Patriot National Bancorp(PNBK) - 2022 Q2 - Quarterly Report

Financial Performance - For the three months ended June 30, 2022, net interest income increased to $7,720,000, up 30% from $5,938,000 in the same period of 2021[11] - Total interest and dividend income for the six months ended June 30, 2022, was $18,007,000, representing a 13.3% increase from $15,878,000 in 2021[11] - Non-interest income for the three months ended June 30, 2022, was $798,000, a slight increase from $753,000 in the same period of 2021[11] - Net income for the three months ended June 30, 2022, was $1,265,000, compared to $1,022,000 in the same period of 2021, marking a 24% increase[11] - Basic earnings per share for the three months ended June 30, 2022, was $0.32, up from $0.26 in the same period of 2021[11] - Net income for the six months ended June 30, 2022, was $2,065,000, an increase from $1,876,000 in the same period of 2021, representing a growth of approximately 10.1%[19] - Total comprehensive income for the six months ended June 30, 2022, was $2,563,000, up from $1,879,000 in 2021, indicating a growth of 36.5%[19] Expenses and Loss Provisions - The provision for loan losses for the three months ended June 30, 2022, was $275,000, compared to $0 in the same period of 2021[11] - Total non-interest expense increased to $6,502,000 for the three months ended June 30, 2022, up from $5,286,000 in 2021, reflecting a 23% increase[11] - The provision for loan losses was $275,000 for the six months ended June 30, 2022, while there was no provision for loan losses in the same period of 2021[19] - Charge-offs for the six months ended June 30, 2022, amounted to $285,000, while recoveries were $34,000[61] Assets and Equity - The balance of common stock increased to $106,520,000 as of June 30, 2022, from $106,500,000 at the end of the previous quarter[15] - The total shareholders' equity as of June 30, 2022, was $59,802,000, down from $62,683,000 at the end of the previous quarter[15] - Cash and cash equivalents at the end of the period for June 30, 2022, were $37,516,000, down from $116,191,000 at the end of June 30, 2021, indicating a decrease of approximately 67.7%[20] - The company reported a net cash used in operating activities of $2,241,000 for the six months ended June 30, 2022, compared to a net cash provided of $485,000 in the same period of 2021[19] Loans and Credit Quality - The company originated $138,414,000 in loans receivable for the six months ended June 30, 2022, compared to $59,362,000 in the same period of 2021, indicating an increase of approximately 133.3%[20] - The company’s allowance for loan and lease losses was $9.929 million as of June 30, 2022, slightly up from $9.905 million at the end of 2021[41] - The total gross loans receivable as of June 30, 2022, was $859,107,000, with $23,492,000 individually evaluated for impairment and $835,615,000 collectively evaluated[63] - The total performing loans amounted to $835,783,000, with $859,107,000 in gross loans receivable[72] - The commercial real estate loan portfolio increased to $448.884 million as of June 30, 2022, up from $365.247 million at the end of 2021, reflecting a growth of about 22.8%[41] Securities and Investments - As of June 30, 2022, available-for-sale securities had a fair value of $76.971 million, down from $94.341 million as of December 31, 2021, reflecting a decline of 18.4%[35] - The gross unrealized losses on available-for-sale securities amounted to $15.214 million as of June 30, 2022, compared to $2.384 million as of December 31, 2021, indicating a significant increase in losses[35] - The company purchased $2.0 million in corporate bonds and $1.0 million in subordinated notes during the six months ended June 30, 2022[40] - The company did not sell any available-for-sale securities during the three and six months ended June 30, 2022[40] Risk Management and Credit Policies - The company has established credit policies that limit commercial real estate loans to 75% of the market value of the underlying collateral[42] - The company employs a risk rating system for its loan portfolio, requiring credit officers to assign a risk rating at origination, which is reviewed by the Loan Committee[65] - The company monitors credit quality through indicators like cash flow, loan-to-value ratios, and debt service coverage ratios[64] - The company has established a credit approval process to mitigate credit risk associated with off-balance-sheet financial instruments[122] Other Financial Metrics - The Tier 1 leverage ratio as of June 30, 2022, was 9.44%, slightly down from 9.86% at the end of 2021, but still above the 9% requirement for being considered "well capitalized"[130] - The reserve for credit loss remained stable at $8,000,000 as of June 30, 2022, consistent with the previous year[124] - The company recognized total share-based compensation expense of $20,000 and $41,000 for the three and six months ended June 30, 2022, respectively[115]