- A net loss for the year ended December 31, 2010 declined 36% to $15.4 million, or $1.30 per share, compared to a net loss of $23.9 million, or $5.02 per share, for the year ended December 31, 2009.
- The closing of a $50.4 million recapitalization transaction on October 15, 2010 restored the Bank to a “well-capitalized” status, with Total Capital to Risk Weighted Assets of 17.08% for PNBK and 16.54% for the Bank.
- Nonperforming assets declined for the fifth consecutive quarter by $40.1 million, or 28%, to $105.5 million compared to $145.6 million at September 30, 2009.
- Loans placed on nonaccrual decreased $4.0 million, or 42%, compared to the third quarter of 2010 and decreased $3.8 million, or 41%, as compared to the fourth quarter of 2009.
- Net charge-offs in 2010 were $8.1 million, a decrease of $5.4 million, or 40%, compared to the year ended December 31, 2009.
- Net interest margin improved 84 basis points to 2.91% in 2010 compared to 2.07% in 2009, which resulted in a $3.5 million, or 19%, improvement in net interest income compared to 2009.
- A $2.7 million, or 40%, improvement in pretax quarterly results compared to the third quarter of 2010 and a $3.5 million, or 46% improvement, as compared to the fourth quarter of 2009.
CapitalThe capital ratios at December 31, 2010 for Patriot National Bancorp, Inc. and Patriot National Bank were:
|Patriot NationalBancorp, Inc.||Patriot NationalBank|
|Total Capital (to Risk Weighted Assets)||17.08%||16.54%|
|Tier 1 Capital (to Risk Weighted Assets)||15.69%||15.15%|
|Tier 1 Capital (to Average Assets)||9.16%||8.84%|
Income Statement ReviewOn a per share basis, the net loss was $1.30 for the year ended December 31, 2010 compared to a net loss of $5.02 for the year ended December 31, 2009. The improvement in pretax results compared to the prior year is largely due to an improvement in the net interest margin of $3.5 million during the year and a reduction in the provision for loan losses of $5.4 million. This was partially offset by a decrease in noninterest income of $0.6 million and an increase in noninterest expenses of $1.8 million for the year. For the fourth quarter of 2010 net interest income was $5.1 million as compared to $4.7 million in the fourth quarter a year ago. For the full year, the net interest income increased $3.5 million, or 19%, to $22.1 million for the year as compared to $18.6 million for 2009. The primary driver for the improvement in net interest income is the decrease in the overall cost of funds. The average rate on interest bearing liabilities decreased 101 basis points, or 35%, to 1.87% for the year ended December 31, 2010 from 2.88% for the year ended December 31, 2009. The Company expects to realize further improvement in the cost of funds resulting from rate decreases executed during the fourth quarter of 2010 and the first quarter of 2011. The provision for loan losses for the year was $7.7 million and represents an improvement of $5.4 million, or 41%, compared to the same period last year. This decrease reflects the improvement in the credit quality of the loan portfolio. Noninterest income was $2.4 million for the year, a decrease of $592,000 compared to last year. This decrease is attributable to a gain recorded on the sale of investment securities in 2009; there were no such sales during 2010. Noninterest expenses were $31.9 million in 2010, compared to $30.1 million in 2009. Increased expenses were attributed to carrying costs associated with other real estate owned and higher employee expenses, some of which related to loan workout activities. The increased costs were partially offset by declines in professional and other outside services and regulatory assessments.
Balance Sheet ReviewStrategic balance sheet management resulted in a decrease in total assets to $784.3 million at December 31, 2010, compared with $866.4 million a year earlier. The plan to reduce concentrations in high risk construction and commercial real estate loans resulted in a decrease in the loan portfolio of $110.7 million to $534.5 million at year-end from $645.2 million a year earlier. Primarily as a result of the pending sale of nonperforming loans, the company expects the loan portfolio to decline in the first quarter of 2011 and then begin to grow for the remainder of the year. The loan pipeline as of December 31, 2010 totaled $9.5 million. Total deposits decreased $114.5 million from $761.3 million at December 31, 2009 to $646.8 million at December 31, 2010. Much of the decrease in deposits is the result of the execution of the Company’s strategy to reduce rate sensitive deposits through a series of interest rate reductions resulting in a lower cost of funds and an improvement in spreads. Despite this decrease in deposits, the Company continues to maintain strong levels of liquidity, which have been further augmented by the recent capital infusion. Patriot National Bank is headquartered in Stamford, Connecticut and currently has 19 full service branches, 16 in Connecticut and three in New York. It also has a loan production office in Stamford, CT.
|Financial Highlights (Dollars in thousands, except per share)||Three Months Ended December 31,||Twelve Months Ended December 31,|
|Net interest income||$||5,116||$||4,676||$||22,134||$||18,608|
|Provision for loan losses||1,450||4,080||7,714||13,089|
|Net interest income after provision for loan losses||3,666||596||14,420||5,519|
|Loss before taxes||4,077||7,607||15,174||21,666|
|(Provision) benefit for Income Taxes||-||3,397||(225||)||(2,214||)|
|Basic loss per share||$||0.12||$||0.88||$||1.30||$||5.02|
|Diluted loss per share||$||0.12||$||0.88||$||1.30||$||5.02|
|Average shares outstanding||32,884||4,763||11,851||4,754|
|Net interest margin||2.54||%||2.15||%||2.91||%||2.07||%|
|Loans at period end||$||534,531||$||645,206||$||534,531||$||645,206|
|Deposits at period end||646,809||761,334||646,809||761,334|
|Assets at period end||784,325||866,417||784,325||866,417|
|Book Value per Share (1)||$||1.75||$||7.77||$||1.75||$||7.77|
|Tangible Book Value per share (2)||$||1.75||$||7.75||$||1.75||$||7.75|
|(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.|