Patriot National Bancorp, Inc. Files Q1 2024 10-Q Report

TL;DR

<b>Patriot National Bancorp, Inc. has filed its Q1 2024 10-Q report.</b>

AI Summary

PATRIOT NATIONAL BANCORP INC (PNBK) filed a Quarterly Report (10-Q) with the SEC on May 15, 2024. Filed 10-Q for the period ending March 31, 2024. Company is PATRIOT NATIONAL BANCORP INC. SEC file number is 000-29599. Incorporated in CT, fiscal year ends 12/31. Business address is 900 BEDFORD ST, STAMFORD, CT 06901.

Why It Matters

For investors and stakeholders tracking PATRIOT NATIONAL BANCORP INC, this filing contains several important signals. This filing provides an update on the company's financial performance and position for the first quarter of 2024. Investors and analysts can use this report to assess the bank's current financial health and strategic direction.

Risk Assessment

Risk Level: low — PATRIOT NATIONAL BANCORP INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate red flags or significant new disclosures that would indicate high risk.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-Q to understand Patriot National Bancorp's performance and any potential challenges.

Key Numbers

• 2024-03-31 — Report Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-05-15 — Filing Date (FILED AS OF DATE)
• 12/31 — Fiscal Year End (FISCAL YEAR END)

Key Players & Entities

• PATRIOT NATIONAL BANCORP INC (company) — FILER
• 0001098146 (company) — CENTRAL INDEX KEY
• CT (location) — STATE OF INCORPORATION
• 2033247500 (phone) — BUSINESS PHONE
• PNBK (ticker) — Ticker Symbol

FAQ

Industry Context

Patriot National Bancorp, Inc. operates within the National Commercial Banks industry (SIC 6021).

Regulatory Implications

The filing is a standard 10-Q report under the Securities Exchange Act of 1934, requiring regular financial disclosures from public companies.

What Investors Should Do

1. Analyze the balance sheet and income statement for Q1 2024.
2. Review any disclosed risk factors for potential impacts on the company.
3. Compare key financial metrics to previous periods and industry benchmarks.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-15: Filing Date — Date the 10-Q report was officially filed with the SEC.

Year-Over-Year Comparison

This is the Q1 2024 10-Q filing, following the previous 10-K annual report and prior quarterly filings.

Filing Documents

• pnbk-20240331.htm (10-Q) — 3140KB
• a2024-03pnbk10xq_exx311.htm (EX-31.1) — 12KB
• a2024-03pnbk10xq_exx312.htm (EX-31.2) — 13KB
• a2024-03pnbk10xq_exx32.htm (EX-32) — 10KB
• 0001628280-24-023615.txt (&nbsp;) — 15599KB
• pnbk-20240331.xsd (EX-101.SCH) — 55KB
• pnbk-20240331_cal.xml (EX-101.CAL) — 117KB
• pnbk-20240331_def.xml (EX-101.DEF) — 337KB
• pnbk-20240331_lab.xml (EX-101.LAB) — 710KB
• pnbk-20240331_pre.xml (EX-101.PRE) — 527KB
• pnbk-20240331_htm.xml (XML) — 4207KB

- FINANCIAL INFORMATION

PART I- FINANCIAL INFORMATION 3

: Consolidated Financial Statements

Item 1: Consolidated Financial Statements 3 Consolidated Balance Sheets (Unaudited) 3 Consolidated Statements of Operations (Unaudited) 4 Consolidated Statements of Comprehensive (Loss) Income (Unaudited) 5 Consolidated Statements of Shareholder's Equity (Unaudited) 6 Consolidated Statements of Cash Flows (Unaudited) 7

