These results compared to net loss of $53 thousand, or
For the six months ended
The first half year of 2023 financial results were adversely impacted by increasing reserves, which resulted in an elevated provision for credit losses of
The Bank reported steady loan growth of almost 6% in the second quarter of 2023, as compared to the prior quarter. Net interest margin decreased slightly, but remained strong at 2.96%.
Commenting on the results, Patriot President & CEO
Though the speed of recent interest rate increases may have knock-on effects that require further reserve increases, fresh market signals indicate the need for continued increases may be slowing. Over the long term, the Bank’s in-process investments are expected to more than offset impacts from increased rates, driven by low-cost deposit and fee income generators.
In the near term, as these programs continue to build out, the Bank will refocus efforts on credit quality and continue to manage non-interest expense. Additionally, the Bank continues to actively pursue a number of strategic actions that will position us for further growth opportunities.”
Financial Results:
Total assets increased to
Net interest income for the three months ended
The Bank’s net interest margin was 2.96% for the three months ended
A provision for credit losses of
Non-interest income was $829 thousand and $798 thousand for the three months ended
Non-interest expenses for the quarter ended
In 2023, a benefit for income taxes of $206 thousand and $225 thousand was recorded for the three and six months ended
About the Company:
Founded in 1994, and now celebrating its 29th year,
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. The 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 business, 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
CONSOLIDATED BALANCE SHEETS (Unaudited)
2023 | 2022 | 2022 | |||||||||
Assets | |||||||||||
Cash and due from banks: | |||||||||||
Noninterest bearing deposits and cash | $ | 2,320 | $ | 5,182 | $ | 4,507 | |||||
Interest bearing deposits | 68,489 | 33,311 | 33,009 | ||||||||
Total cash and cash equivalents | 70,809 | 38,493 | 37,516 | ||||||||
Investment securities: | |||||||||||
Available-for-sale securities, at fair value | 90,547 | 84,520 | 76,971 | ||||||||
Other investments, at cost | 4,450 | 4,450 | 4,450 | ||||||||
Total investment securities | 94,997 | 88,970 | 81,421 | ||||||||
2,523 | 2,627 | 2,762 | |||||||||
8,072 | 3,874 | 4,474 | |||||||||
Gross loans receivable | 930,734 | 848,316 | 859,107 | ||||||||
Allowance for credit losses | (16,858 | ) | (10,310 | ) | (9,929 | ) | |||||
Net loans receivable | 913,876 | 838,006 | 849,178 | ||||||||
SBA loans held for sale | 5,860 | 5,211 | 7,556 | ||||||||
Accrued interest and dividends receivable | 7,628 | 7,267 | 5,727 | ||||||||
Premises and equipment, net | 30,262 | 30,641 | 31,128 | ||||||||
Deferred tax asset | 18,169 | 15,527 | 14,910 | ||||||||
1,107 | 1,107 | 1,107 | |||||||||
Core deposit intangible, net | 226 | 249 | 273 | ||||||||
Other assets | 9,202 | 11,387 | 13,128 | ||||||||
Total assets | $ | 1,162,731 | $ | 1,043,359 | $ | 1,049,180 | |||||
Liabilities | |||||||||||
Deposits: | |||||||||||
Noninterest bearing deposits | $ | 127,817 | $ | 269,636 | $ | 271,165 | |||||
