STAMFORD, Conn., Oct. 29, 2021 (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 $0.34 basic and diluted earnings per share for the quarter ended September 30, 2021, compared to a net loss of $87,000, or $0.02 basic and diluted loss per share reported in the third quarter of 2020. On a year-to-date basis, net income was $3.2 million, or $0.81 per fully diluted share, compared to a net loss of $2.4 million, or $0.62 fully diluted loss per share during the same year-to-date period in 2020.

The Bank continued to show improved net interest margins, core deposit growth, and lower operating expenses. The prepaid debit card program continues to be an increasing, low-cost funding source for the Bank and has grown substantially to $142.4 million as of September 30, 2021, from the $50.0 million acquired in July 2020. The portfolio growth provides a substantial improvement to the Bank's net interest margin and overall funding costs.

During the three and nine months ended September 30, 2021, the Bank recognized payroll tax credits of $906,000 and $2.9 million, respectively, under the Employee Retention Credit program of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). Also, during the third quarter, the Bank recorded a credit to provision for loan losses of $300,000 due to overall improvement in asset quality. Pre-tax income was $1.8 million and $4.4 million for the three and nine months ended September 30, 2021, respectively. Excluding the employee tax credit, pre-tax income was $896,000 and $1.5 million for the three- and nine-months periods, respectively.

Patriot President & CEO Robert Russell stated: "I am incredibly proud of the continued progress made over the past year. Improvement continues with respect to funding sources, asset quality and asset generation, all of which provide a positive impact on the Bank's financials. The growth in our prepaid programs is a significant contributor to the reduction in the Bank's funding costs over the last year. The Company has enhanced processes and added strategic talent to position for an effective future and we are very encouraged by the path we have forged."

Since 2020, the Bank had provided payment deferrals on approximately $232.7 million of loans as permitted under the CARES Act. Virtually all of those loans deferred have now resumed normal payments. Only three loans remaining on deferral totaled $7.3 million at September 30, 2021.

Financial Results:

As of September 30, 2021, total assets increased to $952.3 million, as compared to $880.7 million at December 31, 2020, primarily due to increase in available-for-sale securities of $74.8 million. Net loans totaled $704.5 million versus $719.6 million as of December 31, 2020. Total deposits increased from $685.7 million at December 31, 2020, to $734.7 million at September 30, 2021.

The Bank has substantially improved its deposit and funding mix over the past year. During the past nine months, total deposits increased $49.0 million, primarily due to growth in prepaid deposits of $68.1 million, which was partially offset by decline of $27.3 million in brokered deposits and certificates of deposits. Excluding brokered deposits, total deposits increased 9.8% during the first nine months of 2021.

Net interest income was $6.3 million and $18.4 million for the three and nine months ended September 30, 2021, respectively. Net interest income for the three and nine months ended September 30, 2020, was $5.9 million and $17.9 million, respectively.

The Bank's net interest margin showed strong improvement and was 2.87% for the nine months ended September 30, 2021, compared with 2.60% for the comparable 2020 period. As economic activity continues to expand, loan balances are expected to grow, and coupled with reductions in funding costs, the Bank expects further improvements in net interest income.

The recovering economy, lower loan balances and improvement in delinquencies of classified loans resulted in a $300,000 credit of provision for loan losses for the three and nine months ended September 30, 2021, as compared to a provision for loan losses of $85,000 and $1.8 million for the three and nine months ended September 30, 2020, respectively. The majority of the provision in 2020 was primarily attributable to conditions and the uncertainty created by the COVID-19 pandemic. As of September 30, 2021, the allowance for loan losses was 1.41% of total loans, compared with 1.45% at December 31, 2020.

Non-interest income was $923,000 and $2.1 million for the three and nine months ended September 30, 2021, respectively. Non-interest income was $704,000 and $1.5 million for the three and nine months ended September 30, 2020, respectively. The increase in the current quarter was primarily attributable to a gain of $512,000 recognized from the termination of an interest rate swap cash flow hedge in the third quarter of 2021.

Non-interest expense was $5.7 million and $16.4 million for the three and nine months ended September 30, 2021, respectively. Non-interest expense was $6.6 million and $20.9 million for the three and nine months ended September 30, 2020, respectively. The decrease in non-interest expense in the nine months ended September 30, 2021, was primarily driven by an Employee Retention Credit of $2.9 million under the CARES Act and a reduction of $510,000 in regulatory assessments expense.

For the nine months ended September 30, 2021, a provision for income taxes of $1.2 million was recorded, compared to a benefit for income taxes of $811,000 for the nine months ended September 30, 2020.

As of September 30, 2021, shareholders' equity was $66.7 million, compared with $63.2 million at December 31, 2020. Patriot's book value per share rose to $16.89 at September 30, 2021, compared with $16.03 at December 31, 2020.

About the Company:

Patriot 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, Ohio, along with a Rhode Island operations center.

