29% Jump In Third Quarter Earnings At Patriot National Bancorp As New Management Pushes Economic Growth

STAMFORD, Conn., Nov. 14, 2016 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. ("Patriot", "Bancorp" or the "Company") (NASDAQ:PNBK), the parent company of Patriot Bank, N.A. (the "Bank"), today reported a nearly 30 percent increase in third quarter earnings, with net income of $814,000, or $0.21 diluted income per share.  This represents a sizable increase over the $633,000 net income a year ago, or $0.16 diluted income per share. In the second quarter of 2016, the Company reported a $582,000 net loss, or ($0.15) diluted income per share.  

As of September 30, 2016, total assets increased by $31 million to $683 million - a nearly 5% jump - compared to $652 million at June 30, 2016 and $641 million at September 30, 2015.  Net loans totaled $553 million, up 6%, at September 30, 2016 compared to $521 million at June 30, 2016 and $491 million at September 30, 2015.  Deposits also grew 5.6%, an increase of $25 million over the quarter.

In the third quarter, Patriot's Chairman, Michael Carrazza, stepped into the CEO seat to execute a series of value-enhancing performance initiatives.  "Our team developed and began implementing initiatives aimed at generating stronger and consistent economic performance, which already proved visible this quarter," said Mr. Carrazza. "These value-based, reengineering disciplines made an immediate difference and are expected to further elevate operating efficiencies and bottom line results.  We are looking to make continued strides going forward."

Net interest income, before provision for loan losses, increased by $334,000 (6.2%), as compared to the second quarter of 2016, and $272,000 (5%) compared to the third quarter of 2015. The increase in net interest income this quarter over these prior periods is the result of loan growth.  The loan pipeline remains strong and continued growth is expected.  Patriot's net interest margin was 3.85% for the third quarter, as compared to 3.78% in the prior quarter and 3.67% in the third quarter of 2015.

The provision for loan losses in the quarter, representing a stable increase in loan growth, was $355,000, as compared to $1,959,000 in the second quarter of 2016 and zero for the third quarter of 2015. 

Non-interest income increased by $47,000, or 12.9%, over last quarter and by $50,000, or 13.8%, over the same period last year.  Greater loan fees in the third quarter of 2016 contributed to these increases.

Non-interest expense decreased $295,000, or 6.2%, over last quarter and by $312,000, or 6.6%, compared to the third quarter of 2015. 

Deposits grew 5.6% to $471 million at September 30, 2016 compared to $446 million at June 30, 2016 and $445 million at September 30, 2015.  Deposit growth is one of the key initiatives launched in the third quarter, and Mr. Carrazza said it will continue to be an area of focus as the Bank expands.

As of September 30, 2016, shareholders' equity rose to $62.6 million, as compared to $61.9 million in the prior quarter and $60.9 million a year ago.  The company's book value per share was $15.80 at September 30, 2016, compared to $15.64 at June 30, 2016 and $15.37 at September 30, 2015. 

The Bank's capital ratios continue to be strong, as the Bank maintained its "well capitalized" regulatory status.  As of September 30, 2016, Tier 1 leverage ratio was 9.68%, Tier 1 risk based capital was 10.34% and total risk based capital was 11.59%.     

About the Company

Patriot National Bancorp, Inc. is headquartered in Stamford, Connecticut and the Bank has 10 full service branches, eight in Connecticut and two in 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 effect of changes in regulations applicable to Bancorp and the Bank and the conduct of its business, (5) changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks, (6) the ability of competitors that are larger than Bancorp to provide products and services which it is impracticable for Bancorp to provide, (7) 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, (8) 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, (9) 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, (10) the application of generally accepted accounting principles, consistently applied,  (11) the fact that one period of reported results may not be indicative of future periods,  (12)  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   Sept 30, 2016   June 30, 2016   Sept 30, 2015  
               
Assets              
               
Noninterest bearing deposits and cash   $   2,454     $   2,893     $   2,429    
Interest bearing deposits       43,060         43,594         56,909    
Total cash and cash equivalents       45,514         46,487         59,338    
               
Securities-available for sale       23,374         23,037         30,719    
Other investments       4,450         4,450         4,450    
FRB & FHLB stock       7,818         7,982         8,676    
Total securities       35,642         35,469         43,845    
               
Gross loans       560,150         528,654         496,314    
Allowance for loan losses       (7,328 )       (7,209 )       (5,240 )  
Net loans       552,822         521,445         491,074    
               
Accrued interest and dividends receivable       2,308         2,120         2,107    
Premises and equipment, net       30,850         29,972         29,193    
Other real estate owned       851         851         -     
Deferred tax asset, net        13,340         13,836         13,905    
Other assets       1,759         1,679         1,263    
Total Assets   $     683,086     $     651,859     $     640,725    
               
Liabilities and Shareholders' Equity              
               
Deposits              
Noninterest bearing deposits   $   77,304     $   75,244     $   75,684    
Interest bearing deposits       393,881         371,092         369,432    
        471,185         446,336         445,116    
               
