• Patriot Reports Fourth Quarter 2021 Net Income of $1.9 Million and full year Net Income of $5.1 Million; continued growth in loans and deposits

    Source: Nasdaq GlobeNewswire / 16 Feb 2022 07:30:01   America/Chicago

    STAMFORD, Conn., Feb. 16, 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 $1.9 million, or $0.48 basic and diluted earnings per share for the quarter ended December 31, 2021, compared to a net loss of $1.4 million, or $0.35 basic and diluted loss per share reported in the fourth quarter of 2020. For the year ended December 31, 2021, net income was $5.1 million, or $1.29 per fully diluted share, compared to a net loss of $3.8 million, or $0.97 fully diluted loss per share for the year ended December 31, 2020.

    During the year ended December 31, 2021, the Bank recognized payroll tax credits of $2.9 million, under the Employee Retention Credit program of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The Bank did not recognize any amounts related to the Employee Retention Credit program in the fourth quarter of 2021. During the fourth quarter of 2021, Patriot announced a transformational merger transaction with American Challenger Development Corp. (“American Challenger”). As a result of the proposed merger transaction, material, non-recurring acquisition-related expenses of $1.85 million, or $0.47 per share, were incurred in the fourth quarter. Pre-tax GAAP income for the quarter ended December 31, 2021 was $633,000; and excluding the merger related charges, pre-tax income was $2.5 million. For the full year ended December 31, 2021, pre-tax income was $5.0 million. Excluding income from the Employee Retention Credit program and merger related charges, pre-tax income for the full year ended December 31, 2021 was $4.0 million, or $1.01 per share.

    The Bank reported loan growth of 3.5% and core deposit growth of 2.83% for the quarter. Net interest margin improved to 3.05% for the fourth quarter of 2021. The Bank’s prepaid debit card program continues to be an increasing, low-cost funding source for the Bank and has grown substantially in the last year and a half to $150.4 million as of December 31, 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.

    Patriot President & CEO Robert Russell stated: “Throughout 2021 the Patriot team continued pursuing operational improvements, with a focus on earnings growth and profitability. The results demonstrate these wide-spread achievements throughout the Bank, including growth across all asset classes and overall net margin improvement. The Bank is positioned for continued earnings and asset growth."

    Financial Results:

    As of December 31, 2021, total assets increased $67.8 million to $948.5 million, as compared to $880.7 million at December 31, 2020, primarily due to increase in available-for-sale securities of $45.0 million. Net loans increased from $719.6 million as of December 31, 2020, to $729.6 million at December 31, 2021. Total deposits increased from $685.7 million at December 31, 2020, to $748.6 million at December 31, 2021.

    The Bank has substantially improved its deposit and funding mix over the past year. During the past twelve months, total deposits increased $62.9 million, primarily due to growth in prepaid deposits of $76.0 million, which was partially offset by decline of $24.3 million in brokered deposits and certificates of deposits. Excluding brokered deposits, total deposits increased 13.5% during 2021.

    Net interest income for the quarter ended December 31, 2021, was $6.9 million, versus $6.2 million for the quarter ended December 31, 2020. Net interest income for the year ended December 31, 2021, was $25.3 million, versus $24.2 million for the year ended December 31, 2020.

    The Bank’s net interest margin showed strong improvement, with an increase to 3.05% for the quarter and 2.92% for the year ended December 31, 2021, compared with 2.93% and 2.68%, respectively, for the comparable period in 2020.  

    The recovering economy and improvement in classified loans resulted in a credit of provision for loan losses of $200,000 and $500,000 for the quarter and the year ended December 31, 2021, respectively. For the quarter and the year ended December 31, 2020, a provision for loan losses of $371,000 and $2.2 million was recorded, respectively. Most of the provision in 2020 was primarily attributable to conditions and the uncertainty created by the COVID-19 pandemic and a charge-off on one borrower in the fourth quarter of 2020. As of December 31, 2021, the allowance for loan losses was 1.34% of total loans, compared with 1.45% at December 31, 2020.

    Non-interest income for the quarter ended December 31, 2021, was $2.3 million, versus $465,000 for the quarter ended December 31, 2020.   Non-interest income for the year ended December 31, 2021, was $4.4 million, versus $2.0 million for the year ended December 31, 2020. The increase in the current quarter was primarily attributable to gains from sales of SBA loans totaled $1.5 million.

