STAMFORD, Conn., Oct. 29, 2021 (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 $0.34 basic and diluted earnings per share for the quarter ended September 30, 2021, compared to a net loss of $87,000, or $0.02 basic and diluted loss per share reported in the third quarter of 2020. On a year-to-date basis, net income was $3.2 million, or $0.81 per fully diluted share, compared to a net loss of $2.4 million, or $0.62 fully diluted loss per share during the same year-to-date period in 2020.
The Bank continued to show improved net interest margins, core deposit growth, and lower operating expenses. The prepaid debit card program continues to be an increasing, low-cost funding source for the Bank and has grown substantially to $142.4 million as of September 30, 2021, from the $50.0 million acquired in July 2020. The portfolio growth provides a substantial improvement to the Bank’s net interest margin and overall funding costs.
During the three and nine months ended September 30, 2021, the Bank recognized payroll tax credits of $906,000 and $2.9 million, respectively, under the Employee Retention Credit program of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Also, during the third quarter, the Bank recorded a credit to provision for loan losses of $300,000 due to overall improvement in asset quality. Pre-tax income was $1.8 million and $4.4 million for the three and nine months ended September 30, 2021, respectively. Excluding the employee tax credit, pre-tax income was $896,000 and $1.5 million for the three- and nine-months periods, respectively.
Patriot President & CEO Robert Russell stated: “I am incredibly proud of the continued progress made over the past year. Improvement continues with respect to funding sources, asset quality and asset generation, all of which provide a positive impact on the Bank’s financials. The growth in our prepaid programs is a significant contributor to the reduction in the Bank’s funding costs over the last year. The Company has enhanced processes and added strategic talent to position for an effective future and we are very encouraged by the path we have forged.”
Since 2020, the Bank had provided payment deferrals on approximately $232.7 million of loans as permitted under the CARES Act. Virtually all of those loans deferred have now resumed normal payments. Only three loans remaining on deferral totaled $7.3 million at September 30, 2021.
Financial Results:
As of September 30, 2021, total assets increased to $952.3 million, as compared to $880.7 million at December 31, 2020, primarily due to increase in available-for-sale securities of $74.8 million. Net loans totaled $704.5 million versus $719.6 million as of December 31, 2020. Total deposits increased from $685.7 million at December 31, 2020, to $734.7 million at September 30, 2021.
The Bank has substantially improved its deposit and funding mix over the past year. During the past nine months, total deposits increased $49.0 million, primarily due to growth in prepaid deposits of $68.1 million, which was partially offset by decline of $27.3 million in brokered deposits and certificates of deposits. Excluding brokered deposits, total deposits increased 9.8% during the first nine months of 2021.
Net interest income was $6.3 million and $18.4 million for the three and nine months ended September 30, 2021, respectively. Net interest income for the three and nine months ended September 30, 2020, was $5.9 million and $17.9 million, respectively.
The Bank’s net interest margin showed strong improvement and was 2.87% for the nine months ended September 30, 2021, compared with 2.60% for the comparable 2020 period. As economic activity continues to expand, loan balances are expected to grow, and coupled with reductions in funding costs, the Bank expects further improvements in net interest income.
The recovering economy, lower loan balances and improvement in delinquencies of classified loans resulted in a $300,000 credit of provision for loan losses for the three and nine months ended September 30, 2021, as compared to a provision for loan losses of $85,000 and $1.8 million for the three and nine months ended September 30, 2020, respectively. The majority of the provision in 2020 was primarily attributable to conditions and the uncertainty created by the COVID-19 pandemic. As of September 30, 2021, the allowance for loan losses was 1.41% of total loans, compared with 1.45% at December 31, 2020.
Non-interest income was $923,000 and $2.1 million for the three and nine months ended September 30, 2021, respectively. Non-interest income was $704,000 and $1.5 million for the three and nine months ended September 30, 2020, respectively. The increase in the current quarter was primarily attributable to a gain of $512,000 recognized from the termination of an interest rate swap cash flow hedge in the third quarter of 2021.
