Patriot National Bancorp(PNBK) - 2023 Q3 - Quarterly Report

Financial Performance - Total interest and dividend income for Q3 2023 was $15,070,000, an increase of 25.2$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$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$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$136.1 million as of September 30, 2023, from $269.6 million at December 31, 2022, a decline of approximately 49.5$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$864.2 million, an increase from $838.0 million as of December 31, 2022, representing a growth of 3.0$499.1 million from $437.4 million, reflecting a growth of 14.1$58.6 million as of September 30, 2023, down from $78.9 million at the end of 2022, a decrease of 25.5$160.5 million as of September 30, 2023, compared to $138.8 million at the end of 2022, an increase of 15.6$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].