Executive Summary

Q4 2024 (prelim., unaudited): net loss ≈ $9.5M and diluted EPS ≈ $(2.40), driven primarily by an ≈$7.7M provision for credit losses tied to two large commercial real estate loans; book value per share fell to ≈$1.07 at 12/31/24 vs $11.16 at 12/31/23 .
Credit costs spiked sharply vs recent quarters (Q2–Q3), reflecting emerging stress in select CRE exposures; this was the key driver of the quarter’s miss vs the company’s recent trajectory (no Street consensus available for comparison) .
Balance sheet and capital actions: management disclosed non‑binding term sheets for ≈$60M capital raise (Feb 21) and subsequently announced completion of “over $50M” private placement (Mar 20), positioning to restore well‑capitalized status and fund stability/growth; CEO transition announced alongside recapitalization .
Liquidity/financing watch items: grace period extension for 8.5% senior notes interest due Jan 15, 2025, to Apr 1, 2025, signals near‑term cash prioritization ahead of recapitalization (amendment effective Feb 14, 2025) .
Operating backdrop into Q4: Digital Payments division continued to scale through Q3 (non‑interest income contribution up YoY), but was overwhelmed by elevated credit provisioning and prior DTA valuation allowance (Q3) that compressed capital and equity metrics .

What Went Well and What Went Wrong

What Went Well

Digital Payments momentum (through Q3): non‑interest “Digital Payments income” rose to $1.333M in Q3 2024 (vs $0.625M YoY) after $1.212M in Q2 (vs $0.405M YoY), evidencing traction in fees and transactions despite balance sheet compression .
Strategic capital solution: company secured non‑binding term sheets for ≈$60M raise in Feb and later announced “over $50M” private placement in Mar to bolster bank capital and liquidity for stability and growth .
Management tone on strategy post‑raise: “The new capital will enable Patriot to meet the bespoke needs of its clients, safely and soundly. The future is bright for Patriot,” per President Steven Sugarman (Mar 20) .

What Went Wrong

Credit cost shock: Q4 provision ≈$7.7M, primarily two CRE loans, drove a Q4 net loss ≈$9.5M and EPS ≈$(2.40), reversing any earnings momentum and highlighting CRE risk concentration .
Severe equity dilution in BVPS: book value per share fell to ≈$1.07 at 12/31/24 from $11.16 a year earlier, reflecting cumulative losses and Q3’s full DTA valuation allowance .
Regulatory capital pressures (pre‑raise): as of Q3 2024 the bank was below OCC‑set IMCR thresholds (e.g., CET1 8.19% vs 10% requirement; Tier 1 leverage 6.53% vs 9%) and planned further balance‑sheet downsizing, underscoring capital urgency ahead of the raise .

Financial Results

Note: Q4 2024 results are preliminary and approximate as furnished in the 8‑K; full revenue detail was not disclosed.

Metric (USD Millions, except per‑share)	Q2 2024	Q3 2024	Q4 2024 (Prelim.)
Interest & Dividend Income	$13.217	$12.814	N/A
Non‑Interest Income	$2.063	$2.115	N/A
Provision for Credit Losses	$3.092	$1.026	≈$7.7
Net Income (Loss)	$(3.081)	$(26.954)	≈$(9.5)
Diluted EPS ($)	$(0.77)	$(6.78)	≈$(2.40)

Operating revenue proxies and margin

Metric	Q2 2024	Q3 2024
Net Interest Margin (%)	2.14%	N/A

Digital Payments contribution (within non‑interest income)

Metric	Q2 2024	Q3 2024
Digital Payments Income ($M)	$1.212	$1.333

Credit and capital KPIs

KPI	Dec 31, 2023	Jun 30, 2024	Sep 30, 2024	Dec 31, 2024
Non‑accrual Loans ($M)	$18.127	$37.371	$36.536	N/A
Allowance for Credit Losses ($M)	$15.925	$14.989	$14.984	N/A
Book Value/Share ($)	$11.16	N/A	N/A	≈$1.07
CET1 Ratio – Bank	10.50%	10.20%	8.19%	N/A
Tier 1 Leverage – Bank	8.70%	8.58%	6.53%	N/A
Total Risk‑Based Capital – Bank	11.22%	11.21%	9.29%	N/A
Uninsured Deposits / Total Deposits (%)	39.78%	32.80%	32.10%	N/A

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance	N/A	None disclosed	None disclosed	N/A

No formal quantitative guidance was provided in the Q4 2024 8‑K; the filing focused on preliminary results and capital plans (term sheets) .

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was found.