Non-interest expense was $5.7 million and $16.4 million for the three and nine months ended September 30, 2021, respectively. Non-interest expense was $6.6 million and $20.9 million for the three and nine months ended September 30, 2020, respectively. The decrease in non-interest expense in the nine months ended September 30, 2021, was primarily driven by an Employee Retention Credit of $2.9 million under the CARES Act and a reduction of $510,000 in regulatory assessments expense.
For the nine months ended September 30, 2021, a provision for income taxes of $1.2 million was recorded, compared to a benefit for income taxes of $811,000 for the nine months ended September 30, 2020.
As of September 30, 2021, shareholders’ equity was $66.7 million, compared with $63.2 million at December 31, 2020. Patriot’s book value per share rose to $16.89 at September 30, 2021, compared with $16.03 at December 31, 2020.
About the Company:
Patriot 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, Ohio, along with a Rhode Island operations center.
Founded in 1994, and now celebrating its 27th 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. Patriot operates with full-service branches in Connecticut and New York and provides lending products and services nationally. 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 our philosophy as we seek 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 and subject to a variety of risks and uncertainties. These factors include, but are not limited to: (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 and other such factors, including risk factors, as may be described in the Company’s other filings with the Securities and Exchange Commission (the “SEC”); (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; and (25) our compensation expense associated with equity allocated or awarded to our employees.
| PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES | |||||||||||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||||||||
| (In thousands) | September 30, 2021 | December 31, 2020 | September 30, 2020 | ||||||||||
| Assets | |||||||||||||
| Cash and due from banks: | |||||||||||||
| Noninterest bearing deposits and cash | $ | 5,298 | $ | 3,006 | $ | 3,231 | |||||||
| Interest bearing deposits | 40,967 | 31,630 | 46,405 | ||||||||||
| Total cash and cash equivalents | 46,265 | 34,636 | 49,636 | ||||||||||
| Investment securities: | |||||||||||||
| Available-for-sale securities, at fair value | 124,103 | 49,262 | 47,823 | ||||||||||
| Other investments, at cost | 4,450 | 4,450 | 4,450 | ||||||||||
| Total investment securities | 128,553 | 53,712 | 52,273 | ||||||||||
| Federal Reserve Bank stock, at cost | 2,843 | 2,783 | 2,783 | ||||||||||
| Federal Home Loan Bank stock, at cost | 5,009 | 4,503 | 4,503 | ||||||||||
| Gross loans receivable | 714,538 | 730,180 | 751,298 | ||||||||||
| Allowance for loan losses | (10,079 | ) | (10,584 | ) | (11,171 | ) | |||||||
| Net loans receivable | 704,459 | 719,596 | 740,127 | ||||||||||
| SBA loans held for sale | 4,128 | 1,217 | 6,824 | ||||||||||
| Accrued interest and dividends receivable | 6,186 | 6,620 | 6,834 | ||||||||||
| Premises and equipment, net | 32,638 | 33,423 | 33,632 | ||||||||||
| Other real estate owned | - | 1,906 | 1,954 | ||||||||||
| Deferred tax asset, net | 10,352 | 11,496 | 12,066 | ||||||||||