FHLB advances and repurchase agreements       135,000         128,000         120,000    
Subordinated debt       8,248         8,248         8,248    
Mortgage escrow deposits       1,478         2,451         1,324    
Note Payable       1,800         1,846         1,985    
Accrued expenses and other liabilities       2,793         3,064         3,156    
Total Liabilities       620,504         589,945         579,829    
               
Common stock       40         40         40    
Treasury stock       (167 )       (160 )       (160 )  
Additional paid-in capital       106,694         106,876         106,447    
Accumulated deficit       (43,947 )       (44,761 )       (45,364 )  
Accumulated other comprehensive loss       (38 )       (81 )       (67 )  
Total Shareholders' Equity       62,582         61,914         60,896    
               
Total Liabilities and Shareholders' Equity   $     683,086     $     651,859     $     640,725    
               

 
PATRIOT NATIONAL BANCORP, INC.                    
STATEMENTS OF OPERATIONS                    
(Unaudited) Three Months Ended   Nine Months Ended  
Dollars in thousands, except per share data Sept 30, 2016   June 30, 2016   Sept 30, 2015   Sept 30, 2016   Sept 30, 2015  
                     
Interest and dividend income                    
Interest and fees on  loans $   6,188     $   5,783     $   5,879     $   17,811     $   17,349    
Interest on investment securities     131         132         115         405         350    
Dividends on investment securities     88         90         85         264         202    
Other interest income     25         28         30         94         76    
Total interest and dividend income     6,432         6,033         6,109         18,574         17,977    
                     
Interest expense                    
Interest on deposits     549         496         498         1,518         1,540    
Interest on Federal Home Loan Bank borrowings     73         64         90         258         246    
Interest on subordinated debt     85         83         74         250         218    
Interest on other borrowings     9         8         3         25         3    
Total interest expense     716         651         665         2,051         2,007    
                     
Net interest income     5,716         5,382         5,444         16,523         15,970    
                     
Provision for loan losses     355         1,959         -          2,314         250    
                     
Net interest income after                    
provision for loan losses     5,361         3,423         5,444         14,209         15,720    
                     
Non-interest income                    
Loan application, inspection and processing fees     64         21         16         152         171    
Fees and service charges     150         150         148         451         469    
Rental Income     104         104         107         311         305    
Other income     94         90         91         273         262    
Total non-interest income     412         365         362         1,187         1,207    
                     
Non-interest expense                    
Salaries and benefits     2,169         2,615         2,245         7,334         6,984    
Occupancy and equipment expense     783         750         814         2,313         2,678    
Data processing     288         241         298         814         803    
Professional services and other outside services     409         364         322         1,182         1,282    
Advertising and promotional expenses     128         96         329         341         516    
Loan administration and processing expenses     14         8         8         30         37    
Regulatory assessments     159         147         140         453         451    
Insurance expense     57         56         79         168         243    
Material and communications     106         115         95         314         282    
Other operating expenses     328         344         423         992         967    
Total non-interest expense     4,441         4,736         4,753         13,941         14,243    
                     
Income before income taxes     1,332         (948 )       1,053         1,455         2,684    
Expense for income taxes     518         (366 )       420         570         1,073    
Net income $     814     $     (582 )   $     633     $     885     $     1,611    
                     
Basic income per share  $   0.21     $   (0.15 )   $   0.16     $   0.22     $   0.42    
Diluted income per share $   0.21     $   (0.15 )   $   0.16     $   0.22     $   0.41    
                     

 
           
PATRIOT NATIONAL BANCORP, INC.          
FINANCIAL RATIOS AND OTHER DATA          
(Unaudited)          
Dollars in thousands, except per share data          
           
  Sept 30, 2016   June 30, 2016   Sept 30, 2015
Asset Quality:          
Nonaccrual loans $   4,751     $   4,800     $   383  
Other real estate owned     851         851         -   
Total nonperforming assets $   5,602     $   5,641     $   383  
           
           
Nonaccrual loans / loans   0.85 %     0.91 %     0.08 %
Nonperforming assets / assets   0.82 %     0.87 %     0.06 %
Allowance for loan losses $   7,328     $   7,209     $   5,240  
Allowance for loan losses / loans   1.31 %     1.36 %     1.06 %
Allowance / nonaccrual loans   154.2 %     150.2 %     1368.1 %
Gross loan charge-offs for the quarter $   238     $   2     $   11  
Gross loan (recoveries) for the quarter $   (2 )   $   (4 )   $   (43 )
Net loan charge-offs (recoveries) for the quarter $   236     $   (2 )   $   (32 )
           
           
Capital Data:          
Book value per share (1) $   15.80     $   15.64     $   15.37  
Shares outstanding     3,959,903         3,958,733         3,962,170  
           
(1)  Book value per share represents shareholders' equity divided by outstanding shares.          

Contact:Patriot Bank, N.A.900 Bedford StreetStamford, CT 06901www.BankPatriot.comMichael CarrazzaCEO & Chairman203-251-8230Neil M. McDonnellEVP & CFO203-252-5938

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