Patriot National Bancorp(PNBK) - 2022 Q3 - Quarterly Report

Financial Performance - Total interest and dividend income for Q3 2022 was $12,039,000, a 51.9% increase from $7,960,000 in Q3 2021[10] - Net interest income after provision for loan losses for the nine months ended September 30, 2022, was $23,214,000, up from $18,654,000 in the same period of 2021, representing a 24.4% increase[10] - Net income for Q3 2022 was $2,326,000, a 76% increase from $1,323,000 in Q3 2021[10] - Basic earnings per share for Q3 2022 was $0.59, compared to $0.34 in Q3 2021, marking a 73.5% increase[10] - Net income for the nine months ended September 30, 2022, was $4,391, compared to $3,199 for the same period in 2021, representing a 37.3% increase[18] - Total non-interest income for the nine months ended September 30, 2022, was $2,266,000, compared to $2,118,000 in the same period of 2021, indicating a growth of 7%[10] - Total non-interest expense for Q3 2022 was $7,214,000, an increase from $5,711,000 in Q3 2021, which is a 26.3% rise[10] - The provision for income taxes in Q3 2022 was $157,000, down from $479,000 in Q3 2021, showing a decrease of 67.2%[10] Asset and Liability Management - The total assets of the company as of September 30, 2022, were $1,200,000,000, reflecting growth from the previous year[10] - Cash and cash equivalents at the end of the period for September 30, 2022, were $31,184, down from $46,265 at the end of September 30, 2021[19] - The company had a balance of $3,947,976 in common shares as of September 30, 2021, reflecting an increase from the previous period[16] - The total financial assets amounted to $998,801,000, with an estimated fair value of $977,709,000, compared to $892,719,000 and $891,279,000 as of December 31, 2021[153] - The total financial liabilities were $990,939,000 with an estimated fair value of $982,459,000 as of September 30, 2022, compared to $870,364,000 and $873,377,000 as of December 31, 2021[153] Loan Portfolio and Credit Quality - As of September 30, 2022, net loans receivable totaled $852.9 million, an increase of 16.9% from $729.6 million as of December 31, 2021[40] - The commercial real estate loan portfolio increased to $438.8 million from $365.2 million, reflecting a growth of 20.1%[40] - The allowance for loan and lease losses was $9.95 million as of September 30, 2022, slightly up from $9.91 million at the end of 2021[40] - The company’s lending activities are primarily focused in Connecticut and New York, with a significant reliance on the regional economy and real estate market conditions[40] - The total allowance for loan and lease losses as of September 30, 2021, was $10,079,000, indicating a decrease in the allowance compared to the current year[58] Investment Activities - The company purchased $11.8 million in U.S. Government agency mortgage-backed securities during the nine months ended September 30, 2022, a decrease from $112.0 million in the same period of 2021[39] - The company did not sell any available-for-sale securities during the three and nine months ended September 30, 2022, contrasting with sales totaling $53.7 million in 2021[39] - The total gross unrealized losses on available-for-sale securities as of September 30, 2022, amounted to $20.8 million, compared to $2.4 million on December 31, 2021, indicating a significant increase in losses[34] - The company has pledged available-for-sale securities worth $28.3 million to the Federal Reserve Bank as of September 30, 2022, down from $36.6 million on December 31, 2021[36] Deposits and Funding - Total deposits increased to $834.4 million as of September 30, 2022, up from $748.6 million at December 31, 2021, representing an increase of 11.5%[100] - Non-interest bearing deposits rose to $247.7 million, compared to $226.7 million in the previous year, reflecting an increase of 9.2%[100] - The company incurred share-based compensation expenses of $63 for the nine months ended September 30, 2022, down from $110 in 2021, reflecting a decrease of 42.7%[18] Risk Management - The company has established a credit approval process to mitigate credit risk associated with off-balance-sheet financial instruments[121] - The company monitors credit quality through indicators such as cash flow, loan-to-value ratios, and debt service coverage ratios[61] - A risk rating system is employed, requiring credit officers to assign ratings at loan origination, which are reviewed by the Loan Committee[62] - The internal eleven-point risk rating system classifies loans based on their risk, with categories including "special mention," "substandard," and "doubtful"[65][67] Other Financial Metrics - The company recognized $1.9 million in expenses related to the terminated merger with American Challenger for the full year ended December 31, 2021[98] - The carrying value of servicing assets increased to $706,000 as of September 30, 2022, compared to $584,000 at December 31, 2021, marking a rise of 20.8%[92] - The company has not paid any dividends since 2020 and has no present plans to pay dividends[117]