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 9

: Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 41

: Quantitative and Qualitative Disclosures about Market Risk

Item 3: Quantitative and Qualitative Disclosures about Market Risk 55

: Disclosure Controls and Procedures

Item 4: Disclosure Controls and Procedures 56

- OTHER INFORMATION

PART II - OTHER INFORMATION 58

: Legal Proceedings

Item 1: Legal Proceedings 58

: Other Information

Item 5: Other Information 58

: Exhibits

Item 6: Exhibits 59

- FINANCIAL INFORMATION

PART I- FINANCIAL INFORMATION

: Consolidated Financial Statements

Item 1: Consolidated Financial Statements PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, 2024 December 31, 2023 (In thousands, except share data) Unaudited Assets Cash and due from banks: Noninterest bearing deposits and cash $ 2,409 $ 2,195 Interest bearing deposits 61,580 50,322 Restricted cash 28,786 14,019 Total cash, cash equivalents and restricted cash 92,775 66,536 Investment securities: Available-for-sale securities, at fair value 87,595 89,187 Other investments, at cost 4,450 4,450 Total investment securities 92,045 93,637 Federal Reserve Bank (FRB) stock, at cost 2,200 2,090 Federal Home Loan Bank (FHLB) stock, at cost 2,652 4,202 Loans receivable (net of allowance for credit losses: 2024: $( 13,777 ) and 2023: $( 15,925 )) 796,546 832,934 Loans held for sale 14,112 20,767 Accrued interest and dividends receivable 6,610 7,219 Premises and equipment, net 29,634 29,875 Other real estate owned 2,843 2,843 Deferred tax asset 24,199 24,134 Core deposit intangible, net 191 203 Other assets 9,372 8,985 Total assets $ 1,073,179 $ 1,093,425 Liabilities Deposits: Noninterest bearing deposits $ 109,265 $ 110,056 Interest bearing deposits 750,459 730,255 Total deposits 859,724 840,311 FHLB, FRB and correspondent bank borrowings 131,000 171,000 Senior notes, net 11,757 11,723 Subordinated debt, net 9,876 9,869 Junior subordinated debt owed to unconsolidated trust, net 8,139 8,137 Note payable 323 376 Advances from borrowers for taxes and insurance 2,772 1,164 Accrued expenses and other liabilities 5,951 6,462 Total liabilities 1,029,542 1,049,042 Commitments and Contingencies Shareholders' equity Preferred stock, no par value; 1,000,000 shares authorized, no shares issued and outstanding — — Common stock, $ .01 par value, 100,000,000 shares authorized; As of March 31, 2024: 4,049,814 shares issued; 3,976,073 shares outstanding; As of December 31, 2023: 4,049,814 shares issued; 3,

Notes to consolidated financial statements (Unaudited)

Notes to consolidated financial statements (Unaudited) Note 1. Basis of Financial Statement Presentation The accompanying unaudited interim condensed Consolidated Financial Statements of Patriot National Bancorp, Inc. (the "Company" or "PNBK") and its wholly-owned subsidiaries, Patriot Bank, N.A. (the "Bank"), Patriot National Statutory Trust I and PinPat Acquisition Corporation (collectively, "Patriot"), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been omitted. The accompanying unaudited interim condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included on the Annual Report on Form 10-K for the year ended December 31, 2023. The Consolidated Balance Sheet at December 31, 2023 presented herein has been derived from the audited Consolidated Financial Statements of the Company at that date, but does not include all of the information and footnotes required by US GAAP for complete financial statements. The preparation of consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates. Management has identified accounting for the allowance for credit losses, the analysis and valuation of its investment securities, the valuation of deferred tax assets, the impairment of goodwill, the valuation of derivatives, and the valuation of servicing assets as certain of the Company's more significant accounting policies and estimates, in that they are critical to the presentation of

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) ASU 2023-07 In November, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Additionally, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and define other disclosure requirements. A public entity must apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this standard is not expected to have an impact on the Company's financial condition or results of operations but could change certain disclosures. ASU 2023-09 In December 2023, the FASB issued ASU 202309 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires more detailed disclosures of income taxes paid net of refunds received, income from continuing operations before income tax expense or benefit, and income tax expense from continuing operations. This standard is to be applied on a prospective basis, with retrospective application permitted, and will be effective for the Company for annual periods beginning on January 1, 2025. We do not expect adoption of this standard to have a material impact on the Company's Consolidated Financial Statements but will likely result in additional disclosures. Note 3. Available

