Patriot Reports Second Quarter 2022 Net Income Of $1.3 Milli...| MENAFN.COM

Sunday, 14 August 2022 04:39 GMT

Patriot Reports Second Quarter 2022 Net Income Of $1.3 Million Continued Growth In Loans And Deposits


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STAMFORD, Conn., Aug. 05, 2022 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. (“Patriot,”“Bancorp” or the“Company”) (NASDAQ: PNBK), the parent company of Patriot Bank, N.A. (the“Bank”), today announced net income of $1.3 million, or $0.32 basic and diluted earnings per share for the quarter ended June 30, 2022, compared to $800,000, or $0.20 per basic and diluted earnings per share for the first quarter of 2022 and net income of $1.0 million, or $0.26 basic and diluted earnings per share reported in the second quarter of 2021. The 2021 second quarter included the benefit of a non-recurring employee retention tax credit (“ERC”) of $1.1 million.

For the six months ended June 30, 2022, net income was $2.1 million, or $0.52 basic and diluted earnings per share, compared to a net income of $1.9 million, or $0.48 basic and $0.47 diluted earnings per share for the six months ended June 30, 2021. The first half of 2021 results included the recognition of an ERC of $2.0 million, while no ERC was recognized in 2022.

Along with reporting a substantial improvement in net interest income and strong earnings, the Bank reported loan growth of 16.2% and deposit growth of 13.1% compared to December 31, 2021. Net interest margin improved to 3.17% for the first half of 2022, up from 2.90% for the first half of 2021. The Bank's prepaid debit card program continues to be an increasing, low-cost funding source and has tripled in size to $166.7 million as of June 30, 2022, from $50.0 million in July 2020. The portfolio growth provides a substantial improvement to the Bank's net interest margin and overall funding costs.

Patriot President & CEO Robert Russell stated: “The Bank continued its path of strong financial performance and quality asset generation during the second quarter of 2022. Our net interest margin remained solid at 3.17%. The Bank remains focused on its balance sheet and improvement in nonperforming assets both of which had positive contributions during the quarter.

As disclosed on July 20, 2022, Patriot and American Challenger Development Corporation mutually agreed to terminate the previously announced Merger Agreement due to closing conditions that could not be attained. The parties remain in active discussions regarding the potential for a modified transaction.“Aside from our focus on meaningful strategic activities, Patriot's organic platform and financial performance continues to grow and improve,” Russell added.

Financial Results:

As of June 30, 2022, total assets increased $100.7 million to $1.0 billion, as compared to $948.5 million on December 31, 2021, primarily due to the increase in net loans which increased from $729.6 million on December 31, 2021, to $849.2 million on June 30, 2022. Total deposits increased from $748.6 million on December 31, 2021, to $846.8 million on June 30, 2022.

Net interest income for the three months ended June 30, 2022, was $7.7 million, an increase of $1.8 million or 30.0% from the second quarter of 2021. Net interest income for the six months ended June 30, 2022 was $14.4 million, an increase of $2.3 million or 19.7% from the first half of 2021. These increases were primarily attributable to the growth in the loan portfolio over the past year.

The Bank's net interest margin showed continued improvement, with an increase to 3.17% for the six months ended June 30, 2022, compared with 2.90% for the six months ended June 30, 2021.

A provision for loan losses of $275,000 was recorded for the three and six months ended June 30, 2022. There was no provision for loans losses recorded in the second quarter and first half of 2021. As of June 30, 2022, the allowance for loan losses was 1.16% of total loans, compared with 1.34% on December 31, 2021.

Non-interest income for the quarter ended June 30, 2022 and 2021 was $798,000 and $753,000, respectively. Non-interest income for the six months ended June 30, 2022 and 2021, was $1.6 million and $1.2 million, respectively. The increase in the first half of 2022 was primarily attributable to gains from sales of SBA loans totaling $509,000 along with higher non-interest income from the prepaid card program.

Non-interest expense for the quarter ended June 30, 2022 and 2021, was $6.5 million and $5.3 million, respectively. Non-interest expense for the six months ended June 30, 2022 and 2021, was $12.9 million and $10.7 million, respectively. The increase in the first half of 2022 was primarily due to an increase in salary and benefit expenses as the Company recognized an ERC of $2.0 million in the first half of 2021. The organization was no longer eligible for the ERC under the CARES Act program in 2022.

