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Stamford-based Patriot Bank saw third quarter earnings increase by 75 percent year-over-year as the bank has seen its loan portfolio grow nearly 17 percent in 2022.
Patriot Bank had third quarter net income of $2.3 million, or $0.59 basic and diluted earnings per share, compared to net income of $1.3 million, or $0.34 basic and diluted earnings per share, in the third quarter of 2021. Net income for the second quarter 2022 was $1.3 million, or $0.32 per basic and diluted earnings per share.
A merger between the bank’s parent company, Patriot National Bancorp, and Stamford-based American Challenger Development Corp. was called off early in the third quarter. While Patriot National Bancorp had said in its second quarter earnings statement that the companies remained in active discussions about possibly modifying the transaction, the bank made no mention of American Challenger in the third quarter earnings statement released on Thursday.
The bank did say that it has lower effective tax rates in 2022 because the tax treatment of merger-related expenses in 2021 were deemed deductible in the third quarter, when the merger agreement was terminated. The bank’s effective tax rate was 6.3 percent for the third quarter and 17.6 percent year-to-date compared to 26.5 percent and 26.9 percent, respectively, in 2021.
Patriot Bank continues to see growth in the prepaid debit card program it acquired two years ago. The bank said the portfolio has grown from $50 million in July 2020 to $169.1 million on Sept. 30. The bank said it expects the prepaid portfolio’s growth to help contribute to the bank’s funding strategy and improve its net interest margin and overall funding costs.
The bank’s third quarter net interest income was $9.2 million, up $2.9 million from the same quarter last year. Year-to-date, net interest income was $23.7 million, a 29.1 percent increased compared to the first nine months of 2021. The bank attributed the increases primarily to growth in the loan portfolio.
The net interest margin increased to 3.68 percent for the third quarter and 3.35 percent year-to-date compared to 2.82 percent in the third quarter last year and 2.87 percent in the first nine months of 2021.
Patriot Bank’s total assets were $1.1 billion as of Sept. 30 compared to $948.5 million on Dec. 31. The bank’s net loans increased from $729.6 million on Dec. 31 to $852.9 million on Sept. 30. Total deposits at the end of the third quarter were $834.4 million, up from $748.6 million at the end of 2021.
“We are very pleased with the results for the quarter which reflect continued strong growth in our balance sheet and continued improvement in our asset quality even in the current economic conditions,” Patriot President and CEO Robert Russell said in the earnings statement. “Net interest margin expanded to 3.68 percent in the quarter while return on average equity, fueled in part by tax benefits related to the terminated transaction, was 15 percent for the quarter. …The Bank continues to navigate the ever-changing interest rate landscape and remains well positioned for continued growth and improvement.”
