Efforts yield significant 26% earnings climb, while assets increase to $826 million. CEO says, “We can do even better!”

STAMFORD, Conn., Oct. 31, 2017 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. (“Patriot”, “Bancorp”) (NASDAQ:PNBK), the parent company of Patriot Bank, N.A. (the “Bank”), today announced another milestone achievement with quarterly pre-tax earnings of $1.7 million and quarterly net income exceeding $1.0 million, or $0.26 per fully diluted share.

The $1 million net income compares to net income of $804 thousand, $0.21 per fully diluted share, in the second quarter of 2017 and $814 thousand, $0.21 per share, for the same quarter a year ago. For the nine months ended September 30, 2017 net income was $3.5 million, or $0.91 per diluted share, compared with $885 thousand, or $0.22 per fully diluted share, for the corresponding 2016 period.

Patriot Bank’s deposits continued to rise and are now up 28% year-over-year, with loan growth of 5% for the quarter and 27% from the year prior, fueling a strong growth in net interest income. Net interest income climbed 23% from the corresponding 2016 period and for 2017 is 14% higher than in the nine-month period ending September 30, 2016.

In addition to the announcement of quarterly earnings, Patriot also announced today the declaration of its second consecutive quarterly dividend of $0.01 per fully diluted share. The record date for this quarterly dividend will be October 29, 2017, with a dividend payment date of November 10, 2017. 

CEO Michael Carrazza stated: “This quarter’s milestone is further confirmation of the steady progress we expect to achieve from the operational disciplines put in place and management’s focus on growth and value accretion. While pleased in reaching these milestones, content we are not. Internal mandates have been set to materially beat third quarter performance and further enhance key operating metrics in the fourth quarter. The expected closing of our acquisition of Prime Bank will further add to our earnings momentum.”

Announced last week, Prime Bank shareholders voted in favor of its merger with Patriot. As of June 30, 2017, Prime had approximately $73 million in total assets, $56 million in deposits and $28 million in total loans. Closing is pending receipt of regulatory approvals, which is targeted before year-end.

Richard Muskus, Patriot’s President added, “We have created greater capacity to build a high quality loan portfolio, achieve critical mass in attractive product lines and enhance service offerings to our customers. These are the primary areas of focus and will continue to add to our profitability and franchise value.”

The comparative results for the first nine months of 2016 and 2017 include the impact of a troubled loan that was ultimately resolved. In the second quarter of 2016, the Bank recorded a significant loan loss provision, but aggressively worked towards a recovery, which was successfully accomplished in the first quarter of 2017.

Excluding the impact of the loan loss provision, which primarily consisted of losses and recoveries related to this loan, net income for the nine-month period ending September 30, 2017 was 30% higher than the same period in 2016. These results are the by-product of aggressive value-enhancing strategies that have been underway over the past year.

The strong earnings performance is attributable to significant loan growth, while operating expenses have remained under tight control.

In the year since September 30, 2016, total assets increased by $144 million (21%), up from $682 million. Loans totaled $710 million as of September 30, 2017, up 5% from the $679 million reported June 30, 2017, and up 27% from the $560 million reported September 30, 2016. 

Deposits increased during the quarter to $605 million and were up 28% year-over-year as compared with $471 million at the end of the third quarter of 2016. Deposit growth remains a key initiative to keep pace with Patriot’s overall growth prospects.

Net interest income was $7.1 million in the quarter, up 12% from the second quarter 2017 and up 23% from the corresponding 2016 period. Net interest income of $18.9 million in the year-to-date period was 14% higher than the $16.5 million in the nine month period ending September 30, 2016. Net interest margin was 3.65% for the quarter and 3.59% for the 2017 year-to-date period, as compared to 3.61 % in the prior quarter and 3.79% in the first nine months of 2016.

The provision for loan losses in the quarter was $545 thousand, reflecting the growth in loans with overall credit quality remaining strong. The year-to-date credit in the provision of $944 thousand reflects the previously noted recovery. The provision for loan losses was $355 thousand in the third quarter of 2016 and $2.3 million for the nine months ended September 30, 2016.

Non-interest income was $386 thousand in the quarter, 10% higher than the prior quarter. Year-to-date non-interest income of $1 million was 15% lower than the prior year, primarily due to the loss on security sales of $78 thousand recognized in the first quarter, as the portfolio was intentionally re-positioned to provide future enhancements to profitability.

Non-interest expense increased 4%, over the prior quarter and year-to-date non-interest expenses increased 7% over the same period in 2016. 

As of September 30, 2017 shareholders’ equity was $66.3 million, an increase of $3.7 million from a year ago. The Company’s book value per share increased to $17.02 at September 30, 2017 as compared to $15.80 a year ago.

The Bank’s capital ratios continue to be strong, as the Bank maintained its “well capitalized” regulatory status. As of September 30, 2017, Tier 1 leverage ratio was 9.57%, Tier 1 risk based capital was 10.69% and total risk based capital was 11.55%. 