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4 2024)	Trend
Credit quality/CRE	Non‑accruals rose from $18.1M (12/31/23) to $37.4M (6/30/24) and $36.5M (9/30/24); ACL ~ $15.0M; charge‑offs concentrated in unsecured consumer, select CRE; elevated provisions (Q2: $3.1M; Q3: $1.0M) .	Provision ≈$7.7M primarily for two large CRE loans; Q4 net loss ≈$9.5M .	Deteriorating in Q4 due to specific CRE exposures.
Regulatory capital/IMCR	Bank below OCC IMCR on leverage and total RBC at Q2 (Tier 1 leverage 8.58% vs 9%; total RBC 11.21% vs 11.5%) and further below at Q3 (CET1 8.19%; leverage 6.53%; total RBC 9.29%) .	Company negotiated ≈$60M equity raise term sheets (Feb 21), completed “over $50M” private placement (Mar 20) to restore well‑capitalized status .	Improving trajectory post‑quarter via external capital.
Liquidity/borrowings	BTFP usage reduced by Q3; deposits stabilized with lower uninsured ratio; liquidity ratios above policy minimum by Q2 .	Senior notes interest grace period extended to Apr 1, 2025, signaling tight near‑term cash prioritization pre‑raise .	Mixed: recap improves outlook; short‑term funding vigilance.
Fee initiatives (Digital Payments)	Digital Payments income grew to $1.212M (Q2) and $1.333M (Q3) YoY .	Not quantified in Q4 8‑K; remains a strategic pillar per management .	Positive momentum through Q3; Q4 not disclosed.
Taxes/DTAs	Full valuation allowance recorded in Q3 (~$25.1M), driving large GAAP loss and lower equity/Tier 1 .	Not specifically updated in Q4 8‑K; BVPS indicated at ≈$1.07 .	Capital raise expected to offset equity compression (post‑quarter) .

Management Commentary

“The new capital will enable Patriot to meet the bespoke needs of its clients, safely and soundly. The future is bright for Patriot.” — Steven Sugarman, President (Mar 20, 2025) .
“The completion of the capital raise marks a positive inflection point for Patriot and will enable the bank to pursue the compelling market opportunity that exists.” — Chairman Michael Carrazza (Mar 20, 2025) .
“I am proud to have helped lead the successful recapitalization of Patriot Bank…” — CEO David Lowery (Mar 20, 2025) .

Note: Q4 8‑K focused on preliminary results, credit loss drivers (two CRE loans), and capital/financing disclosures rather than operating guidance .

Q&A Highlights

No Q4 2024 earnings call transcript was available; no Q&A highlights to report.

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS/revenue was not available for this company at the time of analysis; the company furnished preliminary results without accompanying consensus comparisons .
Implication: In the absence of consensus, estimate revisions are likely to track the disclosed Q4 credit costs and capital actions; we expect analysts (if any) to adjust credit cost run‑rates and capital ratios post‑recapitalization (no S&P Global figures available).

Key Takeaways for Investors

Q4 credit cost spike centered on two CRE loans (provision ≈$7.7M) was the decisive earnings driver; monitoring CRE criticized/classified migration remains paramount .
Book value erosion is severe (≈$1.07 at 12/31/24 vs $11.16 YoY), reflecting cumulative losses and prior DTA valuation allowance; recapitalization is intended to reset regulatory capital and support growth, albeit with dilution .
Regulatory capital shortfalls as of Q3 (below OCC IMCR) underscore why external capital was necessary; announced “over $50M” raise post‑quarter is a key de‑risking step pending full close and deployment .
Near‑term liquidity/financing watch: senior notes interest grace period extension to Apr 1, 2025 highlights prioritization and sequencing of cash commitments pre‑raise; follow progress on interest payments and note covenants .
Digital Payments growth is a bright spot (through Q3) and a potential medium‑term earnings lever as credit costs normalize and capital constraints ease .
Focus catalysts: (1) closing and terms of capital raise and resulting post‑money ratios; (2) resolution/workouts on the two CRE credits driving Q4 provision; (3) updated 10‑K/FY disclosures for full Q4 revenue/margin detail; (4) OCC capital status updates .

Citations

Q4 2024 8‑K preliminary results, provision drivers, BVPS:
Senior notes grace period extension:
Capital raise term sheets (Feb 21): ; Completed “over $50M” private placement and leadership changes (Mar 20):
Q3 2024 10‑Q income statement, non‑interest income mix, capital ratios, DTA allowance:
Q2 2024 10‑Q income statement, NIM, non‑interest income, liquidity and deposits:

PATRIOT NATIONAL BANCORP INC (PNBK)·Q4 2024 Earnings Summary