| Goodwill | 1,107 | 1,107 | 1,107 | ||||||||||
| Core deposit intangible, net | 308 | 343 | 567 | ||||||||||
| Other assets | 10,498 | 9,387 | 10,623 | ||||||||||
| Total assets | $ | 952,346 | $ | 880,729 | $ | 922,929 | |||||||
| Liabilities | |||||||||||||
| Deposits: | |||||||||||||
| Noninterest bearing deposits | $ | 207,941 | $ | 158,676 | $ | 161,871 | |||||||
| Interest bearing deposits | 526,732 | 526,980 | 565,560 | ||||||||||
| Total deposits | 734,673 | 685,656 | 727,431 | ||||||||||
| Federal Home Loan Bank and correspondent bank borrowings | 110,000 | 90,000 | 90,000 | ||||||||||
| Senior notes, net | 11,983 | 11,927 | 11,909 | ||||||||||
| Subordinated debt, net | 9,803 | 9,782 | 9,774 | ||||||||||
| Junior subordinated debt owed to unconsolidated trust, net | 8,116 | 8,110 | 8,108 | ||||||||||
| Note payable | 842 | 994 | 1,044 | ||||||||||
| Advances from borrowers for taxes and insurance | 2,253 | 3,786 | 2,492 | ||||||||||
| Accrued expenses and other liabilities | 7,976 | 7,255 | 7,634 | ||||||||||
| Total liabilities | 885,646 | 817,510 | 858,392 | ||||||||||
| Commitments and Contingencies | - | - | - | ||||||||||
| Shareholders' equity | |||||||||||||
| Preferred stock | - | - | - | ||||||||||
| Common stock | 106,439 | 106,329 | 106,293 | ||||||||||
| Accumulated deficit | (39,393 | ) | (42,592 | ) | (41,210 | ) | |||||||
| Accumulated other comprehensive loss | (346 | ) | (518 | ) | (546 | ) | |||||||
| Total shareholders' equity | 66,700 | 63,219 | 64,537 | ||||||||||
| Total liabilities and shareholders' equity | $ | 952,346 | $ | 880,729 | $ | 922,929 | |||||||
| PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| (In thousands, except per share amounts) | September 30, 2021 | June 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||||
| Interest and Dividend Income | ||||||||||||||||||||
| Interest and fees on loans | $ | 7,189 | $ | 7,267 | $ | 8,578 | $ | 22,199 | $ | 27,722 | ||||||||||
| Interest on investment securities | 692 | 420 | 340 | 1,422 | 1,134 | |||||||||||||||
| Dividends on investment securities | 59 | 57 | 85 | 150 | 313 | |||||||||||||||
| Other interest income | 20 | 23 | 28 | 67 | 187 | |||||||||||||||
| Total interest and dividend income | 7,960 | 7,767 | 9,031 | 23,838 | 29,356 | |||||||||||||||
| Interest Expense | ||||||||||||||||||||
| Interest on deposits | 448 | 623 | 2,028 | 1,856 | 8,020 | |||||||||||||||
| Interest on Federal Home Loan Bank borrowings | 756 | 741 | 628 | 2,230 | 1,963 | |||||||||||||||
| Interest on senior debt | 229 | 228 | 229 | 686 | 686 | |||||||||||||||
| Interest on subordinated debt | 233 | 233 | 235 | 700 | 756 | |||||||||||||||
| Interest on note payable and other | 4 | 4 | 5 | 12 | 15 | |||||||||||||||
| Total interest expense | 1,670 | 1,829 | 3,125 | 5,484 | 11,440 | |||||||||||||||
| Net interest income | 6,290 | 5,938 | 5,906 | 18,354 | 17,916 | |||||||||||||||
| (Credit) provision for loan losses | (300 | ) | - | 85 | (300 | ) | 1,799 | |||||||||||||
| Net interest income after (credit) provision for loan losses | 6,590 | 5,938 | 5,821 | 18,654 | 16,117 | |||||||||||||||
| Non-interest Income | ||||||||||||||||||||
| Loan application, inspection and processing fees | 79 | 61 | 54 | 203 | 147 | |||||||||||||||
| Deposit fees and service charges | 61 | 64 | 73 | 190 | 253 | |||||||||||||||
| Gains on sale of loans | - | 258 | 380 | 352 | 464 | |||||||||||||||