About the Company
Patriot National Bancorp, Inc. is headquartered in Stamford, Connecticut and the Bank has full service branches in Connecticut and New York.

Since opening its doors in 1994, the Company’s mission has been to serve our local communities by helping our neighbors and neighborhood businesses thrive. All lending is handled locally and is specific to each borrower, and the commitment to local businesses goes further to connect, support and grow businesses in both the for-profit and nonprofit sectors, along with municipalities. Patriot believes a well-connected community is a strong community—and that together, all will prosper.

“Safe Harbor” Statement Under Private Securities Litigation Reform Act of 1995
Certain statements contained in Bancorp’s public statements, including this one, may be forward looking and subject to a variety of risks and uncertainties. These factors include, but are not limited to, (1) changes in prevailing interest rates which would affect the interest earned on Bancorp’s interest earning assets and the interest paid on its interest bearing liabilities, (2) the timing of repricing of Bancorp’s interest earning assets and interest bearing liabilities, (3) the effect of changes in governmental monetary policy, (4) the components of Bancorp’s periodic earnings and assets, (5) the fact that certain of the income recognized by Bancorp in any quarter may not be repeated in future periods, (6) the effect of changes in regulations applicable to Bancorp and the Bank and the conduct of its business, (7) changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks, (8) the ability of competitors that are larger than Bancorp to provide products and services which it is impracticable for Bancorp to provide, (9) the state of the economy and real estate values in Bancorp’s market areas, and the consequent effect on the quality of Bancorp’s loans, (10) recent governmental initiatives that are expected to have a profound effect on the financial services industry and could dramatically change the competitive environment of the Company, (11) other legislative or regulatory changes, including those related to residential mortgages, changes in accounting standards, and Federal Deposit Insurance Corporation (“FDIC”) premiums that may adversely affect the Company, (12) the application of generally accepted accounting principles, consistently applied, (13) the fact that one period of reported results may not be indicative of future periods, (14) the state of the economy in the greater New York metropolitan area and its particular effect on the Company’s customers, vendors and communities and other such factors, including risk factors, as may be described in Bancorp’s other filings with the SEC.

PATRIOT NATIONAL BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dollars in thousands						September 30, 2017				June 30, 2017				September 30, 2016
Assets
Noninterest bearing deposits and cash					$	3,337			$	3,210			$	2,479
Interest bearing deposits						25,075				7,633				43,035
Total cash and cash equivalents						28,412				10,843				45,514
Securities-available for sale						29,586				24,981				23,374
Other investments						4,450				4,450				4,450
Total investment securities						34,036				29,431				27,824
FRB & FHLB stock						8,813				8,257				7,818
Gross loans						710,118				679,088				560,150
Allowance for loan losses						(6,222)				(5,944)				(7,328)
Net loans						703,896				673,144				552,822
Accrued interest and dividends receivable						3,501				3,208				2,308
Premises and equipment, net						34,713				34,471				30,850
Other real estate owned						851				851				851
Deferred tax asset, net						10,686				11,212				13,340
Other assets						1,823				2,003				1,589
Total Assets					$	826,731			$	773,420			$	682,916
Liabilities and Shareholders' Equity
Deposits
Noninterest bearing deposits					$	76,875			$	77,778			$	77,289
Interest bearing deposits						528,539				484,261				393,881
						605,414				562,039				471,170
FHLB advances						130,000				120,000				135,000
Note Payable - long term senior debt						11,684				11,666				-
Subordinated debt						8,085				8,082				8,078
Note Payable						1,627				1,675				1,815
Mortgage escrow deposits						1,799				3,111				1,478
Accrued expenses and other liabilities						1,812				1,547				2,793
Total Liabilities						760,421				708,120				620,334
Common stock						40				40				40
Treasury stock						(1,179)				(1,177)				(167)
Additional paid-in capital						106,834				106,797				106,694
Accumulated deficit						(39,394)				(40,368)				(43,947)
Accumulated other comprehensive gain (loss)						9				8				(38)
Total Shareholders' Equity						66,310				65,300				62,582
Total Liabilities and Shareholders' Equity					$	826,731			$	773,420			$	682,916

 