For the six months ended June 30, 2022, a provision for income taxes of $787,000 was recorded, compared to a provision for income taxes of $702,000 for the six months ended June 30, 2021.

As of June 30, 2022, shareholders' equity was $59.8 million, compared with $67.3 million on December 31, 2021. Patriot's book value per share was $15.11 on June 30, 2022, compared with $17.02 on December 31, 2021. The change was attributable to a decline in the market value of the Bank's investment portfolio during the quarter associated with rising market interest rates.

* * * * *

About the Company:

Founded in 1994, and now celebrating its 28th year, Patriot National Bancorp, Inc. (“Patriot” or“Bancorp”) is the parent holding company of Patriot Bank N.A. (“Bank”), a nationally chartered bank headquartered in Stamford, CT. The Bank is headquartered in Stamford and operates 9 branch locations: in Scarsdale, NY; and Darien, Fairfield, Greenwich, Milford, Norwalk, Orange, Stamford, Westport, CT with Express Banking locations at Bridgeport/ Housatonic Community College, downtown New Haven and Trumbull at Westfield Mall. The Bank also maintains SBA lending offices in Stamford, Connecticut, Florida, Georgia, Mississippi, along with a Rhode Island operations center.

Patriot's mission is to serve its local community and nationwide customer base by providing a growing array of banking solutions to meet the needs of individuals and small businesses owners. Patriot places great value in the integrity of its people and how it conducts business. An emphasis on building strong client relationships and community involvement are cornerstones of Patriot's philosophy as it seeks to maximize shareholder value.

“Safe Harbor” Statement Under Private Securities Litigation Reform Act of 1995:
Certain statements contained in Bancorp's public statements, including this one, may be forward looking. These forward-looking statements are based on Patriot's current expectations and assumptions regarding Patriot's businesses, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other factors that are difficult to predict. Many possible events or factors could affect Patriot's future financial results and performance and could cause the actual results, performance, or achievements of Patriot to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others: (1) changes in prevailing interest rates which would affect the interest earned on the Company's interest earning assets and the interest paid on its interest bearing liabilities; (2) the timing of re-pricing of the Company's interest earning assets and interest bearing liabilities; (3) the effect of changes in governmental monetary policy; (4) the effect of changes in regulations applicable to the Company and the Bank and the conduct of its business; (5) changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks; (6) the ability of competitors that are larger than the Company to provide products and services which it is impracticable for the Company to provide; (7) the state of the economy and real estate values in the Company's market areas, and the consequent effect on the quality of the Company's loans; (8) demand for loans and deposits in our market area; (9) recent governmental initiatives that are expected to have a profound effect on the financial services industry and could dramatically change the competitive environment of the Company; (10) other legislative or regulatory changes, including those related to residential mortgages, changes in accounting standards, and Federal Deposit Insurance Corporation (“FDIC”) premiums that may adversely affect the Company; (11) the application of generally accepted accounting principles, consistently applied; (12) the fact that one period of reported results may not be indicative of future periods; (13) the state of the economy in the greater New York metropolitan area and its particular effect on the Company's customers, vendors and communities; (14) political, social, legal and economic instability, civil unrest, war, catastrophic events, acts of terrorism; (15) widespread outbreaks of infectious diseases, including the ongoing novel coronavirus (COVID-19) outbreak; (16) changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; (17) our ability to access cost-effective funding; (18) our ability to implement and change our business strategies; (19) changes in the quality or composition of our loan or investment portfolios; (20) technological changes that may be more difficult or expensive than expected; (21) our ability to manage market risk, credit risk and operational risk in the current economic environment; (22) our ability to enter new markets successfully and capitalize on growth opportunities; (23) changes in consumer spending, borrowing and savings habits; (24) our ability to retain key employees; (25) our compensation expense associated with equity allocated or awarded to our employees; and (26) other such factors, including risk factors, as may be described in the Company's other filings with the Securities and Exchange Commission.


PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands) June 30, 2022 December 31, 2021 June 30, 2021
Assets
Cash and due from banks:
Noninterest bearing deposits and cash $ 4,507 $ 3,264 $ 2,397
Interest bearing deposits 33,009 43,781 113,794
Total cash and cash equivalents 37,516 47,045 116,191
Investment securities:
Available-for-sale securities, at fair value 76,971 94,341 108,612
Other investments, at cost 4,450 4,450 4,450
Total investment securities 81,421 98,791 113,062
Federal Reserve Bank stock, at cost 2,762 2,843 2,744
Federal Home Loan Bank stock, at cost 4,474 4,184 4,185
Gross loans receivable 859,107 739,488 670,896
Allowance for loan losses (9,929 ) (9,905 ) (10,362 )
Net loans receivable 849,178 729,583 660,534
SBA loans held for sale 7,556 3,129 2,636
Accrued interest and dividends receivable 5,727 5,822 6,207
Premises and equipment, net 31,128 31,500 32,824
Other real estate owned - - 1,216
Deferred tax asset 14,910 12,146 10,560
Goodwill 1,107 1,107 1,107
Core deposit intangible, net 273 296 319
Other assets 13,128 12,035 11,469
Total assets $ 1,049,180 $ 948,481 $ 963,054
Liabilities
Deposits:
Noninterest bearing deposits $ 271,165 $ 226,713 $ 218,374
Interest bearing deposits 575,618 521,849 542,824
Total deposits 846,783 748,562 761,198
Federal Home Loan Bank and correspondent bank borrowings 100,000 90,000 90,000
Senior notes, net 12,000 12,000 11,965
Subordinated debt, net 9,825 9,811 9,796
Junior subordinated debt owed to unconsolidated trust, net 8,123 8,119 8,114
Note payable 689 791 893
Advances from borrowers for taxes and insurance 2,967 1,101 3,607
Accrued expenses and other liabilities 8,991 10,753 11,619
Total liabilities 989,378 881,137 897,192
Commitments and Contingencies - - -
Shareholders' equity
Preferred stock - - -
Common stock 106,520 106,479 106,409
Accumulated deficit (35,433 ) (37,498 ) (40,716 )
Accumulated other comprehensive loss (11,285 ) (1,637 ) 169
Total shareholders' equity 59,802 67,344 65,862
Total liabilities and shareholders' equity $ 1,049,180 $ 948,481 $ 963,054


PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended
(In thousands, except per share amounts) June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Interest and Dividend Income
Interest and fees on loans $ 9,044 $ 7,664 $ 7,267 $ 16,708 $ 15,010
Interest on investment securities 510 570 420 1,080 730
Dividends on investment securities 65 65 57 130 91
Other interest income 68 21 23 89 47
Total interest and dividend income 9,687 8,320 7,767 18,007 15,878
Interest Expense
Interest on deposits 757 409 623 1,166 1,408
Interest on Federal Home Loan Bank borrowings 747 737 741 1,484 1,474
Interest on senior debt 210 210 228 420 457
Interest on subordinated debt 251 234 233 485 467
Interest on note payable and other 2 4 4 6 8
Total interest expense 1,967 1,594 1,829 3,561 3,814
Net interest income 7,720 6,726 5,938 14,446 12,064
Provision for loan losses 275 - - 275 -
Net interest income after provision for loan losses 7,445 6,726 5,938 14,171 12,064
Non-interest Income
Loan application, inspection and processing fees 89 87 61 176 124
Deposit fees and service charges 60 64 64 124 129
Gains on sale of loans 301 208 258 509 352
Rental income 132 192 140 324 270
Loss on sale of investment securities - - 93 - 93
Other income 216 263 137 479 227
Total non-interest income 798 814 753 1,612 1,195
Non-interest Expense
Salaries and benefits 3,763 3,346 2,447 7,109 4,663
Occupancy and equipment expenses 881 836 778 1,717 1,698
Data processing expenses 283 330 362 613 712
Professional and other outside services 559 789 714 1,348 1,566
Project expenses, net 29 52 1 81 11
Advertising and promotional expenses 73 68 77 141 139
Loan administration and processing expenses 42 105 14 147 38
Regulatory assessments 179 174 208 353 436
Insurance expenses 76 77 75 153 135
Communications, stationary and supplies 139 135 144 274 289
Other operating expenses 478 517 466 995 994
Total non-interest expense 6,502 6,429 5,286 12,931 10,681
Income before income taxes 1,741 1,111 1,405 2,852 2,578
Provision for income taxes 476 311 383 787 702
Net income $ 1,265 $ 800 $ 1,022 $ 2,065 $ 1,876
Basic earnings per share $ 0.32 $ 0.20 $ 0.26 $ 0.52 $ 0.48
Diluted earnings per share $ 0.32 $ 0.20 $ 0.26 $ 0.52 $ 0.47