Founded in 1994, and now celebrating its 27th 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. Patriot operates with full-service branches in Connecticut and New York and provides lending products and services nationally. 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 our philosophy as we seek 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 and subject to a variety of risks and uncertainties. These factors include, but are not limited to: (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 and other such factors, including risk factors, as may be described in the Company's other filings with the Securities and Exchange Commission (the "SEC"); (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; and (25) our compensation expense associated with equity allocated or awarded to our employees.

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)


(In thousands)			September 30, 2021			December 31, 2020			September 30, 2020

Assets
Cash and due from banks:
Noninterest bearing deposits and cash			$	5,298		$	3,006		$	3,231
Interest bearing deposits				40,967			31,630			46,405
		Total cash and cash equivalents		46,265			34,636			49,636
Investment securities:
Available-for-sale securities, at fair value				124,103			49,262			47,823
Other investments, at cost				4,450			4,450			4,450
		Total investment securities		128,553			53,712			52,273

Federal Reserve Bank stock, at cost				2,843			2,783			2,783
Federal Home Loan Bank stock, at cost				5,009			4,503			4,503

Gross loans receivable				714,538			730,180			751,298
Allowance for loan losses				(10,079	)		(10,584	)		(11,171	)
	Net loans receivable			704,459			719,596			740,127

SBA loans held for sale				4,128			1,217			6,824
Accrued interest and dividends receivable				6,186			6,620			6,834
Premises and equipment, net				32,638			33,423			33,632
Other real estate owned				-			1,906			1,954
Deferred tax asset, net				10,352			11,496			12,066
Goodwill				1,107			1,107			1,107
Core deposit intangible, net				308			343			567
Other assets				10,498			9,387			10,623
	Total assets		$	952,346		$	880,729		$	922,929

Liabilities
Deposits:
	Noninterest bearing deposits		$	207,941		$	158,676		$	161,871
	Interest bearing deposits			526,732			526,980			565,560
		Total deposits		734,673			685,656			727,431

Federal Home Loan Bank and correspondent bank borrowings				110,000			90,000			90,000
Senior notes, net				11,983			11,927			11,909
Subordinated debt, net				9,803			9,782			9,774
Junior subordinated debt owed to unconsolidated trust, net				8,116			8,110			8,108
Note payable				842			994			1,044
Advances from borrowers for taxes and insurance				2,253			3,786			2,492
Accrued expenses and other liabilities				7,976			7,255			7,634
		Total liabilities		885,646			817,510			858,392

Commitments and Contingencies				-			-			-

Shareholders' equity
Preferred stock				-			-			-
Common stock				106,439			106,329			106,293
Accumulated deficit				(39,393	)		(42,592	)		(41,210	)
Accumulated other comprehensive loss				(346	)		(518	)		(546	)
		Total shareholders' equity		66,700			63,219			64,537

	Total liabilities and shareholders' equity		$	952,346		$	880,729		$	922,929

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

			Three Months Ended								Nine Months Ended
(In thousands, except per share amounts)			September 30, 2021			June 30, 2021		September 30, 2020			September 30, 2021			September 30, 2020

Interest and Dividend Income
	Interest and fees on loans		$	7,189		$	7,267	$	8,578		$	22,199		$	27,722
	Interest on investment securities			692			420		340			1,422			1,134
	Dividends on investment securities			59			57		85			150			313
	Other interest income			20			23		28			67			187
		Total interest and dividend income		7,960			7,767		9,031			23,838			29,356

Interest Expense
	Interest on deposits			448			623		2,028			1,856			8,020
	Interest on Federal Home Loan Bank borrowings			756			741		628			2,230			1,963
	Interest on senior debt			229			228		229			686			686
	Interest on subordinated debt			233			233		235			700			756
	Interest on note payable and other			4			4		5			12			15
		Total interest expense		1,670			1,829		3,125			5,484			11,440

		Net interest income		6,290			5,938		5,906			18,354			17,916

(Credit) provision for loan losses				(300	)		-		85			(300	)		1,799

		Net interest income after (credit) provision for loan losses		6,590			5,938		5,821			18,654			16,117

Non-interest Income
	Loan application, inspection and processing fees			79			61		54			203			147
	Deposit fees and service charges			61			64		73			190			253
	Gains on sale of loans			-			258		380			352			464
	Rental income			130			140		131			400			393
	Gain on sale of investment securities			26			93		-			119			-
	Other income			627			137		66			854			257
		Total non-interest income		923			753		704			2,118			1,514

Non-interest Expense
	Salaries and benefits			2,843			2,447		3,460			7,506			10,966
	Occupancy and equipment expenses			832			778		810			2,530			2,680
	Data processing expenses			376			362		433			1,088			1,194
	Professional and other outside services			633			714		627			2,199			2,137
	Project expenses, net			4			1		6			15			154
	Advertising and promotional expenses			57			77		107			196			377
	Loan administration and processing expenses			23			14		75			61			135
	Regulatory assessments			213			208		355			649			1,159
	Insurance expenses			79			75		67			214			215
	Communications, stationary and supplies			161			144		118			450			371
	Other operating expenses			490			466		560			1,484			1,491
		Total non-interest expense		5,711			5,286		6,618			16,392			20,879

