STAMFORD, Conn., July 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 quarter of powerful earnings momentum, reporting second quarter pre-tax income of $1.4 million and net income of $804 thousand, or $0.21 per diluted share.

This compares to net income of $1.7 million, $0.44 per share, in the first quarter of 2017 and a reported loss of $582 thousand for the same quarter a year ago.   For the six months ended June 30, 2017 net income was $2.5 million, or $0.65 per diluted share, compared with $71 thousand, or $0.02 per diluted share, for the first half of 2016.

The comparative results for the first six months of 2016 and 2017 were affected by a troubled loan that was ultimately resolved.  In the first half of 2016, the Bank took significant loan loss provisions, 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 included loan losses and recoveries related to this loan), Patriot's second quarter net income was up 42% from the first quarter of 2017, and net income for the six-month period ending June 30, 2017 was 28% 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.

Strong earnings performance is attributable to loan and deposit growth, while operating expenses have remained under tight control.  Compared to a year ago, loans increased 28% while deposits increased 26%, fueling the strong growth in net interest income.

CEO Michael Carrazza stated: "This quarter's impressive results are directly attributable to the enhancements we have made in management and operations.  We expect this positive trend to continue as we prioritize high-impact strategies."

Mr. Carrazza took over operational control of Patriot as interim CEO in August 2016 to execute a series of value-enhancing strategies and to reposition the executive team.  The performance in the past four quarters reflects an intensive and carefully planned strategy to drive profitability and shareholder value. 

"Initiatives to increase scale, build critical mass in attractive product lines and improve deposit funding channels are primary areas of focus and will continue to add to our profitability and franchise value," added Mr. Carrazza.

As of June 30, 2017, total assets were $773 million, essentially unchanged from the end of the first quarter, when they had increased by $18 million.  In the year since June 30, 2016, total assets increased by $121 million, up from $652 million.  Loans totaled $679 million as of June 30, 2017, up 8% from the $631 million reported March 31, 2017, and up 28% from the $529 million reported June 30, 2016. 

Deposits remained essentially unchanged during the quarter at $562 million and were up 26% year-over-year as compared with $446 million at the end of the second quarter of 2016.  Deposit growth remains a key initiative to keep pace with Patriot's overall growth prospects. The loan pipeline remains strong and continued growth is expected. 

Net interest income was $6.3 million in the quarter, up 14% from the first quarter 2017 and up 17% from the corresponding 2016 period, reflecting strong loan and deposit growth.  Net interest income of $11.8 million in the year-to-date period was 9% higher than the $10.8 million in the six month period ending June 30, 2016.  Net interest margin was 3.61% for the quarter and 3.56% for the 2017 year-to-date period, as compared to 3.50% in the prior quarter and 3.77% in the first half of 2016.

The provision for loan losses in the quarter was $260 thousand, reflecting the growth in loans with overall credit quality remaining strong.  The year-to-date credit in the provision of $1.5 million reflects the previously noted recovery. The provision for loan losses was $2.0 million in both the second quarter and year-to-date periods in 2016.  

Non-interest income was $349 thousand in the quarter, 26% higher than the prior quarter.  The prior quarter includes a loss on the sale of investment securities of $78 thousand.  Year-to-date non-interest income of $626 thousand was 19% lower than the prior year, primarily due to the loss on security sales recognized in the first quarter, as the portfolio was intentionally re-positioned to provide future enhancements to profitability.

Non-interest expense increased 7%, over the prior quarter and year-to-date non-interest expenses increased 2% over the same period in 2016. 

As of June 30, 2017 shareholders' equity was $65.3 million, an increase of $3.4 million from a year ago.  The Company's book value per share increased to $16.77 at June 30, 2017 as compared to $15.64 a year ago.

The Bank's capital ratios continue to be strong, as the Bank maintained its "well capitalized" regulatory status.  As of June 30, 2017, Tier 1 leverage ratio was 9.97%, Tier 1 risk based capital was 10.73% and total risk based capital was 11.59%.     

