STAMFORD, Conn., June 05, 2025 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. (NASDAQ: PNBK) (the “Company”), the parent company of Patriot Bank, N.A., today announced that it has successfully completed a registered direct offering of 8,524,160 shares of its common stock at a purchase price of $1.25 per share, raising gross proceeds of $10,655,200. The registered direct offering follows the Company’s March 20, 2025 private placement that raised over $50 million in gross proceeds from a diverse group of ...

Table of Contents x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 000-29599 PATRIOT NATIONAL BANCORP, INC. (Exact name of registrant as specified in its charter) Connecticut 06-1559137 (State or other jurisdiction of incorporation or organization) UNITED ST ...

Financial Performance - The Company reported a net loss of $39.9 million for the year ended December 31, 2024, leading to a decrease in shareholders' equity from $44.4 million in 2023 to $4.3 million in 2024[164]. - For the year ended December 31, 2024, the Company recorded a net loss of $39.9 million, compared to a net loss of $4.2 million for the year ended December 31, 2023, representing an increase in loss of approximately 850%[170]. - Interest income decreased to $52.4 million in 2024 from $59.0 million in 2023, primarily due to a reduction of $101.3 million in average loan balances[173]. - Net interest income decreased to $20.1 million in 2024 from $28.5 million in 2023, with the net interest margin declining to 2.1% from 2.8%[175]. - Non-interest income increased to $8.4 million in 2024 from $6.0 million in 2023, primarily driven by the digital payments program[178]. - Non-interest expense decreased to $32.1 million in 2024 from $32.7 million in 2023, mainly due to a prior goodwill impairment[179]. - The Company recognized a total income tax expense of $23.8 million for the year ended December 31, 2024, which included $25.1 million from the initial recognition of a full valuation allowance against deferred tax assets[155]. Capital and Liquidity - The Company completed a private placement of $57.75 million, issuing 60,400,106 shares of Common Stock at $0.75 per share and 90,832 shares of Series A Preferred Stock with a liquidation preference of $60 per share[18]. - The Private Placement closing provided additional liquidity and deferred interest payments on senior and subordinated notes until 2026[194]. - The Company has not paid any dividends since 2020 and has temporarily suspended dividend payments[110]. - The Company relies on dividends from the Bank as its primary source of revenue, and restrictions on these payments could materially affect its financial health[84]. - The Company’s total assets decreased by $81.1 million, or 7.4%, from $1.09 billion at December 31, 2023, to $1.01 billion at December 31, 2024[120]. - Cash, cash equivalents, and restricted cash increased by $96.1 million, or 144.4%, from $66.5 million as of December 31, 2023, to $162.6 million as of December 31, 2024[121]. - On-hand liquidity increased by $93.0 million from December 31, 2023, to December 31, 2024, totaling $164.0 million[192]. - Total liquidity as of December 31, 2024, was $234.0 million, up from $191.4 million in 2023, reflecting an increase in cash balances and a reduction in total liabilities[192]. Loan and Credit Quality - Gross loans held for investment declined by $141.4 million, contributing to the overall decrease in total assets[120]. - The loan portfolio declined from $848.9 million as of December 31, 2023, to $707.5 million as of December 31, 2024, indicating a reduction in credit exposure[177]. - The average loan balance decreased by $101.3 million, from $896.5 million for the year ended December 31, 2023, to $795.2 million for the year ended December 31, 2024[135]. - Nonaccrual loans increased to $25.9 million as of December 31, 2024, from $18.1 million as of December 31, 2023, representing a $7.7 million increase[137]. - The allowance for credit losses decreased to $7.3 million at December 31, 2024, compared to $15.9 million at December 31, 2023, primarily due to charge-offs of $13.6 million from two large commercial real estate loans[132]. - Net charge-offs increased to $21.2 million as of December 31, 2024, up from $17.3 million as of December 31, 2023, with a net charge-off to average loans ratio of 2.66%[134]. - The Bank's allowance for credit losses may not be sufficient to cover actual losses, necessitating significant increases in provisions that could materially impact operations and capital adequacy[73]. Regulatory and Compliance - The Company is subject to capital adequacy rules and guidelines issued by the Fed, requiring it to maintain certain minimum ratios of capital to adjusted total assets[40]. - The Bank has adopted the community bank leverage ratio (CBLR) framework, which allows for a simplified measure of capital adequacy, with a Tier 1 leverage ratio requirement of greater than 9%[52]. - As of September 30, 2023, the Bank shifted to the risk-based capital framework, reporting leverage and risk-based capital