The quarter ended June 30, 2010 is the third consecutive quarter during which total nonperforming assets declined. Nonperforming assets which consist of non-accrual loans and other real estate owned (“OREO”) were $110.6 million at June 30, 2010 as compared to $145.6 million at September 30, 2009; this represents an improvement of $35.0 million or 24% over the nine month period. This decrease supports Management’s opinion, stated in the 2009 earnings release, that nonperforming assets peaked during the third quarter of 2009. The $110.6 million of nonperforming assets is comprised of $6.7 million of OREO properties and $103.9 million of non-accrual loans. Of the $103.9 million in non-accrual loans, $31.3 million or 30% of non-accrual loans consisting of 25 notes are under 30 days past due as to payments. The $6.7 million in OREO consists of three properties none of which have been in OREO greater than one year. During the six month period ended June 30, 2010, OREO declined by $12.3 million or 65% reflecting the disposition of six properties on which the Company recorded net losses of $173,000 or approximately 1% at the time of sale.
The quarter ended June 30, 2010 is also the fifth consecutive quarter during which the level of loans placed on nonaccrual declined demonstrating a consistent improvement in the risk profile of the portfolio. Additions to nonaccrual loans during each of the previous five quarters were: June 30, 2010 - $3.3 million, March 31, 2010 - $4.0 million, December 31, 2009 - $9.3 million, September 30, 2009 - $26.2 million and June 30, 2009 - $54.8 million.
Mr. Charles F. Howell, President and Chief Executive Officer of Patriot National Bank stated that he is encouraged by the improvements described above, as well as by continuing increases in the median sales prices and the volume of single family residences sold in Fairfield County, Connecticut and Westchester County, New York, two of the primary lending areas of the Bank. He further stated that these are hopeful signs that confirm management’s belief that negative conditions “bottomed out” in mid-2009 and there are indications that prospects for a recovery remain favorable.