    Non-interest expense for the quarter ended December 31, 2021, was $8.8 million, versus $7.2 million for the quarter ended December 31, 2020. For the year ended December 31, 2021, non-interest expense was $25.2 million, versus $28.1 million for the year ended December 31, 2020. The increase in non-interest expense in the quarter ended December 31, 2021, was primarily driven by increased project expenses of $1.85 million related to the proposed merger with American Challenger. The Employee Retention Credits of $2.9 million drove part of the reduction year-over-year.

    For the year ended December 31, 2021, a benefit for income taxes of $81,000 was recorded, compared to a benefit for income taxes of $337,000 for the year ended December 31, 2020. The provision for income taxes reflected a full reversal of the valuation reserve for deferred tax assets, which decreased the income tax provision of $1.7 million in the fourth quarter of 2021.

    As of December 31, 2021, shareholders’ equity was $67.3 million, compared with $63.2 million at December 31,2020. Patriot’s book value per share rose to $17.02 at December 31, 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 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. 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 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 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.

     


    Contacts:  
    Patriot Bank, N.A. Joseph PerilloRobert Russell
    900 Bedford StreetChief Financial OfficerPresident & CEO
    Stamford, CT 06901203-252-5954203-252-5939
    www.BankPatriot.com  
       


    PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS (Unaudited)
            
            
    (In thousands)December 31,
    2021
     September 30,
    2021
     December 31,
    2020
            
    Assets      
    Cash and due from banks:     
     Noninterest bearing deposits and cash$3,264  $5,298  $3,006 
     Interest bearing deposits 43,781   40,967   31,630 
      Total cash and cash equivalents 47,045   46,265   34,636 
    Investment securities:     
     Available-for-sale securities, at fair value 94,341   124,103   49,262 
     Other investments, at cost 4,450   4,450   4,450 
      Total investment securities 98,791   128,553   53,712 
            
    Federal Reserve Bank stock, at cost 2,843   2,843   2,783 
    Federal Home Loan Bank stock, at cost 4,184   5,009   4,503 
            
    Gross loans receivable 739,488   714,538   730,180 
    Allowance for loan losses (9,905)  (10,079)  (10,584)
     Net loans receivable 729,583   704,459   719,596 
            
    SBA loans held for sale 3,129   4,128   1,217 
    Accrued interest and dividends receivable 5,822   6,186   6,620 
    Premises and equipment, net 31,500   32,638   33,423 
    Other real estate owned -   -   1,906 
    Deferred tax asset, net 12,146   10,352   11,496 
    Goodwill 1,107   1,107   1,107 
    Core deposit intangible, net 296   308   343 
    Other assets 12,035   10,498   9,387 
     Total assets$ 948,481  $ 952,346  $ 880,729 
            
    Liabilities     
    Deposits:     
     Noninterest bearing deposits$226,713  $207,941  $158,676 
     Interest bearing deposits 521,849   526,732   526,980 
      Total deposits 748,562   734,673   685,656 
            
    Federal Home Loan Bank and correspondent bank borrowings 90,000   110,000   90,000 
    Senior notes, net 12,000   11,983   11,927 
    Subordinated debt, net 9,811   9,803   9,782 
    Junior subordinated debt owed to unconsolidated trust, net 8,119   8,116   8,110 
    Note payable 791   842   994 
    Advances from borrowers for taxes and insurance 1,101   2,253   3,786 
    Accrued expenses and other liabilities 10,753   7,976   7,255 
      Total liabilities 881,137   885,646   817,510 
            
    Commitments and Contingencies -   -   - 
            
    Shareholders' equity     
    Preferred stock -   -   - 
    Common stock 106,479   106,439   106,329 
    Accumulated deficit (37,498)  (39,393)  (42,592)
    Accumulated other comprehensive loss (1,637)  (346)  (518)
      Total shareholders' equity 67,344   66,700   63,219 
            
     Total liabilities and shareholders' equity$ 948,481  $ 952,346  $ 880,729 
            


    PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                 
        Three Months Ended Year Ended
    (In thousands, except per share amounts)December 31,
    2021
     September 30,
    2021
     December 31,
    2020
     December 31,
    2021
     December 31,
    2020
                 
