Patriot National Bancorp in Stamford, Conn., will restate financial results for the first half of 2023 after miscalculating an adjustment to the Current Expected Credit Loss standard.
The $1.2 billion-asset company disclosed in a regulatory filing that investors cannot rely on its financial statements for the first and second quarters due to an error tied to CECL calculations.
Patriot National estimated that, after it corrects the issue, the increase in its net loss for the first half of this year is expected to total about $720,000.
The error, tied to a portfolio of unsecured consumer loans Patriot National bought last year, “was due to the use of unsupported and incorrect data points used in conjunction with data provided by the third-party originator/servicer,” the filing said.
The original weighted average life of the portfolio was understated and the loss rate applied to the loans was inaccurate. Finally, Patriot National did not adequately adjust for the status of loan delinquencies.
Patriot National said it is negotiating with the third-party originator/servicer with the intention of recovering all or a portion of the losses incurred.