Patriot National Bancorp Inc. indicated it is nearer to turning the corner to profitability ”“ but continues to see its deposit levels drop even as banks statewide increase both loans and deposits.
Patriot National lost $9 million in the first quarter as the Stamford-based bank chips away at a pile of bad real estate loans underwritten leading up to the recession, before its current ownership group acquired a controlling stake last October. This past March, Patriot National announced an agreement to close four branches in Greenwich, Fairfield, Stratford and Wilton, while selling $61 million in non-performing loans and real estate to an entity ES Ventures One L.L.C.
A Patriot subsidiary called Pinpat Acquisition Corp. has since detailed some of those transactions in local real estate filings, transferring multimillion-dollar mortgages in Greenwich and other communities.
No address is listed for ES Ventures One. In the purchase agreement between it and Patriot National, Southport-based Summit Development L.L.C. and an affiliate of New York City-based Elliott Management Corp. are listed as approved to receive correspondence on ES Ventures”™ behalf.
Summit CEO Felix Charney did not immediately provide details on the extent of any involvement by his company in the Patriot National transaction with ES Ventures.
Patriot National is less than a year into new ownership under Michael Carrazza”™s leadership, who put together a $50 million equity investment in the company last year. The bank brought in former Dime Savings executive Christopher Mahar as CEO; at press deadline he had yet to return a call for comment on Patriot National”™s results.
In a prepared statement released in May, Carrazza noted Patriot National completed recorded a $6.2 million loss on the bulk sale of non-performing assets during the first quarter, reducing its loan balances classified in non-accrual status to “acceptable” levels in his words.
The bank also continues to see a sharp drop in deposits, which it said is part of a strategy to reduce rate-sensitive deposits through a series of interest-rate reductions, resulting in a lower cost of funds and improved spreads. Deposits dropped more than 10 percent from the fourth quarter to $581 million, even as deposits climbed 1.5 percent at all 54 Connecticut banks tracked by the Federal Deposit Insurance Corp.
At banks statewide, loans classified as nonperforming dropped to 2.8 percent of all loans outstanding, down from nearly 3 percent in the fourth quarter. For its part, Patriot National said non-performing loans totaled 6.8 percent of all loans it had on the books ”“ a major improvement from the 16.2 percent figure it reported at the end of last year.
“We continue to make strong progress in reducing non-performing assets, while rapidly disposing of real estate that we have acquired through foreclosure,” Maher stated in written comments. “Total non-performing assets were down 68 percent from the prior quarter and 74 percent below the same quarter last year.”
The company is also overhauling some of its information systems ”“ this month Glastonbury-based Open Solutions said Patriot National had bought its DNA software, which is designed to give financial institution employees better details of customer information, including business and personal accounts, messages and notes.
