Patriot Reports Second Quarter 2022 Net Income of $1.3 million; continued growth in loans and deposits
08/05/2022 - 08:30 AM
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 b asic 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 b asic 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 b asic and diluted earnings per share, compared to a net income of $1.9 million , or $0.48 b asic 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.
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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:
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