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       June 31, 2017   March 31, 2017   June 30, 2016  
                       
Assets                      
                       
Noninterest bearing deposits and cash     $ 3,210     $ 5,086     $ 2,918    
Interest bearing deposits         7,633       55,180       43,569    
  Total cash and cash equivalents     10,843       60,266       46,487    
                       
Securities-available for sale         24,981       21,201       23,037    
Other investments           4,450       4,450       4,450    
  Total investment securities       29,431       25,651       27,487    
                       
FRB & FHLB stock           8,257       7,847       7,982    
Gross loans           679,088       630,727       528,654    
Allowance for loan losses           (5,944 )       (5,697 )       (7,209 )  
  Net loans         673,144       625,030       521,445    
                       
Accrued interest and dividends receivable     3,208       3,063       2,120    
Premises and equipment, net       34,471       33,442       29,972    
Other real estate owned         851       851       851    
Deferred tax asset, net         11,212       11,691       13,836    
Other assets           2,003       6,921       1,507    
  Total Assets       $     773,420     $     774,762     $     651,687    
                       
Liabilities and Shareholders' Equity                
                       
Deposits                      
  Noninterest bearing deposits   $ 77,778     $ 78,372     $ 75,229    
  Interest bearing deposits       484,261       482,587       371,092    
              562,039       560,959       446,321    
                       
FHLB advances           120,000       124,000       128,000    
Note Payable - long term senior debt       11,666       11,647       -    
Subordinated debt           8,082       8,080       8,076    
Note Payable           1,675       1,722       1,862    
Mortgage escrow deposits         3,111       1,755       2,451    
Accrued expenses and other liabilities       1,547       2,156       3,063    
    Total Liabilities         708,120         710,319         589,773    
                       
Common stock           40       40       40    
Treasury stock           (1,177 )     (1,177 )     (160 )  
Additional paid-in capital         106,797       106,773       106,876    
Accumulated deficit         (40,368 )     (41,172 )     (44,761 )  
Accumulated other comprehensive loss     8       (21 )     (81 )  
    Total Shareholders' Equity       65,300         64,443         61,914    
                       
  Total Liabilities and Shareholders' Equity   $     773,420     $     774,762     $     651,687    
                       

 
PATRIOT NATIONAL BANCORP, INC.                        
STATEMENTS OF OPERATIONS                          
(Unaudited)         Three Months Ended   Six Months Ended  
Dollars in thousands, except per share data   June 30, 2017   March 31, 2017   June 30, 2016   June 30, 2017   June 30, 2016  
                               
Interest and dividend income                          
  Interest and fees on  loans     $ 7,591   $ 6,607       5,783     $ 14,198     $ 11,623  
  Interest on investment securities     242     171       132       413       274  
  Dividends on investment securities     93     82       90       175       176  
  Other interest income       19     64       28       83       69  
    Total interest and dividend income   7,945     6,924       6,033       14,869       12,142  
                               
Interest expense                            
  Interest on deposits       1,129     988       496       2,118       969  
  Interest on Federal Home Loan Bank borrowings   183     78       64       261       185  
  Interest on Note Payable - long term senior debt   228     229       -       457       -  
  Interest on subordinated debt       89     85       83       174       165  
  Interest on other borrowings       8     9       8       17       16  
    Total interest expense     1,637     1,390       651       3,027       1,335  
                               
    Net interest income       6,308       5,534         5,382         11,842         10,807  
                               
(Credit) provision for loan losses       260     (1,749 )     1,959       (1,489 )     1,959  
                               
    Net interest income after (credit)                    
    provision for loan losses     6,048     7,283       3,423       13,331       8,848  
                               
Non-interest income                          
  Loan application, inspection and processing fees   15     21       21       36       88  
  Fees and service charges       146     149       150       295       301  
  Rental Income         91     94       104       185       207  
  Loss on sale of investment securities     -     (78 )     -       (78 )     -  
  Other income         97     91       90       188       179  
    Total non-interest income       349       277         365         626         775  
                               
Non-interest expense                          
  Salaries and benefits       2,497     2,430       2,615       4,927       5,165  
  Occupancy and equipment expense     807     775       750       1,582       1,530  
  Data processing         326     120       241       446       526  
  Professional services and other outside services   550     652       364       1,202       773  
  Advertising and promotional expenses     111     74       96       185       213  
  Loan administration and processing expenses   14     9       8       23       16  
  Regulatory assessments       163     179       147       342       294  
  Insurance expense         56     59       56       115       111  
  Material and communications       103     87       115       190       208  
  Other operating expenses       387     309       344       696       664  
    Total non-interest expense       5,014       4,694         4,736         9,708         9,500  
                               