| Rental income | 130 | 140 | 131 | 400 | 393 | |||||||||||||||
| Gain on sale of investment securities | 26 | 93 | - | 119 | - | |||||||||||||||
| Other income | 627 | 137 | 66 | 854 | 257 | |||||||||||||||
| Total non-interest income | 923 | 753 | 704 | 2,118 | 1,514 | |||||||||||||||
| Non-interest Expense | ||||||||||||||||||||
| Salaries and benefits | 2,843 | 2,447 | 3,460 | 7,506 | 10,966 | |||||||||||||||
| Occupancy and equipment expenses | 832 | 778 | 810 | 2,530 | 2,680 | |||||||||||||||
| Data processing expenses | 376 | 362 | 433 | 1,088 | 1,194 | |||||||||||||||
| Professional and other outside services | 633 | 714 | 627 | 2,199 | 2,137 | |||||||||||||||
| Project expenses, net | 4 | 1 | 6 | 15 | 154 | |||||||||||||||
| Advertising and promotional expenses | 57 | 77 | 107 | 196 | 377 | |||||||||||||||
| Loan administration and processing expenses | 23 | 14 | 75 | 61 | 135 | |||||||||||||||
| Regulatory assessments | 213 | 208 | 355 | 649 | 1,159 | |||||||||||||||
| Insurance expenses | 79 | 75 | 67 | 214 | 215 | |||||||||||||||
| Communications, stationary and supplies | 161 | 144 | 118 | 450 | 371 | |||||||||||||||
| Other operating expenses | 490 | 466 | 560 | 1,484 | 1,491 | |||||||||||||||
| Total non-interest expense | 5,711 | 5,286 | 6,618 | 16,392 | 20,879 | |||||||||||||||
| Income (loss) before income taxes | 1,802 | 1,405 | (93 | ) | 4,380 | (3,248 | ) | |||||||||||||
| Provision (benefit) for income taxes | 479 | 383 | (6 | ) | 1,181 | (811 | ) | |||||||||||||
| Net income (loss) | $ | 1,323 | $ | 1,022 | $ | (87 | ) | $ | 3,199 | $ | (2,437 | ) | ||||||||
| Basic earnings (loss) per share | $ | 0.34 | $ | 0.26 | $ | (0.02 | ) | $ | 0.81 | $ | (0.62 | ) | ||||||||
| Diluted earnings (loss) per share | $ | 0.34 | $ | 0.26 | $ | (0.02 | ) | $ | 0.81 | $ | (0.62 | ) | ||||||||
| FINANCIAL RATIOS AND OTHER DATA | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||||||
| Performance Data: | |||||||||||||||||||||||
| Net income (loss) | $ | 1,323 | $ | 1,022 | $ | (87 | ) | $ | 3,199 | $ | (2,437 | ) | |||||||||||
| Return on Average Assets | 0.56 | % | 0.46 | % | -0.04 | % | 0.47 | % | -0.33 | % | |||||||||||||
| Return on Average Equity | 7.86 | % | 6.35 | % | -0.53 | % | 6.56 | % | -4.94 | % | |||||||||||||
| Net Interest Margin | 2.82 | % | 2.82 | % | 2.61 | % | 2.87 | % | 2.60 | % | |||||||||||||
| Efficiency Ratio | 79.20 | % | 78.99 | % | 100.12 | % | 80.07 | % | 107.46 | % | |||||||||||||
| % increase (decrease) in loans | 6.51 | % | -0.85 | % | -5.20 | % | -2.14 | % | -7.49 | % | |||||||||||||
| % (decrease) increase in deposits excluding brokered deposits | -5.44 | % | 10.96 | % | 2.29 | % | 9.82 | % | 17.94 | % | |||||||||||||
| Asset Quality: | |||||||||||||||||||||||
| Nonaccrual loans | $ | 28,046 | $ | 24,524 | $ | 20,440 | $ | 28,046 | $ | 20,440 | |||||||||||||
| Other real estate owned | $ | - | $ | 1,216 | $ | 1,954 | $ | - | $ | 1,954 | |||||||||||||
| Total nonperforming assets | $ | 28,046 | $ | 25,740 | $ | 22,394 | $ | 28,046 | $ | 22,394 | |||||||||||||
| Nonaccrual loans / loans | 3.93 | % | 3.66 | % | 2.72 | % | 3.93 | % | 2.72 | % | |||||||||||||
| Nonperforming assets / assets | 2.94 | % | 2.67 | % | 2.43 | % | 2.94 | % | 2.43 | % | |||||||||||||
| Allowance for loan losses | $ | 10,079 | $ | 10,362 | $ | 11,171 | $ | 10,079 | $ | 11,171 | |||||||||||||
