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Patriot Reports Third Quarter 2021 Net Income of $1.3 Million

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Patriot National Bancorp (NASDAQ: PNBK) reported a net income of $1.3 million for Q3 2021, a turnaround from a net loss of $87,000 in Q3 2020. Year-to-date, net income reached $3.2 million, up from a loss of $2.4 million in the same period last year. Key highlights include growth in prepaid deposits to $142.4 million and a $300,000 credit to provision for loan losses, indicating improved asset quality. Total assets rose to $952.3 million, while total deposits increased to $734.7 million. Book value per share improved to $16.89, from $16.03 at year-end 2020.

Positive
  • Net income increased to $1.3 million for Q3 2021 from a loss of $87,000 in Q3 2020.
  • Year-to-date net income improved to $3.2 million from a loss of $2.4 million in the same period of 2020.
  • Prepaid deposit growth to $142.4 million, enhancing funding costs.
  • Total deposits rose to $734.7 million from $685.7 million at year-end 2020.
  • Non-interest expenses decreased significantly to $16.4 million for nine months ended September 30, 2021.
  • Book value per share increased to $16.89 from $16.03 at December 31, 2020.
Negative
  • Net loans decreased to $704.5 million from $719.6 million at December 31, 2020.
  • Total deposits growth was partially offset by a decline in brokered deposits and certificates of deposits.

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     

 


 


FAQ

What is Patriot National Bancorp's net income for Q3 2021?

Patriot National Bancorp reported a net income of $1.3 million for Q3 2021.

How did Patriot National Bancorp perform year-to-date in 2021?

Year-to-date, Patriot National Bancorp's net income reached $3.2 million.

What growth did the prepaid deposit program show for Patriot National Bancorp?

The prepaid deposit program grew to $142.4 million as of September 30, 2021.

What was the book value per share for Patriot National Bancorp as of September 30, 2021?

The book value per share for Patriot National Bancorp was $16.89 as of September 30, 2021.

Did Patriot National Bancorp report any provision for loan losses?

Yes, the bank recorded a $300,000 credit to provision for loan losses due to improved asset quality.

Patriot National Bancorp Inc

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Banks - Regional
National Commercial Banks
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United States of America
STAMFORD