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) The following table presents the available-for-sale securities' gross unrealized losses and fair value, aggregated by the length of time the individual securities have been in a continuous loss position as of March 31, 2024 and December 31, 2023: (In thousands) Less than 12 Months 12 Months or More Total Fair Value Unrealized (Loss) Fair Value Unrealized (Loss) Fair Value Unrealized (Loss) March 31, 2024: U. S. Government agency and mortgage-backed securities $ 7,584 $ ( 161 ) $ 57,896 $ ( 15,112 ) $ 65,480 $ ( 15,273 ) Corporate bonds — — 13,689 ( 4,306 ) 13,689 ( 4,306 ) Subordinated notes — — 4,245 ( 755 ) 4,245 ( 755 ) SBA loan pools — — 3,703 ( 1,030 ) 3,703 ( 1,030 ) Municipal bonds — — 478 ( 81 ) 478 ( 81 ) Total available-for-sale securities $ 7,584 $ ( 161 ) $ 80,011 $ ( 21,284 ) $ 87,595 $ ( 21,445 ) December 31, 2023: U. S. Government agency and mortgage-backed securities $ 9,984 $ ( 286 ) $ 55,687 $ ( 14,543 ) $ 65,671 $ ( 14,829 ) Corporate bonds — — 13,766 ( 4,229 ) 13,766 ( 4,229 ) Subordinated notes — — 4,227 ( 773 ) 4,227 ( 773 ) SBA loan pools — — 5,037 ( 965 ) 5,037 ( 965 ) Municipal bonds — — 486 ( 73 ) 486 ( 73 ) Total available-for-sale securities $ 9,984 $ ( 286 ) $ 79,203 $ ( 20,583 ) $ 89,187 $ ( 20,869 ) As of March 31, 2024 and December 31, 2023, forty-nine of forty-nine and fifty of fifty available-for-sale securities had unrealized losses with an aggregate decline of ( 19.7 )% and ( 19.0 )% from the amortized cost of those securities, respectively. At March 31, 2024, no allowance for credit losses has been recognized on available for sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company's analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available for sale debt securities. The issuers of these debt sec

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) As of March 31, 2024 and December 31, 2023, available-for-sale securities of $ 65.0 million and $ 68.5 million, respectively, were pledged to the Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB"). The securities were pledged primarily to secure borrowings from the FHLB and FRB. The following summarizes, by class and contractual maturity, the amortized cost and estimated fair value of available-for-sale debt securities held as of March 31, 2024 and December 31, 2023. The mortgages underlying the mortgage-backed securities are not due at a single maturity date. Additionally, these mortgages often are and generally may be pre-paid without penalty, creating a degree of uncertainty that such investments can be held until maturity. For convenience, mortgage-backed securities have been included in the summary as a separate line item. (In thousands) Amortized Cost Fair Value Due Within 5 years Due After 5 years through 10 years Due After 10 years Total Due Within 5 years Due After 5 years through 10 years Due After 10 years Total March 31, 2024: Corporate bonds $ 2,000 $ 15,995 $ — $ 17,995 $ 1,937 $ 11,752 $ — $ 13,689 Subordinated notes 3,000 2,000 — 5,000 2,535 1,710 — 4,245 SBA loan pools — — 4,733 4,733 — — 3,703 3,703 Municipal bonds 153 406 — 559 137 341 — 478 Available-for-sale securities with stated maturity dates 5,153 18,401 4,733 28,287 4,609 13,803 3,703 22,115 U. S. Government agency and mortgage-backed securities — 5,215 75,538 80,753 — 4,136 61,344 65,480 Total available-for-sale securities $ 5,153 $ 23,616 $ 80,271 $ 109,040 $ 4,609 $ 17,939 $ 65,047 $ 87,595 December 31, 2023: Corporate bonds $ 2,000 $ 15,995 $ — $ 17,995 $ 1,947 $ 11,819 $ — $ 13,766 Subordinated notes 3,000 2,000 — 5,000 2,527 1,700 — 4,227 SBA loan pools — 1,096 4,906 6,002 — 1,084 3,953 5,037 Municipal bonds 153 406 — 559 140 346 — 486 Available-for-sale securities with stated matur

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 4. Loans Receivable and Allowance for Credit Losses As of March 31, 2024 and December 31, 2023, loans receivable, net, consisted of the following: (In thousands) March 31, 2024 December 31, 2023 Loan portfolio segment: Commercial Real Estate $ 462,547 $ 472,093 Residential Real Estate 102,881 106,783 Commercial and Industrial 148,420 163,565 Consumer and Other 89,772 99,688 Construction 4,239 4,266 Construction to Permanent - CRE 2,464 2,464 Loans receivable, gross 810,323 848,859 Allowance for loan and lease losses ( 13,777 ) ( 15,925 ) Loans receivable, net $ 796,546 $ 832,934 Patriot's lending activities are conducted principally in Fairfield and New Haven Counties in Connecticut and Westchester County in New York, and the five Boroughs of New York City. Patriot originates commercial real estate loans, commercial business loans, a variety of consumer loans, and construction loans, and has purchased residential loans since 2016. All commercial and residential real estate loans are collateralized primarily by first or second mortgages on real estate. The ability and willingness of borrowers to satisfy their loan obligations is dependent to some degree on the status of the regional economy as well as upon the regional real estate market. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio and the recovery of a substantial portion of any resulting real estate acquired is susceptible to changes in market conditions. Patriot has established credit poli

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