Company: PNBK
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001628280-25-040370
Chunk: 91

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 91
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 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.

62

Provision for Credit Losses ("PCL")

For the three months ended June 30, 2025, the provision for credit losses was $1.5 million, consisting of a $1.6 million loan provision and a $78,000 credit for off-balance-sheet exposure reserves. In comparison, for the three months ended June 30, 2024, the provision for credit losses was $3.1 million, including a $3.1 million loan provision and a $41,000 credit for off-balance-sheet exposure reserves. 

For the six months ended June 30, 2025, the PCL was $2.3 million, which included a $2.4 million loan provision and a $101,000 credit for off-balance-sheet exposure reserves. For the six months ended June 30, 2024, the provision was $3.8 million, consisting of a $3.8 million provision and a $36,000 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 $810.3 million as of June 30, 2024, to $587.5 million as of June 30, 2025. This reduction in credit exposure has required a lower level of reserves. Consequently, the ACL for loans outstanding decreased from $13.8 million as of June 30, 2024, to $7.8 million as of June 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 $32.3 million as of June 30, 2024 to $12.4 million as of June 30, 2025.  Correspondingly, the reserves for this pool also fell, declining from $4.6 million as of June 30, 2024 to $2.7 million as of June 30, 2025. 

Non-interest income 

Non-interest income for the three months ended June 30, 2025 was $2