Patriot National Bancorp Files Q2 2024 10-Q

TL;DR

PNBK 10-Q filed for Q2 2024 - check financials.

AI Summary

Patriot National Bancorp Inc. filed its 10-Q for the period ending June 30, 2024. The filing details the company's financial performance and position, including its assets, liabilities, and equity. Specific financial figures and operational details for the second quarter of 2024 are presented.

Why It Matters

This filing provides investors and analysts with a detailed look at Patriot National Bancorp's financial health and operational performance during the second quarter of 2024, influencing investment decisions.

Risk Assessment

Risk Level: medium — As a financial institution, Patriot National Bancorp is subject to various market and regulatory risks inherent in the banking sector.

Key Numbers

• Q2 2024 — Reporting Period (Financial performance for the second quarter of 2024 is detailed.)
• 12/31 — Fiscal Year End (Indicates the end of the company's fiscal year.)

Key Players & Entities

• PATRIOT NATIONAL BANCORP INC (company) — Filer
• 20240630 (date) — Period of Report
• 20240809 (date) — Filing Date
• 0001098146 (company) — Central Index Key

FAQ

Filing Documents

• pnbk-20240630.htm (10-Q) — 3566KB
• a2024-06pnbk10xq_exx311.htm (EX-31.1) — 12KB
• a2024-06pnbk10xq_exx312.htm (EX-31.2) — 13KB
• a2024-06pnbk10xq_exx32.htm (EX-32) — 10KB
• 0001628280-24-036436.txt ( ) — 17004KB
• pnbk-20240630.xsd (EX-101.SCH) — 56KB
• pnbk-20240630_cal.xml (EX-101.CAL) — 127KB
• pnbk-20240630_def.xml (EX-101.DEF) — 352KB
• pnbk-20240630_lab.xml (EX-101.LAB) — 726KB
• pnbk-20240630_pre.xml (EX-101.PRE) — 543KB
• pnbk-20240630_htm.xml (XML) — 4599KB

- 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 (Unaudited) 5 Consolidated Statements of Shareholder's Equity (Unaudited) 6 Consolidated Statements of Cash Flows (Unaudited) 8

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 10

: 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 43

: Quantitative and Qualitative Disclosures about Market Risk

Item 3: Quantitative and Qualitative Disclosures about Market Risk 58

: Disclosure Controls and Procedures

Item 4: Disclosure Controls and Procedures 59

- OTHER INFORMATION

PART II - OTHER INFORMATION 61

: Legal Proceedings

Item 1: Legal Proceedings 61

: Other Information

Item 5: Other Information 61

: Exhibits

Item 6: Exhibits 62

- FINANCIAL INFORMATION

PART I- FINANCIAL INFORMATION

: Consolidated Financial Statements

Item 1: Consolidated Financial Statements PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 2024 December 31, 2023 (In thousands, except share data) Unaudited Assets Cash and due from banks: Noninterest bearing deposits and cash $ 2,514 $ 2,195 Interest bearing deposits 91,097 50,322 Restricted cash 41 14,019 Total cash, cash equivalents and restricted cash 93,652 66,536 Investment securities: Available-for-sale securities, at fair value 86,667 89,187 Other investments, at cost 4,450 4,450 Total investment securities 91,117 93,637 Federal Reserve Bank (FRB) stock, at cost 2,193 2,090 Federal Home Loan Bank (FHLB) stock, at cost 3,571 4,202 Loans receivable (net of allowance for credit losses: 2024: $( 14,989 ) and 2023: $( 15,925 )) 761,313 832,934 Loans held for sale 14,092 20,767 Accrued interest and dividends receivable 6,452 7,219 Premises and equipment, net 29,338 29,875 Other real estate owned 2,843 2,843 Deferred tax asset 25,104 24,134 Core deposit intangible, net 179 203 Other assets 9,158 8,985 Total assets $ 1,039,012 $ 1,093,425 Liabilities Deposits: Noninterest bearing deposits $ 93,736 $ 110,056 Interest bearing deposits 707,166 730,255 Total deposits 800,902 840,311 FHLB, FRB and correspondent bank borrowings 156,900 171,000 Senior notes, net 11,792 11,723 Subordinated debt, net 9,883 9,869 Junior subordinated debt owed to unconsolidated trust, net 8,142 8,137 Note payable 270 376 Advances from borrowers for taxes and insurance 2,768 1,164 Accrued expenses and other liabilities 7,828 6,462 Total liabilities 998,485 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 June 30, 2024: 4,049,814 shares issued; 3,976,073 shares outstanding; As of December 31, 2023: 4,049,814 shares issued; 3,976,073 s

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 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 the Company's consolidated

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 June 30, 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) June 30, 2024: U. S. Government agency and mortgage-backed securities $ 4,236 $ ( 132 ) $ 60,051 $ ( 15,435 ) $ 64,287 $ ( 15,567 ) Corporate bonds — — 13,883 ( 4,113 ) 13,883 ( 4,113 ) Subordinated notes — — 4,327 ( 673 ) 4,327 ( 673 ) SBA loan pools — — 3,703 ( 1,030 ) 3,703 ( 1,030 ) Municipal bonds — — 467 ( 91 ) 467 ( 91 ) Total available-for-sale securities $ 4,236 $ ( 132 ) $ 82,431 $ ( 21,342 ) $ 86,667 $ ( 21,474 ) 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 June 30, 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 ( 19.9 )% and ( 19.0 )% from the amortized cost of those securities, respectively. At June 30, 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 securit

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) As of June 30, 2024 and December 31, 2023, available-for-sale securities of $ 63.9 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 June 30, 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 June 30, 2024: Corporate bonds $ 2,000 $ 15,996 $ — $ 17,996 $ 1,957 $ 11,926 $ — $ 13,883 Subordinated notes 3,000 2,000 — 5,000 2,550 1,777 — 4,327 SBA loan pools — — 4,733 4,733 — — 3,703 3,703 Municipal bonds 153 405 — 558 136 331 — 467 Available-for-sale securities with stated maturity dates 5,153 18,401 4,733 28,287 4,643 14,034 3,703 22,380 U. S. Government agency and mortgage-backed securities — 5,184 74,670 79,854 — 4,109 60,178 64,287 Total available-for-sale securities $ 5,153 $ 23,585 $ 79,403 $ 108,141 $ 4,643 $ 18,143 $ 63,881 $ 86,667 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

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