Despite the lingering effects of the current economic environment, actual losses on loans paid-off remain low. For the quarter ended March 31, 2010, loan payoffs totaled $29.7 million on which Bancorp incurred approximately $189,000 or 0.64% in actual realized losses as compared to the loan loss allowance coverage ratio of 2.35% to total loans at March 31, 2010. The Bank’s conservative underwriting standards and low loan-to-value ratios at loan origination have mitigated loan losses at the time the loans are paid off.Net interest income increased to $6.0 million for the three months ended March 31, 2010 as compared to $4.7 million for the three months ended December 31, 2009 and $5.5 million for the three months ended March 31, 2009. The improvement in net interest income is primarily the result of an improvement in the overall cost of funds; interest expense on deposits declined 29% when compared to the fourth quarter of 2009 and declined 50% when compared to the same period last year. The net interest margin for the first quarter of 2010 was 3.10%; however, after adjusting for the recovery in the first quarter of delinquent interest on a nonaccrual loan, the net interest margin would have been 2.79% representing a 61 basis point increase when compared to the fourth quarter of 2009, and a 34 basis point improvement when compared to the same period last year. The provision for loan losses of $727,000 recorded for the first quarter of 2010 represents a decrease of $3.3 million when compared to the fourth quarter of 2009 and a decrease of $873,000 as compared to the same period last year. Loans, net decreased $160.2 million or 20% as compared to March 31, 2009. This decrease in the loan portfolio combined with the downward trend in nonperforming assets contributed to the improvement in the provision. Loan charge-offs, net of recoveries for the first quarter of 2010 were $1.5 million as compared to $5.9 million for the fourth quarter of 2009 and $1.2 million for the first quarter of 2009.
Mr. Charles F. Howell, President and Chief Executive Officer of Patriot National Bank stated that he is encouraged by these improvements as well as by increases over the last six month in the median sales prices and the volume of single family residences sold in Fairfield County, Connecticut, one of the primary lending areas of the Bank. He further stated that these are hopeful signs that negative conditions have bottomed out and indications are there that a recovery is on the horizon.Noninterest income of $538,000 for the three months ended March 31, 2010 represents a decrease of $484,000 when compared to the same period last year. The results for last year include gains on the sales of investment securities of $434,000; there were no investment sales during the first quarter of 2010. Noninterest expenses of $8.7 million are $116,000 less than noninterest expenses for the fourth quarter of 2009, but $2.4 million higher than those recorded in the first quarter of 2009. Noninterest expenses reflect higher professional, operations and insurance expenses associated with the level of nonperforming assets. Noninterest expenses for the three months ended March 31, 2010 include expenses associated with other real estate operations of $979,000; there were no other real estate operations expenses during the first quarter of 2009. Noninterest expenses for the current quarter reflect an increase in regulatory assessments of $415,000 as compared to the same period in 2009. This increase is due primarily to higher FDIC deposit insurance premium assessments. Total assets decreased $51.7 million from $866.4 million at December 31, 2009 to $814.7 million at March 31, 2010. Total loans decreased $20.3 million from $645.2 million at December 31, 2009 to $624.9 million at March 31, 2010. These decreases reflect the Bank’s strategic decision to improve the risk profile of its loan portfolio by reducing its construction and commercial real estate loan concentrations. Total deposits decreased $49.5 million from $761.3 million at December 31, 2009 to $711.8 million at March 31, 2010. Much of the decrease in deposits can be attributed to Bancorp’s strategy to reduce higher cost of funds and to improve spreads.
Bancorp’s Capital Ratios at March 31, 2010 remain relatively stable as compared to December 31, 2009:
|March 31, 2010||December 31, 2009|
|Total Risk Based Capital||8.45%||8.58%|
|Tier 1 Risk Based Capital||7.07%||7.22%|
|Tier 1 Leverage||4.78%||4.72%|
Patriot National Bank is headquartered in Stamford, Connecticut and currently has 19 full service branches, 16 in Connecticut and three in New York. It also has a loan production office in Stamford, CT.
|Three MonthsEndedMar. 31, 2010||Three MonthsEndedDec. 31, 2009||Three MonthsEndedMar. 31, 2009|
|Net interest income||$6,009||$4,676||$5,528|
|Provision for loan losses||727||4,080||1,600|
|Loss before taxes||2,907||7,607||1,355|
|Loans at period end||624,942||645,206||785,103|
|Deposits at period end||711,841||761,334||843,945|
|Assets at period end||814,729||866,417||970,459|
|Loss per share||0.66||0.88||0.23|