Press Release

Patriot Reports Second Quarter 2022 Net Income of $1.3 million; continued growth in loans and deposits

Company Release - 8/5/2022 8:30 AM ET

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
www.BankPatriot.com    

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Source: Patriot National Bancorp Inc.