    Interest and Dividend Income         
     Interest and fees on loans$7,916  $7,189  $8,113  $30,115  $35,835 
     Interest on investment securities 502   692   326   1,924   1,460 
     Dividends on investment securities 73   59   86   223   399 
     Other interest income 22   20   22   89   209 
      Total interest and dividend income  8,513   7,960   8,547   32,351   37,903 
                 
    Interest Expense         
     Interest on deposits 387   448   1,134   2,243   9,154 
     Interest on Federal Home Loan Bank borrowings 756   756   708   2,986   2,671 
     Interest on senior debt 227   229   229   913   915 
     Interest on subordinated debt 233   233   235   933   991 
     Interest on note payable and other 3   4   4   15   19 
      Total interest expense  1,606   1,670   2,310   7,090   13,750 
                 
      Net interest income  6,907   6,290   6,237   25,261   24,153 
                 
    (Credit) provision for loan losses (200)  (300)  371   (500)  2,170 
                 
      Net interest income after provision for loan losses  7,107   6,590   5,866   25,761   21,983 
                 
    Non-interest Income         
     Loan application, inspection and processing fees 54   79   76   257   223 
     Deposit fees and service charges 61   61   68   251   321 
     Gains on sale of loans 1,534   -   102   1,886   566 
     Rental income 143   130   130   543   523 
     Gain on sale of investment securities (43)  26   -   76   - 
     Other income 556   627   89   1,410   346 
      Total non-interest income  2,305   923   465   4,423   1,979 
                 
    Non-interest Expense         
     Salaries and benefits 3,583   2,843   3,357   11,089   14,323 
     Occupancy and equipment expenses 900   832   833   3,430   3,513 
     Data processing expenses 363   376   377   1,451   1,571 
     Professional and other outside services 956   633   691   3,155   2,828 
     Project expenses, net 1,867   4   664   1,882   818 
     Advertising and promotional expenses 39   57   77   235   454 
     Loan administration and processing expenses 73   23   39   134   174 
     Regulatory assessments 258   213   318   907   1,477 
     Insurance expenses 66   79   70   280   285 
     Communications, stationary and supplies 154   161   105   604   476 
     Other operating expenses 520   490   708   2,004   2,199 
      Total non-interest expense  8,779   5,711   7,239   25,171   28,118 
                 
      Income (loss) before income taxes  633   1,802   (908)  5,013   (4,156)
                 
    (Benefit) provision for income taxes (1,262)  479   474   (81)  (337)
      Net income (loss) $1,895  $1,323  $(1,382) $5,094  $(3,819)
                 
      Basic earnings (loss) per share $0.48  $0.34  $(0.35) $1.29  $(0.97)
      Diluted earnings (loss) per share $0.48  $0.34  $(0.35) $1.29  $(0.97)
                 



    FINANCIAL RATIOS AND OTHER DATA
                  
         Three Months Ended Year- To- Date
       (Dollars in thousands) December 31,
    2021
     September 30,
    2021
     December 31,
    2020
     December 31,
    2021
     December 31,
    2020
                  
    Quarterly Performance Data:          
                  
      Net income (loss) $1,895  $1,323  $(1,382) $5,094  $(3,819)  
      Return on Average Assets  0.79%  0.56%  -0.61%  0.55%  -0.40%
      Return on Average Equity  11.21%  7.86%  -8.41%  7.75%  -5.81%
      Net Interest Margin  3.05%  2.82%  2.93%  2.92%  2.68%
      Efficiency Ratio  95.30%  79.18%  108.04%  84.80%  107.60%
      Efficiency Ratio excluding project costs  75.03%  79.12%  98.58%  78.46%  104.59%
      % increase (decrease) in loans  3.49%  6.51%  -2.81%  1.27%  -10.09%
      % increase (decrease) in deposits excluding brokered deposits  3.38%  -5.44%  1.25%  13.53%  19.41%
                  
    Asset Quality:          
      Nonaccrual loans $23,095  $28,046  $20,005  $23,095  $20,005 
      Other real estate owned $-  $-  $1,906  $-  $1,906 
       Total nonperforming assets $23,095  $28,046  $21,911  $23,095  $21,911 
                  