FINANCIAL RATIOS AND OTHER DATA
Three Months Ended Six Months Ended
(Dollars in thousands) June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Quarterly Performance Data:
Net income $ 1,265 $ 800 $ 1,022 $ 2,065 $ 1,876
Return on Average Assets 0.50% 0.34% 0.46% 0.42% 0.42%
Return on Average Equity 8.20% 4.88% 6.34% 6.49% 5.87%
Net Interest Margin 3.27% 3.06% 2.82% 3.17% 2.90%
Efficiency Ratio 76.33% 85.27% 78.99% 80.53% 80.56%
Efficiency Ratio excluding project costs 76.00% 84.58% 78.98% 80.03% 80.47%
% increase (decrease) in loans 11.09% 4.58% -0.85 % 16.18% -8.12%
% increase in deposits 8.58% 4.18% 9.86% 13.12% 11.02%
% increase in deposits excluding brokered deposits 9.02% 1.83% 10.96% 11.01% 16.14%
Asset Quality:
Nonaccrual loans $ 23,324 $ 23,466 $ 24,524 $ 23,324 $ 24,524
Other real estate owned $ - $ - $ 1,216 $ - $ 1,216
Total nonperforming assets $ 23,324 $ 23,466 $ 25,740 $ 23,324 $ 25,740
Nonaccrual loans / loans 2.71% 3.03% 3.66% 2.71% 3.66%
Nonperforming assets / assets 2.22% 2.41% 2.67% 2.22% 2.67%
Allowance for loan losses $ 9,929 $ 9,737 $ 10,362 $ 9,929 $ 10,362
Allowance for loan losses / loans 1.16% 1.26% 1.54% 1.16% 1.54%
Allowance / nonaccrual loans 42.57% 41.49% 42.25% 42.57% 42.25%
Loan charge-offs $ 100 $ 185 $ 80 $ 285 $ 352
Loan recoveries $ (17 ) $ (17 ) $ (16 ) $ (34 ) $ (130 )
Net loan charge-offs $ 83 $ 168 $ 64 $ 251 $ 222
Capital Data and Capital Ratios
Book value per share (1) $ 15.11 $ 15.84 $ 16.69 $ 15.11 $ 16.69
Shares outstanding 3,957,269 3,956,492 3,947,276 3,957,269 3,947,276
Bank Leverage Ratio 9.44% 9.94% 10.10% 9.44% 10.10%
(1) Book value per share represents shareholders' equity divided by outstanding shares.
Deposits:
(In thousands)
June 30, 2022 March 31, 2022 June 30, 2021
Non-interest bearing:
Non-interest bearing $ 137,320 $ 120,835 $ 135,477
Prepaid DDA 133,845 116,990 82,897
Total non-interest bearing 271,165 237,825 218,374
Interest bearing:
NOW 35,973 42,272 36,085
Savings 99,686 105,871 99,264
Money market 151,212 117,049 123,327
Money market - prepaid deposits 32,891 29,770 54,922
Certificates of deposit, less than $250,000 169,690 158,625 152,700
Certificates of deposit, $250,000 or greater 51,491 53,513 63,690
Brokered deposits 34,675 34,924 12,836
Total Interest bearing 575,618 542,024 542,824
Total Deposits $ 846,783 $ 779,849 $ 761,198
Total Prepaid deposits $ 166,736 $ 146,760 $ 137,819
Total deposits excluding brokered deposits $ 812,108 $ 744,925 $ 748,362


Contacts:
Patriot Bank, N.A. Joseph Perillo Robert Russell
900 Bedford Street Chief Financial Officer President & CEO
Stamford, CT 06901 203-252-5954 203-252-5939



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