Patriot National Bancorp(PNBK) - 2024 Q3 - Quarterly Report

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]