    Income before income taxes     1,383     2,866       (948 )     4,249       123  
Expense for Income taxes         579     1,136       (366 )     1,715       52  
    Net income     $     804   $     1,730     $     (582 )   $     2,534     $     71  
                               
    Basic income per share   $ 0.21   $ 0.44     $ (0.15 )   $ 0.65     $ 0.02  
    Diluted income per share   $ 0.21   $ 0.44     $ (0.15 )   $ 0.65     $ 0.02  
                               

 
PATRIOT NATIONAL BANCORP, INC.                    
FINANCIAL RATIOS AND OTHER DATA                  
(Unaudited)                        
Dollars in thousands, except shares outstanding and per share data                
                             
            Quarter Ended        
            June 30, 2017   March 31, 2017   June 30, 2016        
                             
Quarterly Performance Data:                    
    Net Income     $ 804     $ 1,730     $ (582 )        
    Return on Average Assets     0.43 %     1.02 %     -0.37 %        
    Return on Average Equity     4.95 %     11.05 %     -3.71 %        
    Net Interest Margin     3.61 %     3.50 %     3.78 %        
    Efficiency Ratio       75 %     81 %     82 %        
    Qtr % increase (decrease) loans   8 %     8 %     9 %        
    Qtr % increase (decrease) deposits   0 %     6 %     5 %        
                             
Asset Quality:                        
    Nonaccrual loans     $ 1,859     $ 1,822     $ 4,800          
    Other real estate owned     851       851       851          
    Total nonperforming assets $ 2,710     $ 2,673     $ 5,651          
                             
    Nonaccrual loans / loans     0.27 %     0.29 %     0.91 %        
    Nonperforming assets / assets   0.35 %     0.35 %     0.87 %        
    Allowance for loan losses   $ 5,944     $ 5,697     $ 7,209          
    Allowance for loan losses / loans   0.88 %     0.90 %     1.36 %        
    Allowance / nonaccrual loans   319.7 %     312.7 %     150.2 %        
    Gross loan charge-offs for the quarter $ 13     $ -     $ 2          
    Gross loan (recoveries) for the quarter $ -     $ (2,771 )   $ (4 )        
    Net loan charge-offs (recoveries) for the quarter $ 13     $ (2,771 )   $ (2 )        
                             
Capital Data and Capital Ratios                    
    Book value per share (1)   $ 16.77     $ 16.55     $ 15.64          
    Shares outstanding     3,894,128       3,894,128       3,958,733          
Bank Capital Ratios:                      
    Leverage Ratio       9.97 %     10.65 %     9.83 %        
    Tier 1 Capital       10.73 %     11.09 %     10.87 %        
    Total Risk Based Capital     11.59 %     11.96 %     12.12 %        
                             
(1)   Book value per share represents shareholders' equity divided by outstanding shares.              
                             
            Quarter Ended   Six Months Ended June 30  
Net Income excluding Loan Loss Provision June 30, 2017   March 31, 2017   June 30, 2016     2017   2016  
    Net Income (loss) reported   $ 804     $ 1,730     $ (583 )   $ 2,534   $ 71    
    Tax Provision (benefit)   $ 579     $ 1,136     $ (365 )   $ 1,715   $ 52    
    Loan Loss Provision (credit)   $ 260     $ (1,749 )   $ 1,959     $ (1,489 ) $ 1,959    
    Effective tax rate       41.87 %     39.63 %     38.55 %     40.36 %   42.19 %  
                             
    Pre-Tax Income (loss) Reported $ 1,384     $ 2,866     $ (948 )   $ 4,249   $ 123    
    Pre-tax Income excluding loan loss provision $ 1,644     $ 1,117     $ 1,011     $ 2,761   $ 2,082    
    Net Income excluding loan loss provision $ 955     $ 674     $ 621     $ 1,629   $ 1,275    
                             
Contacts:Patriot Bank, N.A.900 Bedford StreetStamford, Ct 06901www.BankPatriot.comJoseph PerilloChief Financial Officer203-252-5954Michael CarrazzaCEO and Chairman203-251-8230

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