capital ratio of 11.50%. As of December 31, 2024, the Bank did not meet all of its regulatory capital requirements.  The Private Placement results in capital ratios that are in excess of the minimums required by the OCC Agreement. 

On January 17, 2025, the OCC notified the Bank that, in connection with the entry into the OCC Agreement, the individual minimum capital ratios previously established on April 17, 2024 for the Bank has been terminated.