Patriot National Bancorp Inc. lost $7.2 million in the second quarter amid plunging deposits, but said it remains on track on a six-month turnaround plan to profitability.
During the quarter, the bank closed four Fairfield County branches and saw deposits drop more than 10 percent to $521 million.
Loans classified as non-performing decreased to $26.7 million, or 5.8 percent of total loans, down from $32.5 million or 6.8 percent three months earlier. Patriot National recorded a $1.5 million loan-loss provision in the second quarter, down from $7 million in the preceding quarter. The bank said the provision relates primarily to two loans and doesn”™t represent continued deterioration in the overall portfolio.
“The broad scope of our turnaround plan led to substantial improvements in management, credit quality and the net interest margin, and will lead to a reduction in operating expenses,” said Michael Carrazza, Patriot National”™s chairman and controlling investor, in a prepared statement. “The combination of improvements in business operations, tighter liquidity control and a shift back to loan growth is resulting in higher net interest margin and increased profitability.”
That loan growth did not occur in Patriot National”™s small-business portfolio, according to the Federal Deposit Insurance Corp., with those loans down by $1.6 million in the second quarter to give it $58.3 million across about 350 loans in its small-business portfolio.