Interest bearing deposits | 735,562 | 590,810 | 575,618 | ||||||||
Total deposits | 863,379 | 860,446 | 846,783 | ||||||||
207,000 | 85,000 | 100,000 | |||||||||
Senior notes, net | 11,653 | 11,640 | 12,000 | ||||||||
Subordinated debt, net | 9,854 | 9,840 | 9,825 | ||||||||
Junior subordinated debt owed to unconsolidated trust, net | 8,132 | 8,128 | 8,123 | ||||||||
Note payable | 481 | 585 | 689 | ||||||||
Advances from borrowers for taxes and insurance | 3,094 | 886 | 2,967 | ||||||||
Accrued expenses and other liabilities | 6,693 | 7,251 | 8,991 | ||||||||
Total liabilities | 1,110,286 | 983,776 | 989,378 | ||||||||
Commitments and Contingencies | - | - | - | ||||||||
Shareholders' equity | |||||||||||
Preferred stock | - | - | - | ||||||||
Common stock | 106,611 | 106,565 | 106,520 | ||||||||
Accumulated deficit | (38,127 | ) | (31,337 | ) | (35,433 | ) | |||||
Accumulated other comprehensive loss | (16,039 | ) | (15,645 | ) | (11,285 | ) | |||||
Total shareholders' equity | 52,445 | 59,583 | 59,802 | ||||||||
Total liabilities and shareholders' equity | $ | 1,162,731 | $ | 1,043,359 | $ | 1,049,180 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||||
(In thousands, except per share amounts) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Interest and Dividend Income | |||||||||||||||||
Interest and fees on loans | $ | 14,052 | $ | 12,550 | $ | 9,044 | $ | 26,602 | $ | 16,708 | |||||||
Interest on investment securities | 687 | 680 | 510 | 1,367 | 1,080 | ||||||||||||
Dividends on investment securities | 171 | 135 | 65 | 306 | 130 | ||||||||||||
Other interest income | 399 | 281 | 68 | 680 | 89 | ||||||||||||
Total interest and dividend income | 15,309 | 13,646 | 9,687 | 28,955 | 18,007 | ||||||||||||
Interest Expense | |||||||||||||||||
Interest on deposits | 5,248 | 3,579 | 757 | 8,827 | 1,166 | ||||||||||||
Interest on | 1,723 | 1,436 | 747 | 3,159 | 1,484 | ||||||||||||
Interest on senior debt | 289 | 290 | 210 | 579 | 420 | ||||||||||||
Interest on subordinated debt | 333 | 326 | 251 | 659 | 485 | ||||||||||||
Interest on note payable | 3 | 2 | 2 | 5 | 6 | ||||||||||||
Total interest expense | 7,596 | 5,633 | 1,967 | 13,229 | 3,561 | ||||||||||||
Net interest income | 7,713 | 8,013 | 7,720 | 15,726 | 14,446 | ||||||||||||
Provision for credit losses | 1,231 | 1,336 | 275 | 2,567 | 275 | ||||||||||||
Net interest income after provision for credit losses | 6,482 | 6,677 | 7,445 | 13,159 | 14,171 | ||||||||||||
Non-interest Income | |||||||||||||||||
Loan application, inspection and processing fees | 121 | 123 | 89 | 244 | 176 | ||||||||||||
Deposit fees and service charges | 74 | 68 | 60 | 142 | 124 | ||||||||||||
Gains on sale of loans | 85 | 81 | 301 | 166 | 509 | ||||||||||||
Rental income | 105 | 119 | 132 | 224 | 324 | ||||||||||||
Gain on sale of investment securities | - | 24 | — | 24 | — | ||||||||||||
Other income | 444 | 420 | 216 | 864 | 479 | ||||||||||||
Total non-interest income | 829 | 835 | 798 | 1,664 | 1,612 | ||||||||||||
Non-interest Expense | |||||||||||||||||
Salaries and benefits | 4,661 | 4,267 | 3,763 | 8,928 | 7,109 | ||||||||||||
Occupancy and equipment expenses | 839 | 884 | 881 | 1,723 | 1,717 | ||||||||||||
Data processing expenses | 316 | 294 | 283 | 610 | 613 | ||||||||||||