ratios[52]. - The minimum capital standards under the Prompt Corrective Action (PCA) require a common equity Tier 1 capital to risk-based assets ratio of 4.5%[53]. - The capital conservation buffer requirement was fully implemented at 2.5% on January 1, 2019, limiting capital distributions if not met[55]. - The final rule to strengthen and modernize CRA regulations will take effect on April 1, 2024, with compliance dates staggered between January 1, 2026, and January 1, 2027[50]. - The Bank's Board appointed a Compliance Committee in January 2025 to oversee compliance with the OCC Agreement, which includes maintaining higher capital ratios[205]. Market and Economic Conditions - The economic conditions in Connecticut and New York trade areas significantly impact the Bank's operations due to its limited geographic diversification[60]. - Changes in interest rates may adversely affect the Bank's net interest spread and overall profitability, as the Bank's income is derived from the spread between interest earned and interest paid[66][67]. - Inflationary pressures have risen sharply, impacting the ability of business customers to repay loans, which could adversely affect the Bank's financial condition[69]. - A deterioration in national and regional real estate markets could lead to higher loan delinquencies and increased nonperforming assets, adversely affecting the Bank's financial condition[72]. - Competition in the banking sector is intense, particularly in Fairfield County and New York City, which may limit the Bank's growth and profitability[93]. Operational Developments - The Bank reentered the residential mortgage business in 2024, originating mortgage loans through its Residential Mortgage Division[25]. - The Bank operates eight branch offices, with seven located in Connecticut and one in New York as of December 31, 2024[27]. - The Digital Payments Division (DPD) is an increasing source of lower-cost deposit balances and non-interest income for the Bank[29]. - Total deposits increased by $126.3 million from $840.3 million in 2023 to $966.6 million in 2024, driven by higher deposits in the Digital Payments Division and increased brokered deposits[159]. - Total Digital Payments deposits rose to $265.5 million in 2024, up from $213.4 million in 2023, reflecting a significant growth in this segment[159].

Core Viewpoint - Patriot National Bancorp, Inc. has announced a private placement to raise over $50 million to strengthen its equity capital and balance sheet [1] Group 1: Capital Raise and Financial Strategy - The company has entered into securities purchase agreements to raise over $50 million through the issuance of common stock and non-voting preferred stock [1] - Net proceeds from the offering will be utilized to enhance the equity capital and bolster the balance sheet of both Patriot National Bancorp and its subsidiary, Patriot Bank NA [1] - The capital raise is seen as a positive inflection point for the bank, enabling it to pursue market opportunities [3] Group 2: Leadership Changes - Steven Sugarman has been appointed as the new President and has entered into a long-term employment agreement [2] - The current CEO, David Lowery, will remain in his position until April 15, 2025, to ensure a smooth transition [2] - Lowery expressed pride in leading the successful recapitalization of Patriot Bank and acknowledged the efforts of the employees [3] Group 3: Advisory and Legal Support - Performance Trust Capital Partners, LLC acted as the strategic advisor and placement agent for the private placement [4] - Various law firms provided legal counsel for the transaction, including Michelman & Robinson LLP and Blank Rome LLP [4] Group 4: Future Outlook - The company remains committed to enhancing its digital payments platform and supporting entrepreneurs and business leaders in the tri-state community [8]

Financial Performance - Total interest and dividend income for Q3 2024 was $12,814, a decrease of 15.0% from $15,070 in Q3 2023[14] - Net interest income after provision for credit losses was $3,973 for Q3 2024, compared to $1,837 in Q3 2023, representing a significant increase of 116.0%[14] - The net loss for Q3 2024 was $26,954, compared to a net loss of $3,770 in Q3 2023, indicating a deterioration in performance[14] - Non-interest income totaled $2,115 in Q3 2024, an increase of 80.9% from $1,169 in Q3 2023[14] - The comprehensive loss for Q3 2024 was $24,196, compared to a comprehensive loss of $6,468 in Q3 2023, indicating a worsening financial position[17] - The company reported a basic loss per share of $6.78 for Q3 2024, compared to a loss of $0.95 per share in Q3 2023[14] - The accumulated deficit increased to $77,360 by September 30, 2024, from $50,406 at the end of Q2 2024[19] - The total shareholders' equity decreased to $16,386 as of September 30, 2024, down from $40,527 at the end of Q2 2024[19] - As of September 30, 2024, the company reported a net loss of $30,334,000 compared to a net loss of $5,084,000 for the same period in 2023, indicating a significant increase in losses[27] - The total