| Valuation reserve | $ | 466 | $ | 469 | $ | 492 | $ | 466 | $ | 492 | |||||||||||||
| Allowance for loan losses with valuation reserve | $ | 10,545 | $ | 10,831 | $ | 11,663 | $ | 10,545 | $ | 11,663 | |||||||||||||
| Allowance for loan losses / loans | 1.41 | % | 1.54 | % | 1.49 | % | 1.41 | % | 1.49 | % | |||||||||||||
| Allowance / nonaccrual loans | 35.94 | % | 42.25 | % | 54.65 | % | 35.94 | % | 54.65 | % | |||||||||||||
| Allowance for loan losses and valuation reserve / loans | 1.47 | % | 1.61 | % | 1.55 | % | 1.47 | % | 1.55 | % | |||||||||||||
| Allowance for loan losses and valuation reserve / nonaccrual loans | 37.60 | % | 44.16 | % | 57.06 | % | 37.60 | % | 57.06 | % | |||||||||||||
| Gross loan charge-offs | $ | 6 | $ | 80 | $ | 75 | $ | 358 | $ | 810 | |||||||||||||
| Gross loan (recoveries) | $ | (23 | ) | $ | (16 | ) | $ | (13 | ) | $ | (153 | ) | $ | (67 | ) | ||||||||
| Net loan charge-offs | $ | (17 | ) | $ | 64 | $ | 62 | $ | 205 | $ | 743 | ||||||||||||
| Per Share Data and Capital Ratio | |||||||||||||||||||||||
| Book value per share (1) | $ | 16.89 | $ | 16.69 | $ | 16.39 | $ | 16.89 | $ | 16.39 | |||||||||||||
| Tangible book value per share (2) | $ | 16.54 | $ | 16.32 | $ | 15.97 | $ | 16.54 | $ | 15.97 | |||||||||||||
| Tangible book value per share-fully diluted | $ | 16.41 | $ | 16.18 | $ | 15.86 | $ | 16.41 | $ | 15.86 | |||||||||||||
| Shares outstanding | 3,947,976 | 3,947,276 | 3,937,041 | 3,947,976 | 3,937,041 | ||||||||||||||||||
| Bank Leverage Ratio | 9.88 | % | 10.10 | % | 9.35 | % | 9.88 | % | 9.35 | % | |||||||||||||
| (1) Book value per share represents shareholders' equity divided by outstanding shares. | |||||||||||||||||||||||
| (2) Tangible book value per share represents shareholders' equity less intangible assets divided by outstanding shares. | |||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||
| September 30, 2021 | June 30, 2021 | December 31, 2020 | September 30, 2020 | ||||||||||||||||||||
| Non-interest bearing: | |||||||||||||||||||||||
| Non-interest bearing | $ | 114,850 | $ | 135,477 | $ | 99,344 | $ | 102,004 | |||||||||||||||
| Prepaid DDA | 93,091 | 82,897 | 59,332 | 59,867 | |||||||||||||||||||
| Total non-interest bearing | 207,941 | 218,374 | 158,676 | 161,871 | |||||||||||||||||||
| Interest bearing: | |||||||||||||||||||||||
| NOW | 34,528 | 36,085 | 30,529 | 29,518 | |||||||||||||||||||
| Savings | 102,365 | 99,264 | 98,635 | 91,169 | |||||||||||||||||||
| Money market | 116,318 | 123,327 | 131,378 | 142,906 | |||||||||||||||||||
| Money market - prepaid deposits | 49,353 | 54,922 | 15,011 | 3 | |||||||||||||||||||
| Certificates of deposit, less than $250,000 | 142,141 | 152,700 | 160,968 | 160,610 | |||||||||||||||||||
| Certificates of deposit, $250,000 or greater | 54,991 | 63,690 | 49,172 | 50,359 | |||||||||||||||||||
| Brokered deposits | 27,036 | 12,836 | 41,287 | 90,995 | |||||||||||||||||||
| Total Interest bearing | 526,732 | 542,824 | 526,980 | 565,560 | |||||||||||||||||||
| Total Deposits | $ | 734,673 | $ | 761,198 | $ | 685,656 | $ | 727,431 | |||||||||||||||
| Total Prepaid deposits | $ | 142,444 | $ | 137,819 | $ | 74,343 | $ | 59,870 | |||||||||||||||
| Total deposits excluding brokered deposits | $ | 707,637 | $ | 748,362 | $ | 644,369 | $ | 636,436 | |||||||||||||||
| 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 |
