Patriot National Bancorp, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company experienced a net loss of $26.95 million for the third quarter, a stark increase from a loss of $3.77 million in the same period of 2023. For the nine months ended September 30, 2024, the net loss totaled $30.33 million, compared to $5.08 million in the prior year. This deterioration in profitability was primarily attributed to a full valuation allowance against deferred tax assets, resulting in an income tax expense increase of approximately $25.1 million.
Total interest and dividend income for the third quarter decreased to $12.81 million from $15.07 million year-over-year, while net interest income fell to $4.99 million from $6.53 million. The decline in net interest income was driven by lower loan balances and higher deposit costs, with the net interest margin dropping to 2.18% from 2.48% in the previous year. For the nine-month period, net interest income also decreased significantly to $15.43 million from $22.25 million.
The company's total assets decreased to $974.08 million as of September 30, 2024, down from $1.09 billion at the end of 2023, largely due to a reduction in loans receivable, which fell to $740.69 million from $832.93 million. Total deposits also saw a slight decline, amounting to $824.89 million compared to $840.31 million at year-end 2023. Notably, borrowings from the Federal Home Loan Bank and other sources decreased significantly to $93.8 million from $171 million.
In terms of strategic developments, Patriot National Bancorp has focused on reducing its loan portfolio to strengthen capital ratios, leading to a decrease in total loans. The company has also reentered the residential mortgage business through its Residential Mortgage Division, which began originating loans in 2024. The Digital Payments Division has shown growth, with deposits increasing to approximately $235.1 million from $213.4 million.
The allowance for credit losses was reported at $15 million, down from $15.9 million at the end of 2023, reflecting a decrease in the overall risk profile of the loan portfolio. However, non-accrual loans increased to $36.5 million, up from $18.1 million, indicating rising credit risk.
Overall, Patriot National Bancorp's financial performance in the third quarter of 2024 reflects significant challenges, with substantial losses driven by tax-related expenses and a strategic shift towards reducing loan originations to improve capital ratios.
About PATRIOT NATIONAL BANCORP INC
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