comprehensive loss for the nine months ended September 30, 2024, was $28,117,000, which includes an unrealized holding gain of $2,217,000 on available-for-sale securities[22] Cash Flow and Expenses - The company’s cash flows from operating activities provided $5,255,000 in 2024, a recovery from a cash outflow of $10,548,000 in 2023[27] - Cash paid for interest increased to $25,182,000 in 2024 from $20,611,000 in 2023, reflecting higher borrowing costs[28] - The total non-interest expense for Q3 2024 was $8,396, slightly up from $8,109 in Q3 2023, reflecting a 3.5% increase[14] - Share-based compensation expense increased from $77,000 in 2023 to $120,000 in 2024, indicating a rise in employee compensation costs[27] Loans and Credit Losses - As of September 30, 2024, total loans receivable, net, amounted to $740.7 million, a decrease from $832.9 million as of December 31, 2023, reflecting a decline of approximately 11%[59] - The allowance for credit losses decreased to $14.98 million as of September 30, 2024, compared to $15.93 million as of December 31, 2023, representing a reduction of approximately 6%[59] - The total allowance for credit losses as of September 30, 2024, was $14,984,000, compared to $25,668,000 as of September 30, 2023[94] - The provision for credit losses for the three months ended September 30, 2024, included a credit on unfunded loan commitments of $58,000[89] - The Company reported charge-offs of $1,512,000 for the three months ended September 30, 2024[92] - The total recoveries for the same period were $423,000[92] - The allowance for credit loss was $177,000 as of September 30, 2024, down from $271,000 as of December 31, 2023[162] Securities and Investments - The total available-for-sale securities amounted to $107.196 million as of September 30, 2024, with gross unrealized losses of $17.651 million, reflecting a decline of 16.8% from the amortized cost[49][51] - The Company does not intend to sell its available-for-sale debt securities and believes it is more likely than not that it will not be required to sell them before recovery of their amortized cost[52] - The fair value of available-for-sale securities was $89,578 thousand as of September 30, 2024, compared to $89,187 thousand on December 31, 2023, showing a slight increase of about 0.4%[206] Capital and Regulatory Compliance - The company’s Tier 1 Capital ratio must be at least 8.0% to be considered "well capitalized" under the regulatory framework[169] - The Bank's common equity tier 1 capital was $64.5 million, or 8.19% of risk-weighted assets, below the required level of 10.00%[175] - The Bank's total risk-based capital was $73.2 million, or 9.29% of risk-weighted assets, which is below the required 11.50%[175] - The actual Tier 1 leverage capital was $64.5 million, or 6.53% of average assets, falling short of the required 9.00%[175] - The Bank significantly reduced its total and risk-based assets during 2024 to work towards achieving individual minimum capital ratios (IMCR) targets[175] Deposits and Funding - Total deposits as of September 30, 2024, were $824.9 million, a decrease from $840.3 million as of December 31, 2023[136] - The Digital Payments Division's deposits totaled approximately $235.1 million as of September 30, 2024, up from $213.4 million as of December 31, 2023[136] Miscellaneous - The Company has not paid any dividends since 2020 and has no current plans to do so[154] - The Company adopted the CECL methodology on January 1, 2023, which estimates expected credit losses over the life of financial assets[81] - The company has implemented strategies to mitigate interest rate risk by matching the maturities of its financial assets and liabilities[205]

Company Overview - Love National Union Bank is based in Fairfield County and New Haven County, Connecticut, as well as Westchester County, New York, providing various consumer and commercial banking services to individuals, small to mid-sized businesses, professionals, and municipalities [4] - The bank's product offerings include checking and savings accounts, money market accounts, term deposits, individual retirement accounts, commercial mortgages, construction loans, commercial loans, home improvement loans, home equity credit lines, and other personal loans [4] - Additional services include banking checks, drafts, ATMs, interactive teller machines, online and mobile banking, credit cards, and debit cards [4] Financial Performance - Love National Union Bank reported revenue of $15.28 million but incurred a net loss of $3.08 million, resulting in an earnings per share of -$0.77 [2] - The price-to-earnings ratio for the bank stands at -1.13, with no institutional ratings currently available for this stock [2] Stock Performance - The stock price of Love National Union Bank increased by 6.34%, currently trading at $1.96 per share with a trading volume of 374 shares and a turnover rate of 0.01% [1] - The stock exhibited an amplitude of 2.45% [1] - Within the banking sector, Love National Union Bank has shown notable gains, contributing to an overall sector growth of 0.10% [3] - The stock's amplitude is reported at 9.60%, indicating significant price movement [3]

