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.
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.
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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|
|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|
|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|
|Core deposit intangible, net||273||296||319|
|Noninterest bearing deposits||$||271,165||$||226,713||$||218,374|
|Interest bearing deposits||575,618||521,849||542,824|
|Federal Home Loan Bank and correspondent bank borrowings||100,000||90,000||90,000|
|Senior notes, net||12,000||12,000||11,965|
|Subordinated debt, net||9,825||9,811||9,796|
|Junior subordinated debt owed to unconsolidated trust, net||8,123||8,119||8,114|
|Advances from borrowers for taxes and insurance||2,967||1,101||3,607|
|Accrued expenses and other liabilities||8,991||10,753||11,619|
|Commitments and Contingencies||-||-||-|
|Accumulated other comprehensive loss||(11,285||)||(1,637||)||169|
|Total shareholders' equity||59,802||67,344||65,862|
|Total liabilities and shareholders' equity||$||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||$||15,010|
|Interest on investment securities||510||570||420||1,080||730|
|Dividends on investment securities||65||65||57||130||91|
|Other interest income||68||21||23||89||47|
|Total interest and dividend income||9,687||8,320||7,767||18,007||15,878|
|Interest on deposits||757||409||623||1,166||1,408|
|Interest on Federal Home Loan Bank borrowings||747||737||741||1,484||1,474|
|Interest on senior debt||210||210||228||420||457|
|Interest on subordinated debt||251||234||233||485||467|
|Interest on note payable and other||2||4||4||6||8|
|Total interest expense||1,967||1,594||1,829||3,561||3,814|
|Net interest income||7,720||6,726||5,938||14,446||12,064|
|Provision for loan losses||275||-||-||275||-|
|Net interest income after provision for loan losses||7,445||6,726||5,938||14,171||12,064|
|Loan application, inspection and processing fees||89||87||61||176||124|
|Deposit fees and service charges||60||64||64||124||129|
|Gains on sale of loans||301||208||258||509||352|
|Loss on sale of investment securities||-||-||93||-||93|
|Total non-interest income||798||814||753||1,612||1,195|
|Salaries and benefits||3,763||3,346||2,447||7,109||4,663|
|Occupancy and equipment expenses||881||836||778||1,717||1,698|
|Data processing expenses||283||330||362||613||712|
|Professional and other outside services||559||789||714||1,348||1,566|
|Project expenses, net||29||52||1||81||11|
|Advertising and promotional expenses||73||68||77||141||139|
|Loan administration and processing expenses||42||105||14||147||38|
|Communications, stationary and supplies||139||135||144||274||289|
|Other operating expenses||478||517||466||995||994|
|Total non-interest expense||6,502||6,429||5,286||12,931||10,681|
|Income before income taxes||1,741||1,111||1,405||2,852||2,578|
|Provision for income taxes||476||311||383||787||702|
|Basic earnings per share||$||0.32||$||0.20||$||0.26||$||0.52||$||0.48|
|Diluted earnings per share||$||0.32||$||0.20||$||0.26||$||0.52||$||0.47|
|FINANCIAL RATIOS AND OTHER DATA|
|Three Months Ended||Six Months Ended|
|(Dollars in thousands)||June 30, 2022||March 31, 2022||June 30, 2021||June 30, 2022||June 30, 2021|
|Quarterly Performance Data:|
|Return on Average Assets||0.50%||0.34%||0.46%||0.42%||0.42%|
|Return on Average Equity||8.20%||4.88%||6.34%||6.49%||5.87%|
|Net Interest Margin||3.27%||3.06%||2.82%||3.17%||2.90%|
|Efficiency Ratio excluding project costs||76.00%||84.58%||78.98%||80.03%||80.47%|
|% increase (decrease) in loans||11.09%||4.58%||-0.85||%||16.18%||-8.12%|
|% increase in deposits||8.58%||4.18%||9.86%||13.12%||11.02%|
|% increase in deposits excluding brokered deposits||9.02%||1.83%||10.96%||11.01%||16.14%|
|Other real estate owned||$||-||$||-||$||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%|
|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|
|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.|
|June 30, 2022||March 31, 2022||June 30, 2021|
|Total non-interest bearing||271,165||237,825||218,374|
|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, $250,000 or greater||51,491||53,513||63,690|
|Total Interest bearing||575,618||542,024||542,824|
|Total Prepaid deposits||$||166,736||$||146,760||$||137,819|
|Total deposits excluding brokered deposits||$||812,108||$||744,925||$||748,362|
|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|