PATRIOT NATIONAL BANCORP, INC.
STATEMENTS OF OPERATIONS
(Unaudited)						Three Months Ended												Nine Months Ended
Dollars in thousands, except per share data						September 30, 2017				June 30, 2017				September 30, 2016				September 30, 2017				September 30, 2016
Interest and dividend income
Interest and fees on loans					$	8,522			$	7,591				6,188			$	22,720			$	17,811
Interest on investment securities						275				242				131				688				405
Dividends on investment securities						105				93				88				280				264
Other interest income						65				19				25				148				94
Total interest and dividend income						8,967				7,945				6,432				23,836				18,574
Interest expense
Interest on deposits						1,339				1,129				549				3,457				1,518
Interest on Federal Home Loan Bank borrowings						248				183				73				509				258
Interest on Note Payable - long term senior debt						229				228				-				686				-
Interest on subordinated debt						92				89				85				266				250
Interest on other borrowings						7				8				9				24				25
Total interest expense						1,915				1,637				716				4,942				2,051
Net interest income						7,052				6,308				5,716				18,894				16,523
Provision (credit) for loan losses						545				260				355				(944)				2,314
Net interest income after (credit)
provision for loan losses						6,507				6,048				5,361				19,838				14,209
Non-interest income
Loan application, inspection and processing fees						25				15				64				61				152
Fees and service charges						149				146				150				444				451
Rental Income						117				91				104				302				311
Loss on sale of investment securities						-				-				-				(78)				-
Other income						95				97				94				283				273
Total non-interest income						386				349				412				1,012				1,187
Non-interest expense
Salaries and benefits						2,741				2,497				2,169				7,668				7,334
Occupancy and equipment expense						796				807				783				2,378				2,313
Data processing						340				326				288				786				814
Professional services and other outside services						449				550				409				1,651				1,182
Advertising and promotional expenses						81				111				128				266				341
Loan administration and processing expenses						22				14				14				45				30
Regulatory assessments						230				163				159				572				453
Insurance expense						66				56				57				181				168
Material and communications						97				103				106				287				314
Other operating expenses						400				387				328				1,096				992
Total non-interest expense						5,222				5,014				4,441				14,930				13,941
Income before income taxes						1,671				1,383				1,332				5,920				1,455
Expense for Income taxes						658				579				518				2,373				570
Net income					$	1,013			$	804			$	814			$	3,547			$	885
Basic income per share					$	0.26			$	0.21			$	0.21			$	0.91			$	0.22
Diluted income per share					$	0.26			$	0.21			$	0.21			$	0.91			$	0.22

 

PATRIOT NATIONAL BANCORP, INC.
FINANCIAL RATIOS AND OTHER DATA
(Unaudited)
Dollars in thousands, except shares outstanding and per share data
							Quarter Ended
							September 30, 2017				June 30, 2017				September 30, 2016
Quarterly Performance Data:
Net Income						$	1,013			$	804			$	814
Return on Average Assets							0.49%				0.43%				0.51%
Return on Average Equity							6.05%				4.95%				5.17%
Net Interest Margin							3.65%				3.61%				3.85%
Efficiency Ratio							70%				75%				72%
Qtr % increase loans							5%				8%				6%
Qtr % increase deposits							8%				0%				6%
Asset Quality:
Nonaccrual loans						$	2,051			$	1,859			$	4,751
Other real estate owned							851				851				851
Total nonperforming assets						$	2,902			$	2,710			$	5,602
Nonaccrual loans / loans							0.29%				0.27%				0.85%
Nonperforming assets / assets							0.35%				0.35%				0.82%
Allowance for loan losses						$	6,222			$	5,944			$	7,328
Allowance for loan losses / loans							0.88%				0.88%				1.31%
Allowance / nonaccrual loans							303.4%				319.7%				154.2%
Gross loan charge-offs for the quarter						$	275			$	13			$	238
Gross loan (recoveries) for the quarter						$	(8)			$	-			$	(2)
Net loan charge-offs (recoveries) for the quarter						$	267			$	13			$	236
Capital Data and Capital Ratios
Book value per share (1)						$	17.02			$	16.77			$	15.80
Shares outstanding							3,895,720				3,894,128				3,959,903
Bank Capital Ratios:
Leverage Ratio							9.57%				9.97%				9.68%
Tier 1 Capital							10.69%				10.73%				10.34%
Total Risk Based Capital							11.55%				11.59%				11.59%
(1) Book value per share represents shareholders' equity divided by outstanding shares.
Reconciliation Table, Non-GAAP to GAAP:
Patriot Bancorp believes that the Net Income Excluding Loan Loss Provision is useful in the assessment of financial performance because it negates the impart of loan losses and recoveries associated with the settlement of a single troubled loan.
							Quarter Ended												Nine Months Ended September 30,
Net Income excluding Loan Loss Provision							September 30, 2017				June 30, 2017				September 30, 2016				2017				2016
Net Income reported						$	1,013			$	804			$	814			$	3,547			$	885
Tax Provision (Benefit)						$	658			$	579			$	518			$	2,373			$	570
Loan Loss Provision						$	545			$	260			$	355			$	(944)			$	2,314
Effective tax rate							39.38%				41.87%				38.89%				40.08%				39.18%
Pre-Tax Income Reported						$	1,671			$	1,383			$	1,332			$	5,920			$	1,455
Pre-tax Income excluding loan loss provision						$	2,216			$	1,643			$	1,687			$	4,976			$	3,769
Net Income excluding loan loss provision						$	1,343			$	955			$	1,031			$	2,981			$	2,292

Contacts:
Patriot Bank, N.A.
900 Bedford Street
Stamford, CT 06901
www.BankPatriot.com

Richard Muskus
President
203-252-5939

Joseph Perillo
Chief Financial Officer
203-252-5954

Michael Carrazza
CEO and Chairman
203-251-8230

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