Financial Performance - For the three months ended June 30, 2024, total interest and dividend income was $13,217,000, a decrease of 13.5% from $15,309,000 in the same period of 2023[6]. - Net interest income for the same period was $5,023,000, down 34.9% from $7,713,000 year-over-year[6]. - The net loss for the three months ended June 30, 2024, was $3,081,000, compared to a net loss of $615,000 in the same period of 2023[7]. - Basic loss per share for the three months ended June 30, 2024, was $0.77, compared to $0.16 in the same period of 2023[6]. - The total comprehensive loss for the three months ended June 30, 2024, was $3,151,000, compared to $2,256,000 in the same period of 2023[7]. - For the six months ended June 30, 2024, the net loss was $3,380,000 compared to a net loss of $1,314,000 for the same period in 2023, representing a 157% increase in losses year-over-year[17]. - Total comprehensive loss for the first half of 2024 was $3,921,000, which includes an unrealized holding loss on available-for-sale securities of $541,000[14]. Credit Losses and Provisions - The provision for credit losses increased to $3,092,000 for the three months ended June 30, 2024, compared to $1,325,000 in the same period of 2023[6]. - The provision for credit losses for the first half of 2024 was $3,750,000, slightly up from $3,545,000 in the same period of 2023[17]. - The total allowance for credit losses is $14,989,000, with $7,958,000 for individually evaluated loans and $9,272,000 for collectively evaluated loans[63]. - The total ACL for credit losses increased to $14,989,000 as of June 30, 2024, compared to $24,098,000 as of June 30, 2023, reflecting a decrease of approximately 37.9% year-over-year[61]. - The charge-offs for the six months ended June 30, 2024, totaled $5,365,000, indicating a significant increase in losses compared to previous periods[61]. Loan Portfolio and Performance - As of June 30, 2024, total loans receivable, net, amounted to $761.3 million, a decrease of 8.6% from $832.9 million as of December 31, 2023[37]. - The commercial real estate loan portfolio was $458.6 million as of June 30, 2024, down from $472.1 million at the end of 2023, reflecting a decline of 2.3%[37]. - Residential real estate loans decreased to $99.4 million from $106.8 million, a decline of 6.5%[37]. - The company’s construction loans outstanding were $3.8 million as of June 30, 2024, down from $4.3 million at the end of 2023, a decrease of 11.6%[46]. - The total loans receivable gross included $716.854 million in performing loans, $11.308 million in special mention, and $40.948 million in substandard loans[76]. Deposits and Cash Flow - The company experienced a decrease in deposits of $39,409,000 in the first half of 2024, contrasting with an increase of $2,933,000 in 2023[17]. - As of June 30, 2024, total deposits held by Patriot National Bancorp amounted to $800.9 million, a decrease of 4.67% from $840.3 million on December 31, 2023[101]. - Cash provided by operating activities for the first half of 2024 was $7,846,000, up from $3,796,000 in the same period of 2023, indicating a 106% increase[17]. - The company reported a net increase in cash, cash equivalents, and restricted cash of $27,116,000 for the first half of 2024, compared to an increase of $32,316,000 in 2023[17]. Securities and Investments - As of June 30, 2024, total available-for-sale securities amounted to $86.667 million, with gross unrealized losses of $21.474 million, reflecting a decline of 19.9% from the amortized cost[28]. - The amortized cost of U.S. Government agency and mortgage-backed securities was $79.854 million, with unrealized losses of $15.567 million as of June 30, 2024[28]. - The company does not intend to sell the debt securities and believes it is more likely than not that they will not be required to sell them before recovery of their amortized cost[31]. Capital and Regulatory Compliance - As of June 30, 2024, the total capital to risk-weighted assets ratio for Patriot National Bancorp, Inc. was 9.84%, while the Tier 1 capital ratio was 7.66%[128]. - The common equity tier 1 capital ratio for Patriot National Bancorp, Inc. was 6.72% as of June 30, 2024, compared to 10.20% for Patriot Bank, N.A.[128]. - The Bank was notified by the OCC of individual minimum capital ratios, requiring a common equity tier 1 capital ratio of 10.00% and a total risk-based capital ratio of 11.50%[129]. Interest Income and Expense - Total interest expense increased to $8.2 million for the three months ended June 30, 2024, up by $598,000 from $7.6 million in the prior year[202]. - Net interest income decreased by $2.7 million, from $7.7 million in Q2 2023 to $5.0 million in Q2 2024, attributed to lower loan balances and narrower net interest margins[202]. - The total interest income recognized for the six months ended June 30, 2024, was $35.745 million, compared to $21.609 million for the same period in 2023, reflecting an increase of approximately 65.3%[88].