      Nonaccrual loans / loans  3.12%  3.93%  2.74%  3.12%  2.74%
      Nonperforming assets / assets  2.43%  2.94%  2.49%  2.43%  2.49%
      Allowance for loan losses $9,905  $10,079  $10,584  $9,905  $10,584 
      Valuation reserve $459  $466  $482  $459  $482 
      Allowance for loan losses with valuation reserve $10,364  $10,545  $11,066  $10,364  $11,066 
                  
      Allowance for loan losses / loans  1.34%  1.41%  1.45%  1.34%  1.45%
      Allowance / nonaccrual loans  42.89%  35.94%  52.91%  42.89%  52.91%
      Allowance for loan losses and valuation reserve / loans  1.40%  1.47%  1.51%  1.40%  1.51%
      Allowance for loan losses and valuation reserve / nonaccrual loans  44.88%  37.60%  55.32%  44.88%  55.32%
                  
      Gross loan charge-offs $-  $6  $968  $358  $1,778 
      Gross loan (recoveries) $(25) $(23) $(10) $(179) $(76)
      Net loan charge-offs (recoveries) $(25) $(17) $958  $179  $1,702 
                  
    Capital Data and Capital Ratios          
      Book value per share (1) $17.02  $16.89  $16.03  $17.02  $16.03 
      Tangible book value per share (2) $16.67  $16.54  $15.66  $16.67  $15.66 
      Tangible book value per share-fully diluted $16.58  $16.41  $15.59  $16.58  $15.59 
                  
      Shares outstanding  3,956,492   3,947,976   3,943,572   3,956,492   3,943,572 
                  
      Bank Leverage Ratio  9.85%  9.88%  9.80%  9.85%  9.80%
                  
     (1) Book value per share represents shareholders' equity divided by outstanding shares.
     (2) Tagible book value per share represents tangible assets divided by outstanding shares.
                  
                  
                  
    Deposits:          
       (In thousands)          
         December 31,
    2021
     September 30,
    2021
     December 31,
    2020
        
     Non-interest bearing:          
     Non-interest bearing $127,420  $114,850  $99,344     
     Prepaid DDA  99,293   93,091   59,332     
       Total non-interest bearing  226,713   207,941   158,676     
                  
     Interest bearing:          
     NOW  34,741   34,528   30,529     
     Savings  109,744   102,365   98,635     
     Money market  113,428   116,318   131,378     
     Money market - prepaid deposits  51,090   49,353   15,011     
     Certificates of deposit, less than $250,000  142,246   142,141   160,968     
     Certificates of deposit, $250,000 or greater  53,584   54,991   49,172     
     Brokered deposits  17,016   27,036   41,287     
       Total Interest bearing  521,849   526,732   526,980     
                  
       Total Deposits $748,562  $734,673  $685,656     
                  
       Total Prepaid deposits $150,383  $142,444  $74,343     
                  
       Total deposits excluding brokered deposits $731,546  $707,637  $644,369     
                  



    Non-GAAP Financial Measures:
          
    In addition to evaluating the Company's financial performance in accordance with U.S. generally accepted accounting principles ("GAAP"), management may evaluate certain non-GAAP financial measures, such as per share numbers for merger and acquisition related project expenses, and pre-tax income excluding Employee Retention Credit and project expenses. A computation and reconciliation of certain non-GAAP financial measures used for these purposes is contained in the accompanying Reconciliation of GAAP to Non-GAAP Measures tables. We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.
          
    Reconciliation of GAAP to Non-GAAP Measures (unaudited):
          
       Three Months Ended Year Ended
    (Dollars in thousands) December 31, 2021 December 31, 2021
          
    Net Income excluding Employee retention Credit (ERC) and project expenses:   
     Net Income reported $1,895  $5,094 
     (Benefit) Provision for income taxes  (1,262)  (81)
     Income before income taxes reported  633   5,013 
     Employee Retention Credit  -   (2,896)
     Project expenses related to merger with American Challenger  1,851   1,851 
     Pre-tax income excluding ERC and project expenses $ 2,484  $ 3,968 
          
     Weighted average shares outstanding  3,948,069   3,946,384 
     Pre-tax income excluding ERC and project expenses per share $ 0.63  $ 1.01 
          
    Project expenses per share:    
     Project expenses related to merger with American Challenger $1,851  $1,851 
     Weighted average shares outstanding  3,948,069   3,946,384 
     Project expenses per share $ 0.47  $ 0.47 
          

     


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