Company: PNBK
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001628280-25-025485
Chunk: 95

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 2
Chunk 95
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2024. 

The reduction in net charge-offs for the three months ended March 31, 2025 was primary driven by a $1.6 million decrease in charge-offs related to purchased unsecured consumer loans as the portfolio balances have declined.

The average loan balance decreased by $130.6 million, from $841.1 million for the three months ended March 31, 2024, to $710.5 million for the three months ended March 31, 2025. This decrease in average loan balance reflects the Company's continued approach of limiting loan growth and allowing loans to pay down to strengthen capital ratios as the balance sheet is reduced.

As of March 31, 2025 and March 31, 2024, the ACL was $6.7 million and $13.8 million, respectively. The decrease was primarily due to significant charge-offs of non-performing CRE loans after March 31, 2024. This also impacted the ACL to total loans ratio, which was 1.00% as of March 31, 2025, compared to 1.70% as of March 31, 2024. 

The nonaccrual loan balance was $29.7 million as of March 31, 2025, compared to $19.1 million as of March 31, 2024. The allowance for credit losses to nonaccrual loans ratio was 22.65% as of March 31, 2025, compared to 72.21% as of March 31, 2024. The rate at March 31, 2024 was significantly higher due to reserves on individually evaluated CRE loans that were subsequently charged-off after March 31, 2024. 

The following table provides an allocation of allowance for credit losses on loans by portfolio segment:

(In thousands)March 31, 2025December 31, 2024Allowance for credit lossesPercent of loans in each category to total loansAllowance for credit lossesPercent of loans in each category to total loansCommercial Real Estate$2,275 59.54 %$2,241 59.30 %Residential Real Estate639 13.46 %596 13.03 %Commercial and Industrial1,168 18.15 %1,077 18.32 %Consumer and Other2,607 7.93 %3,386 8.48 %Construction8 0.57 %5