Financial Performance - Total interest and dividend income for Q1 2024 was $14,001,000, an increase of 2.6% from $13,646,000 in Q1 2023[14] - Net interest income after provision for credit losses decreased to $4,746,000 in Q1 2024, down 18.1% from $5,793,000 in Q1 2023[14] - Non-interest income surged to $2,247,000 in Q1 2024, a significant increase of 169.5% compared to $835,000 in Q1 2023[14] - The net loss for Q1 2024 was $299,000, an improvement from a net loss of $699,000 in Q1 2023[14] - Basic loss per share improved to $0.08 in Q1 2024 from $0.18 in Q1 2023[14] - The company reported a comprehensive loss of $770,000 for Q1 2024, compared to a comprehensive income of $548,000 in Q1 2023[15] - For the three months ended March 31, 2024, the company reported a net loss attributable to common shareholders of $299,000, resulting in a basic and diluted loss per share of $0.08, compared to a net loss of $699,000 and a loss per share of $0.18 for the same period in 2023[109] Cash and Liquidity - Cash, cash equivalents, and restricted cash at the end of Q1 2024 totaled $92,775,000, up from $60,252,000 at the end of Q1 2023[19] - Net cash provided by operating activities was $1,799,000 in Q1 2024, compared to a net cash used of $212,000 in Q1 2023[19] - Total assets decreased by $20.2 million to $1.07 billion as of March 31, 2024, primarily due to a $38.5 million decline in loans receivable[159] - Cash, cash equivalents, and restricted cash increased from $66.5 million at December 31, 2023, to $92.8 million at March 31, 2024, reflecting a strategy to enhance balance sheet liquidity[160] Loans and Credit Quality - As of March 31, 2024, total loans receivable, net, amounted to $796.5 million, a decrease from $832.9 million as of December 31, 2023, representing a decline of approximately 4.3%[39] - The allowance for loan and lease losses decreased to $13.8 million as of March 31, 2024, from $15.9 million as of December 31, 2023, indicating a reduction of approximately 13.5%[39] - The total loans receivable, gross, was $810,323,000 as of March 31, 2024, compared to $848,859,000 at December 31, 2023[65] - The total allowance for credit losses decreased to $13,777,000 as of March 31, 2024, from $15,925,000 at December 31, 2023[63] - The total past due loans as of March 31, 2024, amounted to $7.735 million, with $783.509 million classified as current[75] - The total performing loans as of March 31, 2024, were $791.244 million, with $19.079 million classified as non-performing[75] - Nonperforming assets increased to $22.4 million as of March 31, 2024, with a nonperforming assets to total assets ratio of 2.09%[168] Deposits and Borrowings - Total deposits increased to $859,724,000 as of March 31, 2024, compared to $840,311,000 as of December 31, 2023[96] - Interest-bearing deposits totaled $750,459,000 as of March 31, 2024, up from $730,255,000 at the end of 2023[96] - Total borrowings decreased from $201.1 million at December 31, 2023, to $161.1 million as of March 31, 2024[176] - FHLB-B advances decreased from $101.0 million at December 31, 2023, to $61.0 million at March 31, 2024[178] Interest Income and Expense - Total interest expense for the three months ended March 31, 2024, was $8.6 million, which increased by $3.0 million from $5.6 million in the same period of 2023[208] - Net interest income decreased to $5.4 million for the three months ended March 31, 2024, down from $8.0 million in the same period of 2023, reflecting a lower loan balance and narrower net interest margin[208] - The net interest margin was 2.20% for the three months ended March 31, 2024, compared to 3.29% for the same period in 2023, primarily due to increased deposit costs and a decline in loan balances[209] Capital Ratios - As of March 31, 2024, the Total Capital ratio for Patriot National Bancorp, Inc. was 9.95%, while Patriot Bank, N.A. reported a ratio of 11.26%[121] - The Tier 1 Capital ratio for Patriot National Bancorp, Inc. was 7.94% as of March 31, 2024, compared to 10.40% for Patriot Bank, N.A.