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.

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.

* * * * *

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

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

Patriot Reports Second Quarter 2022 Net Income of $1.3 million; continued growth in loans and deposits