Professional and other outside services | 727 | 914 | 559 | 1,641 | 1,348 | ||||||||||||
Project expenses, net | 66 | 27 | 29 | 93 | 81 | ||||||||||||
Advertising and promotional expenses | 77 | 85 | 73 | 162 | 141 | ||||||||||||
Loan administration and processing expenses | 103 | 51 | 42 | 154 | 147 | ||||||||||||
Regulatory assessments | 317 | 182 | 179 | 499 | 353 | ||||||||||||
Insurance expenses | 68 | 77 | 76 | 145 | 153 | ||||||||||||
Communications, stationary and supplies | 241 | 191 | 139 | 432 | 274 | ||||||||||||
Other operating expenses | 648 | 612 | 478 | 1,260 | 995 | ||||||||||||
Total non-interest expense | 8,063 | 7,584 | 6,502 | 15,647 | 12,931 | ||||||||||||
(Loss) income before income taxes | (752 | ) | (72 | ) | 1,741 | (824 | ) | 2,852 | |||||||||
(Benefit) provision for income taxes | (206 | ) | (19 | ) | 476 | (225 | ) | 787 | |||||||||
Net (loss) income | $ | (546 | ) | $ | (53 | ) | $ | 1,265 | $ | (599 | ) | $ | 2,065 | ||||
Basic (loss) earnings per share | $ | (0.14 | ) | $ | (0.01 | ) | $ | 0.32 | $ | (0.15 | ) | $ | 0.52 | ||||
Diluted (loss) earnings per share | $ | (0.14 | ) | $ | (0.01 | ) | $ | 0.32 | $ | (0.15 | ) | $ | 0.52 |
FINANCIAL RATIOS AND OTHER DATA
Three Months Ended | Year Ended | ||||||||||||||||||
(Dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
Quarterly Performance Data: | |||||||||||||||||||
Net (loss) income | $ | (546 | ) | $ | (53 | ) | $ | 1,265 | $ | (599 | ) | $ | 2,065 | ||||||
Return on Average Assets | -0.20 | % | -0.02 | % | 0.50 | % | -0.11 | % | 0.42 | % | |||||||||
Return on Average Equity | -3.93 | % | -0.39 | % | 8.20 | % | -2.18 | % | 6.49 | % | |||||||||
Net Interest Margin | 2.96 | % | 3.29 | % | 3.27 | % | 3.12 | % | 3.17 | % | |||||||||
Efficiency Ratio | 94.39 | % | 85.72 | % | 76.33 | % | 89.98 | % | 80.53 | % | |||||||||
Efficiency Ratio excluding project costs | 94.32 | % | 85.42 | % | 76.00 | % | 89.79 | % | 80.03 | % | |||||||||
% increase in loans | 5.91 | % | 3.59 | % | 11.09 | % | 9.72 | % | 16.18 | % | |||||||||
% increase (decrease) in deposits | 0.81 | % | -0.46 | % | 8.58 | % | 0.34 | % | 13.12 | % | |||||||||
Asset Quality: | |||||||||||||||||||
Nonaccrual loans | $ | 20,634 | $ | 23,769 | $ | 23,324 | $ | 20,634 | $ | 23,324 | |||||||||
Nonaccrual loans / loans | 2.22 | % | 2.70 | % | 2.71 | % | 2.22 | % | 2.71 | % | |||||||||
Nonaccrual loans / assets | 1.77 | % | 2.16 | % | 2.22 | % | 1.77 | % | 2.22 | % | |||||||||
Allowance for loan losses | $ | 16,858 | $ | 17,801 | $ | 9,929 | $ | 16,858 | $ | 9,929 | |||||||||
Allowance for loan losses / loans | 1.81 | % | 2.03 | % | 1.16 | % | 1.81 | % | 1.16 | % | |||||||||
Allowance / nonaccrual loans | 81.70 | % | 74.89 | % | 42.57 | % | 81.70 | % | 42.57 | % | |||||||||
Loan charge-offs | $ | 2,670 | $ | 1,798 | $ | 100 | $ | 4,468 | $ | 285 | |||||||||
Loan (recoveries) | $ | (280 | ) | $ | (180 | ) | $ | (17 | ) | $ | (460 | ) | $ | (34 | ) | ||||
Net loan charge-offs | $ | 2,390 | $ | 1,618 | $ | 83 | $ | 4,008 | $ | 251 | |||||||||
Capital Data and Capital Ratios | |||||||||||||||||||
Book value per share (1) | $ | 13.23 | $ | 13.77 | $ | 15.11 | $ | 13.23 | $ | 15.11 | |||||||||
Non-GAAP Tangible book value per share (2) | $ | 12.89 | $ | 13.43 | $ | 14.76 | $ | 12.89 | $ | 14.76 | |||||||||