[121] - The Common Equity Tier 1 (CET1) Capital ratio for Patriot National Bancorp, Inc. was 7.03% as of March 31, 2024, while Patriot Bank, N.A. reported a ratio of 10.40%[121] - The Tier 1 Leverage Capital ratio for Patriot National Bancorp, Inc. was 6.53% as of March 31, 2024, compared to 8.55% for Patriot Bank, N.A.[121] Risk Management - The company has established a risk management strategy involving interest rate swaps with commercial lending customers to minimize net risk exposure[98] - The Company’s commercial and industrial loans are subject to risks including cash flow issues and economic downturns[58] - The estimated credit losses for pooled loans are calculated using a model that incorporates probability of default and loss given default[57] Accounting and Regulatory Changes - The company does not expect the adoption of ASU 2023-06 to impact its financial condition or results of operations but may change certain disclosures[27] - The Company adopted the CECL methodology for estimating expected credit losses starting January 1, 2023, impacting the ACL calculations[56] - The company plans to monitor SEC actions regarding recently issued accounting standards and will prepare for their adoption accordingly[27]

Credit Losses and Allowances - The Company's allowance for credit losses totaled $15.9 million as of December 31, 2023, consisting of $11.7 million for collectively evaluated loans and $4.2 million for individually evaluated loans[211]. - The allowance for credit losses is influenced by various economic indicators, including GDP and unemployment rates[212]. - The allowance for credit losses increased to $15.925 million in 2023 from $10.310 million in 2022, indicating a more cautious approach to credit risk[331]. - The provision for credit losses rose to $7,429 thousand in 2023, compared to $1,885 thousand in 2022, indicating a significant increase in expected credit losses[226]. - The allowance for credit losses may increase due to a decline in loan portfolio performance and higher incurred losses[365]. - The allowance for credit losses on unfunded lending commitments was $271,000 as of December 31, 2023[355]. - The total allowance for credit losses (ACL) increased to $23.3 million post-ASC 326 adoption from $10.3 million pre-adoption, reflecting a significant rise in reserves[260]. - The Company evaluates loans using a probability of default/loss given default (PD/LGD) method, which forecasts expected credit losses over the remaining life of the portfolio[263]. - The Company employs a risk rating system to assess the credit quality of its loan portfolio, with risk ratings reviewed and adjusted as necessary[361]. - The total charge-offs for the year ended December 31, 2023, amount to $(18,417,000)[357]. - The total recorded investment in individually evaluated loans was $17,133,000, with a principal outstanding of $22,535,000 and an allowance of $4,205,000[376]. Financial Performance - The company reported a net loss of $4,179 thousand in 2023, compared to a net income of $6,161 thousand in 2022, indicating a significant downturn[226]. - Net interest income decreased to $28,500 thousand in 2023 from $33,259 thousand in 2022, a decline of about 14.3%[226]. - Total assets increased to $1,093,425 thousand in 2023, up from $1,043,359 thousand in 2022, representing a growth of approximately 4.8%[223]. - Total deposits decreased to $840,311 thousand in 2023, down from $860,446 thousand in 2022, reflecting a reduction of approximately 2.5%[223]. - Interest expense surged to $30,457 thousand in 2023, up from $10,753 thousand in 2022, marking an increase of about 183%[226]. - Non-interest income increased to $6,005 thousand in 2023, up from $3,605 thousand in 2022, representing a growth of approximately 66.7%[226]. - The accumulated deficit increased to $47,026 thousand in 2023 from $31,337 thousand in 2022, reflecting a worsening financial position[223]. - The total shareholders' equity decreased to $44,383 thousand in 2023, down from $59,583 thousand in 2022, a decline of approximately 25.4%[223]. - Cash flows from operating activities resulted in a net cash used of $10,715,000 in 2023, a decrease from net cash provided of $7,036,000 in 2022[232]. - Cash paid for interest increased to $29,631,000 in 2023 from $10,472,000 in 2022, indicating higher borrowing costs[233]. Interest Rate Risk Management - Management's interest income simulations indicate that changes in interest rates can significantly affect net interest income, with quarterly simulations presented to the Asset and Liability Committee[193]. - The Management Asset and Liability Committee monitors interest rate risk to maximize net interest income while maintaining acceptable risk levels[191]. - The Company’s strategy includes originating variable rate loans and purchasing short-term investments to manage interest rate risk[190]. - The estimated net interest income under a +200 basis points interest rate scenario is projected to decrease by 5.10% to $107,524 thousand as of December 31, 2023[196]. - The estimated net portfolio value under a -200 basis points interest rate scenario is projected to decrease by 5.81% to $106,718 thousand as of December 31, 2023[196]. Goodwill and Intangible Assets - The Company recognized a goodwill impairment of $1.1 million and had no goodwill balance as of December 31, 2023[219]. - Patriot evaluates goodwill for impairment annually, with the last assessment conducted on October 31, and considers multiple valuation techniques[286]. - The company recorded an intangible asset impairment of $1,107 thousand in 2023, which was not present in 2022[226]. Regulatory and Accounting Changes - The Company adopted ASC 326 on January 1, 2023, presenting accrued interest receivable balances separately on the Consolidated Balance Sheet and fully reserving uncollectible accrued interest receivable[271]. - The Company recorded a net reduction of retained earnings of $11.5 million upon adopting ASC 326, which includes an increase in credit-related reserves of $13.0 million and an unfunded commitment reserve of $2.7 million[259]. - The Company adopted ASU 2022-02 effective January 1, 2023, which eliminated the accounting guidance for troubled debt restructurings (TDRs) while enhancing disclosure requirements[270]. - The adoption of ASU 2022-02 did not have a material impact on the Company's Consolidated Financial Statements[314]. - The Company does not expect the adoption of ASU 2023-06 to impact its financial condition but may change certain disclosures[317]. - The Company will adopt ASU 2023-09 for annual periods beginning January 1, 2025, without expecting a material impact on its Consolidated Financial Statements[318]. Loan Portfolio and Performance - The gross loans receivable total $848,859,000 as of December 31, 2023, compared to $848,316,000 in 2022[359]. - The commercial real estate loan portfolio increased to $472.093 million in 2023, up from $437.443 million in 2022[331]. - The company has not emphasized originating consumer loans, focusing instead on higher-yielding loans[338]. - The maximum loan-to-value for commercial real estate loans is limited to 75% of the market value of the underlying collateral[332]. - The company does not engage in subprime lending practices, focusing on borrowers with stronger credit histories[340]. - The loan portfolio aging analysis indicated that as of December 31, 2023, total performing loans were $830.732 million, with non-performing loans at $18.127 million[369]. - The company is monitoring the performance of its loan portfolio closely, with a focus on addressing identified weaknesses in substandard assets[366]. - The commercial real estate segment reported pass loans of $452.841 million, while special mention and substandard loans were $6.482 million and $12.770 million, respectively[367]. - The residential real estate segment had total loans of $106.783 million, all classified as pass loans[367]. - The consumer and other segment reported pass loans of $98.711 million, with substandard loans amounting to $977 thousand[367]. - The total amount of SBA loans held for investment was $30.0 million in 2023, down from $32.5 million in 2022[346]. - The total amount of SBA loans held for sale increased from $5.2 million in 2022 to $9.9 million in 2023, with $3.5 million in commercial and industrial loans and $6.4 million in commercial real estate loans[381].