		Income (loss) before income taxes		1,802			1,405		(93	)		4,380			(3,248	)

Provision (benefit) for income taxes				479			383		(6	)		1,181			(811	)
		Net income (loss)	$	1,323		$	1,022	$	(87	)	$	3,199		$	(2,437	)

		Basic earnings (loss) per share	$	0.34		$	0.26	$	(0.02	)	$	0.81		$	(0.62	)
		Diluted earnings (loss) per share	$	0.34		$	0.26	$	(0.02	)	$	0.81		$	(0.62	)

FINANCIAL RATIOS AND OTHER DATA


				Three Months Ended									Nine Months Ended
			(Dollars in thousands)	September 30, 2021			June 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020

Performance Data:

		Net income (loss)		$	1,323		$	1,022		$	(87	)	$	3,199		$	(2,437	)
		Return on Average Assets			0.56	%		0.46	%		-0.04	%		0.47	%		-0.33	%
		Return on Average Equity			7.86	%		6.35	%		-0.53	%		6.56	%		-4.94	%
		Net Interest Margin			2.82	%		2.82	%		2.61	%		2.87	%		2.60	%
		Efficiency Ratio			79.20	%		78.99	%		100.12	%		80.07	%		107.46	%
		% increase (decrease) in loans			6.51	%		-0.85	%		-5.20	%		-2.14	%		-7.49	%
		% (decrease) increase in deposits excluding brokered deposits			-5.44	%		10.96	%		2.29	%		9.82	%		17.94	%

Asset Quality:
		Nonaccrual loans		$	28,046		$	24,524		$	20,440		$	28,046		$	20,440
		Other real estate owned		$	-		$	1,216		$	1,954		$	-		$	1,954
		Total nonperforming assets		$	28,046		$	25,740		$	22,394		$	28,046		$	22,394

		Nonaccrual loans / loans			3.93	%		3.66	%		2.72	%		3.93	%		2.72	%
		Nonperforming assets / assets			2.94	%		2.67	%		2.43	%		2.94	%		2.43	%
		Allowance for loan losses		$	10,079		$	10,362		$	11,171		$	10,079		$	11,171
		Valuation reserve		$	466		$	469		$	492		$	466		$	492
		Allowance for loan losses with valuation reserve		$	10,545		$	10,831		$	11,663		$	10,545		$	11,663

		Allowance for loan losses / loans			1.41	%		1.54	%		1.49	%		1.41	%		1.49	%
		Allowance / nonaccrual loans			35.94	%		42.25	%		54.65	%		35.94	%		54.65	%
		Allowance for loan losses and valuation reserve / loans			1.47	%		1.61	%		1.55	%		1.47	%		1.55	%
		Allowance for loan losses and valuation reserve / nonaccrual loans			37.60	%		44.16	%		57.06	%		37.60	%		57.06	%

		Gross loan charge-offs		$	6		$	80		$	75		$	358		$	810
		Gross loan (recoveries)		$	(23	)	$	(16	)	$	(13	)	$	(153	)	$	(67	)
		Net loan charge-offs		$	(17	)	$	64		$	62		$	205		$	743

Per Share Data and Capital Ratio
		Book value per share ⁽¹⁾		$	16.89		$	16.69		$	16.39		$	16.89		$	16.39
		Tangible book value per share ⁽²⁾		$	16.54		$	16.32		$	15.97		$	16.54		$	15.97
		Tangible book value per share-fully diluted		$	16.41		$	16.18		$	15.86		$	16.41		$	15.86

		Shares outstanding			3,947,976			3,947,276			3,937,041			3,947,976			3,937,041

		Bank Leverage Ratio			9.88	%		10.10	%		9.35	%		9.88	%		9.35	%

			(1) Book value per share represents shareholders' equity divided by outstanding shares.
			(2) Tangible book value per share represents shareholders' equity less intangible assets divided by outstanding shares.

Deposits:
				September 30, 2021			June 30, 2021			December 31, 2020			September 30, 2020
	Non-interest bearing:
	Non-interest bearing			$	114,850		$	135,477		$	99,344		$	102,004
	Prepaid DDA				93,091			82,897			59,332			59,867
		Total non-interest bearing			207,941			218,374			158,676			161,871

	Interest bearing:
	NOW				34,528			36,085			30,529			29,518
	Savings				102,365			99,264			98,635			91,169
	Money market				116,318			123,327			131,378			142,906
	Money market - prepaid deposits				49,353			54,922			15,011			3
	Certificates of deposit, less than $250,000				142,141			152,700			160,968			160,610
	Certificates of deposit, $250,000 or greater				54,991			63,690			49,172			50,359
	Brokered deposits				27,036			12,836			41,287			90,995
		Total Interest bearing			526,732			542,824			526,980			565,560

		Total Deposits		$	734,673		$	761,198		$	685,656		$	727,431

		Total Prepaid deposits		$	142,444		$	137,819		$	74,343		$	59,870

	Total deposits excluding brokered deposits			$	707,637		$	748,362		$	644,369		$	636,436

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 Third Quarter 2021 Net Income of $1.3 Million