Non-GAAP Tangible book value excluding other comprehensive loss per share (3) | $ | 16.94 | $ | 17.06 | $ | 17.61 | $ | 16.94 | $ | 17.61 | |||||||||
Shares outstanding | 3,965,186 | 3,965,186 | 3,957,269 | 3,965,186 | 3,957,269 | ||||||||||||||
Bank Leverage Ratio | 8.70 | % | 9.29 | % | 9.44 | % | 8.70 | % | 9.44 | % |
(1) | Book value per share represents shareholders' equity divided by outstanding shares. |
(2) | Tangible book value per share represents tangible assets divided by outstanding shares. |
(3) | Tangible book value excluding other comprehensive loss per share represents tangible assets excluding unrealized loss on investments, net of income tax divided by outstanding shares. |
Deposits:
(In thousands) | 2023 | 2022 | 2022 | ||||||||
Non-interest bearing: | |||||||||||
Non-interest bearing | $ | 104,413 | $ | 118,541 | $ | 137,320 | |||||
Prepaid DDA | 23,404 | 151,095 | 133,845 | ||||||||
Total non-interest bearing | 127,817 | 269,636 | 271,165 | ||||||||
Interest bearing: | |||||||||||
NOW | 37,970 | 34,440 | 35,973 | ||||||||
Savings | 50,981 | 71,002 | 99,686 | ||||||||
Money market | 163,982 | 164,827 | 151,212 | ||||||||
Money market - prepaid deposits | 134,735 | 46,173 | 32,891 | ||||||||
Certificates of deposit, less than | 182,680 | 165,793 | 169,690 | ||||||||
Certificates of deposit, | 56,088 | 59,877 | 51,491 | ||||||||
Brokered deposits | 109,126 | 48,698 | 34,675 | ||||||||
Total Interest bearing | 735,562 | 590,810 | 575,618 | ||||||||
Total Deposits | $ | 863,379 | $ | 860,446 | $ | 846,783 | |||||
Total prepaid deposits | $ | 158,139 | $ | 197,268 | $ | 166,736 | |||||
Total deposits excluding prepaid deposits | $ | 705,240 | $ | 663,178 | $ | 680,047 | |||||
Total uninsured deposits | $ | 285,752 | $ | 343,980 | $ | 351,924 | |||||
Uninsured deposits to total deposits | 33.10 | % | 39.98 | % | 41.56 | % | |||||
Uninsured deposits to total deposits excluding prepaid deposits | 17.71 | % | 22.35 | % | 27.42 | % |
Non-GAAP Financial Measures:
In addition to evaluating the Company's financial performance in accordance with
Reconciliation of GAAP to Non-GAAP Measures (unaudited):
(Dollars in thousands) | |||||||||||
Tangible book value per share | |||||||||||
Total shareholders' equity | $ | 52,445 | $ | 54,609 | $ | 59,802 | |||||
(1,107 | ) | (1,107 | ) | (1,107 | ) | ||||||
Core deposit intangible, net | (226 | ) | (238 | ) | (273 | ) | |||||
Tangible book value | $ | 51,112 | $ | 53,264 | $ | 58,422 | |||||
Shares outstanding | 3,965,186 | 3,965,186 | 3,957,269 | ||||||||
Tangible book value per share | $ | 12.89 | $ | 13.43 | $ | 14.76 | |||||
Tangible book value excluding other comprehensive loss per share | |||||||||||
Tangible book value | $ | 51,112 | $ | 53,264 | $ | 58,422 | |||||
Other comprehensive loss | 16,039 | 14,398 | 11,285 | ||||||||
Tangible book value excluding other comprehensive loss | $ | 67,151 | $ | 67,662 | $ | 69,707 | |||||
Shares outstanding | 3,965,186 | 3,965,186 | 3,957,269 | ||||||||
Tangible book value excluding other comprehensive loss per share | $ | 16.94 | $ | 17.06 | $ | 17.61 |
Contacts: | ||
Chief Financial Officer | President & CEO | |
203-252-5954 | 203-252-5959 | |
www.BankPatriot.com |
Source:
2023 GlobeNewswire, Inc., source