Financial Performance - Total interest and dividend income for Q3 2023 was $15,070,000, an increase of 25.2% from $12,039,000 in Q3 2022[14]. - Net interest income after provision for credit losses decreased to $1,837,000 in Q3 2023 from $9,043,000 in Q3 2022, reflecting a decline of 79.7%[14]. - The net loss for Q3 2023 was $3,770,000, compared to a net income of $2,326,000 in Q3 2022[16]. - Basic and diluted loss per share for Q3 2023 was $0.95, compared to earnings per share of $0.59 in Q3 2022[14]. - Comprehensive loss for Q3 2023 was $6,468,000, compared to a comprehensive loss of $1,820,000 in Q3 2022[16]. - For the nine months ended September 30, 2023, Patriot National Bancorp reported a net loss of $5,084,000 compared to a net income of $4,391,000 in the same period of 2022[21]. - The company reported a significant increase in the allowance for loan losses from $10,310,000 as of December 31, 2022, to $25,668,000[85]. - The company reported a net loss of $3.8 million for Q3 2023, compared to a net income of $2.3 million in Q3 2022, resulting in a basic and diluted loss per share of $0.95[177]. Credit Losses and Provisions - Provision for credit losses increased significantly to $4,688,000 in Q3 2023 compared to $200,000 in Q3 2022[14]. - The provision for credit losses significantly increased to $8,233,000 in 2023 from $475,000 in 2022, indicating a substantial rise in expected credit losses[21]. - The allowance for credit losses rose to $25.7 million from $10.3 million, indicating a significant increase of 149.5%[57]. - The allowance for credit losses on unfunded loan commitments was $1.4 million at September 30, 2023[81]. - The Company’s ACL for credit losses on loans was $25.7 million as of September 30, 2023, compared to $9.9 million for the same period in 2022[82]. - The total allowance for credit losses was $25,668,000, with $13,360,000 individually evaluated for impairment and $14,432,000 collectively evaluated[85]. - The elevated provision for credit losses was $8.2 million for the nine months ended September 30, 2023, significantly higher than the $475,000 provision recorded for the first half of 2022[179]. Assets and Liabilities - Total assets increased by $93.4 million to $1.1 billion as of September 30, 2023, primarily due to increases in cash of $40.4 million and loans receivable of $41.6 million[180]. - Cash and cash equivalents rose from $38.5 million at December 31, 2022, to $78.9 million at September 30, 2023, reflecting a strategy to enhance balance sheet liquidity amid banking sector uncertainties[181]. - The company’s total financial liabilities are estimated at $1,084,125,000 as of September 30, 2023, compared to $976,427,000 at the end of 2022, reflecting an increase of about 11%[161]. - The total commitments to extend credit as of September 30, 2023, were $134,512,000, compared to $154,307,000 as of December 31, 2022[135]. Deposits and Borrowings - As of September 30, 2023, total deposits amounted to $837.0 million, a decrease from $860.4 million as of December 31, 2022, reflecting a decline of approximately 2.5%[115]. - Non-interest bearing deposits decreased to $136.1 million as of September 30, 2023, from $269.6 million at December 31, 2022, a decline of approximately 49.5%[115]. - Total borrowings rose significantly from $115.2 million at December 31, 2022, to $245.1 million as of September 30, 2023[200]. - FHLB-B advances increased from $85.0 million to $145.0 million, with a weighted average interest rate of 4.89%[202]. Loan Portfolio - The total loans receivable, net, amounted to $864.2 million, an increase from $838.0 million as of December 31, 2022, representing a growth of 3.0%[57]. - The commercial real estate loan portfolio increased to $499.1 million from $437.4 million, reflecting a growth of 14.1%[57]. - The outstanding unsecured consumer loans totaled $58.6 million as of September 30, 2023, down from $78.9 million at the end of 2022, a decrease of 25.5%[65]. - The commercial and industrial loan portfolio remains stable at $160.5 million as of September 30, 2023, compared to $138.8 million at the end of 2022, an increase of 15.6%[62]. - The total past due loans across all segments amounted to $30,830,000, indicating a need for monitoring and potential risk management[92]. Securities and Investments - The company reported an unrealized holding loss on securities of $3,636,000 for Q3 2023, compared to a loss of $5,587,000 in Q3 2022[16]. - As of September 30, 2023, total available-for-sale securities amounted to $85.686 million, with gross unrealized losses of $25.252 million, reflecting a decline of 22.8% from the amortized cost[47][48]. - The fair value of available-for-sale securities classified as Level 2 is $75,815,000 as of September 30, 2023, compared to $75,093,000 at December 31, 2022, showing a slight increase of 1%[161]. - The fair value of Level 3 available-for-sale securities at the end of Q3 2023 was $9,871,000, down from $10,342,000 at the beginning of the year[167]. Operational Changes - The company initiated a reduction in force on November 1, 2023, resulting in a restructuring charge of approximately $500,000 and an annualized reduction in salary and benefit costs of about $3.5 million[170]. - The company is negotiating with a third-party consumer loan originator/servicer, which is expected to lead to a material recovery of a portion of the allowance for credit losses and commitment reserve associated with its consumer loan portfolio[171]. Regulatory and Compliance - The company continues to monitor SEC actions regarding disclosure requirements and plans accordingly for adoption[46]. - The company has not paid any dividends since 2020 and has no current plans to do so[126].