Patriot National Bancorp(US:PNBK)2023-08-10 21:02Financial Performance - For the three months ended June 30, 2023, total interest and dividend income increased to $15,309,000, up 57.5% from $9,687,000 in the same period of 2022[15]. - The company reported a net loss of $546,000 for the three months ended June 30, 2023, compared to a net income of $1,265,000 in the same period of 2022[15]. - Net loss for the six months ended June 30, 2023, was $599,000 compared to a net income of $2,065,000 in 2022, representing a significant decline[22]. - Comprehensive loss for the three months ended June 30, 2023, was $2,187,000, compared to a comprehensive loss of $2,901,000 in the same period of 2022[17]. - The company’s basic loss per share for the three months ended June 30, 2023, was $0.14, compared to earnings of $0.32 per share in the same period of 2022[15]. Credit Losses and Provisions - The provision for credit losses increased significantly to $1,231,000 for the three months ended June 30, 2023, compared to $275,000 in the same period of 2022[15]. - Provision for credit losses increased to $2,567,000 in 2023 from $275,000 in 2022, indicating a rise in expected credit losses[22]. - The total allowance for credit losses increased to $16.9 million as of June 30, 2023, from $10.3 million at December 31, 2022, due to the adoption of CECL[187]. - The charge-offs for the six months ended June 30, 2023, totaled $4.468 million[85]. - The recoveries for the six months ended June 30, 2023, amounted to $460,000[85]. Interest and Expenses - The interest expense for the three months ended June 30, 2023, was $7,596,000, significantly higher than $1,967,000 in the same period of 2022[15]. - Total non-interest expense rose to $8,063,000 for the three months ended June 30, 2023, an increase of 24% from $6,502,000 in the same period of 2022[15]. - Cash paid for interest surged to $12,609,000 in 2023 from $3,482,000 in 2022, reflecting higher borrowing costs[23]. Assets and Equity - As of June 30, 2023, total shareholders' equity was $52,445,000, down from $54,609,000 at the end of the previous quarter[19]. - Total assets rose by $119.4 million to $1.2 billion as of June 30, 2023, primarily driven by increases in cash and loans receivable[180]. - Total cash and cash equivalents at the end of the period increased to $70,809,000 in 2023 from $37,516,000 in 2022[22]. Loans and Deposits - The company originated $132,611,000 in loans receivable in 2023, compared to $138,414,000 in 2022, indicating a slight decrease in loan origination activity[22]. - The total deposits held by the company amounted to $863.4 million, a slight increase from $860.4 million as of December 31, 2022[115]. - The net loan to deposit ratio was 105.8% and the net loan to total assets ratio was 78.6% as of June 30, 2023, compared to 106.2% and 80.3% at December 31, 2022, respectively[185]. Securities and Investments - As of June 30, 2023, the total available-for-sale securities amounted to $90.547 million, with an amortized cost of $112.163 million, resulting in gross unrealized losses of $21.679 million[48]. - The fair value of U.S. Government agency and mortgage-backed securities was $67.248 million as of June 30, 2023, with unrealized losses of $15.007 million[48]. - The company does not intend to sell the debt securities and expects to recover their amortized cost, which may be at maturity[50]. Risk Management - The company has established credit policies that limit commercial real estate loans to 75% of the market value of the underlying collateral[59]. - The company employs an independent third-party loan review expert for semi-annual assessments of its risk rating process, ensuring compliance and accuracy in risk evaluations[88]. - The company monitors credit quality through various indicators, including cash flow, loan-to-value ratios, and debt service coverage ratios[86]. Regulatory and Compliance - The Tier 1 leverage ratio for Patriot Bank, N.A. as of June 30, 2023, was 8.70%, down from 9.27% as of December 31, 2022, remaining above the required 9.00% under the Community Bank Leverage Ratio framework[142][143]. - The company adopted ASU 2016-13 effective January 1, 2023, which did not have a material impact on the consolidated financial statements[45]. Shareholder Information - The total share-based compensation expense for the six months ended June 30, 2023, was $46,000, which included $28,000 attributable to employees and $18,000 for external directors[128]. - As of June 30, 2023, the unrecognized compensation expense for unvested restricted shares was $190,000, expected to be recognized over a weighted average remaining life of 2.3 years[127].