STAMFORD, Conn., Feb. 02, 2018 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. ("Patriot", "Bancorp") (NASDAQ:PNBK), the parent company of Patriot Bank, N.A. (the "Bank"), today announced quarterly pre-tax earnings of $1.1 million and quarterly net income of $600 thousand, or $0.15 per fully diluted share.

Full year pre-tax income in 2017 was $7.0 million, $3.9 million higher than the $3.1 million reported in 2016.  For the year ended December 31, 2017, net income was $4.1 million, or $1.06 per diluted share, more than double the prior year results of $1.9 million, or $0.49 per fully diluted share. 

CEO Michael Carrazza stated: "2017's full year results represent a major earnings achievement for Patriot, and marks the strongest earnings year in Patriot's history.  This is further confirmation that the growth blueprint put in place is yielding successful, value enhancing results. We remain keenly focused on pursuing certain strategic initiatives that support growth and diversification of our banking franchise."

Richard Muskus, Patriot's President added, "We have a strong loan pipeline, a dedicated team of highly qualified lending and branch management professionals, and prudent underwriting standards.  We will continue to add to our 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 reported fourth quarter net income, which included $601 thousand of non-recurring special project costs, compares to net income of $1 million, $0.26  per fully diluted share, in the third  quarter of 2017 and $1 million, $0.27 per share, for the same quarter a year ago.   

With respect to income taxes, a net provision of $502 thousand was taken in the fourth quarter. This net tax provision was comprised of two significant and mostly offsetting adjustments.  The provision increased by $2.81 million as a result of a reduction in value of the Company's deferred tax asset due to the change in corporate tax rates to 21% enacted in December of 2017.  At the same time, the income tax provision was reduced by $2.77 million, as a result of the recognition of deferred tax benefits due to a change in the classification of certain prior period tax losses that were previously deemed to have been subject to IRC Section 382 limitations.  

As of December 31, 2017 shareholders' equity was $66.7 million, an increase of $4.2 million from a year ago.  The Company's book value per share increased to $17.12 at December 31, 2017 as compared to $16.08 a year ago.

Patriot Bank's deposits continued to rise and are up 20% year-over-year, with loan growth of 24% from the prior year fueling a strong growth in net interest income.   Net interest income climbed 19% from the fourth quarter of 2016 and is 16% higher in the full year period.

In addition to the announcement of quarterly earnings, Patriot also announced today the declaration of its third consecutive quarterly dividend of $0.01 per share which will be paid February 16, 2018.

The comparative results for the full year 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 year was 6% higher than in 2016. 

During the year, total assets grew by $95 million (13%), to $852 million, up from $757 million.  Loans totaled $720 million as of year-end 2017, up 1% from the $710 million reported at September 30, 2017, and up 24% from the $582 million reported at December 31, 2016. 

Deposits increased during the quarter to $637 million and were up 20% year-over-year as compared with $529 million at the end of 2016.  Deposit growth remains a key initiative to keep pace with Patriot's overall growth prospects.

Net interest income was $7.0 million in the quarter, essentially unchanged from the third quarter of 2017 and up 19% from the corresponding 2016 period.  Net interest income of $25.9 million in the year-to-date period was 16% higher than the $22.4 million in the year ending December 31, 2016.  Net interest margin was 3.51% for the quarter and 3.58% for the 2017 year-to-date period, as compared to 3.65 % in the prior quarter and 3.78% in 2016.

The provision for loan losses in the quarter was $87 thousand, with overall credit quality remaining strong.  The year-to-date credit in the provision of $857 thousand reflects the previously noted recovery. The provision for loan losses was $150 thousand in the fourth quarter of 2016 and $2.5 million for the year ended December 31, 2016.

Non-interest income was $432 thousand in the quarter, 12% higher than the prior quarter.  Year-to-date non-interest income of $1.4 million was 7% lower than the prior year.

Non-interest expense increased $1 million over the prior quarter and year-to-date non-interest expenses increased $2.8 million over the same period in 2016.  The quarter and full year expenses were impacted by non-recurring project costs of $601 thousand in the quarter ($640 thousand for the full year) associated with the pending Prime acquisition and an income tax related consulting project.

The Bank's capital ratios continue to be strong, as the Bank maintained its "well capitalized" regulatory status.  As of December 31, 2017, Tier 1 leverage ratio was 9.36%, Tier 1 risk based capital was 10.55% and total risk based capital was 11.41%.     

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. AND SUBSIDIARY          
CONSOLIDATED BALANCE SHEETS            
(Unaudited)            
Dollars in thousands   December 31,2017   September 30,2017   December 31,2016
             
Assets            
             
Noninterest bearing deposits and cash   $ 3,607     $ 3,337     $ 2,596  
Interest bearing deposits     45,634       25,075       89,693  
Total cash and cash equivalents     49,241       28,412       92,289  
             
Available-for-sale securities, at fair value     25,576       29,586       24,428  
Other investments, at cost     4,450       4,450       4,450  
Total investment securities     30,026       34,036       28,878  
             
FRB & FHLB stock, at cost     8,391       8,813       7,718  
             
Gross loans receivable     719,647       710,118       581,657  
Allowance for loan losses     (6,297 )     (6,222 )     (4,675 )
Net loans receivable     713,350       703,896       576,982  
             
Accrued interest and dividends receivable     3,496       3,501       2,726  
Premises and equipment, net     35,358       34,713       32,759  
Other real estate owned     -       851       851  
Deferred tax asset, net     10,397       10,686       12,632  
Other assets     1,821       1,823       1,819  
Total assets   $     852,080     $     826,731     $     756,654  
             
Liabilities and Shareholders' Equity            
             
Deposits            
Noninterest bearing deposits   $ 81,197     $ 76,875     $ 76,772  
Interest bearing deposits     556,242       528,539       452,552  
      637,439       605,414       529,324  
             
Federal Home Loan Bank and correspondent bank borrowings     120,000       130,000       138,000  
Senior  notes, net     11,703       11,684       11,628  
Junior subordinated debt owed to unconsolidated trust     8,086       8,085       8,079  
Note Payable     1,580       1,627       1,769  
Advances from borrowers for taxes and insurance     2,829       1,799       2,676  
Accrued expenses and other liabilities     3,694       1,812       2,608  
Total liabilities       785,331         760,421         694,084  
             
Common stock     40       40       40  
Additional paid-in capital     106,875       106,834       106,729  
Accumulated deficit     (38,832 )     (39,394 )     (42,902 )
Treasury stock, at cost     (1,179 )     (1,179 )     (1,177 )
Accumulated other comprehensive (loss) gain     (155 )     9       (120 )
Total Shareholders' Equity       66,749         66,310         62,570  
             
Total Liabilities and Shareholders' Equity   $     852,080     $     826,731     $     756,654  
             

 
PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY                  
CONSOLIDATED STATEMENTS OF INCOME                      
(Unaudited)   Three Months Ended   Twelve Months Ended
Dollars in thousands, except per share data   December 31,2017   September30, 2017   December 31,2016   December 31,2017   December 31,2016
                     
Interest and dividend income                    
Interest and fees on  loans   $ 8,550   $ 8,522   $ 6,579   $ 31,270     $ 24,391
Interest on investment securities     294     275     140     982       544
Dividends on investment securities     103     105     90     383       353
Other interest income     66     65     25     214       120
Total interest and dividend income     9,013     8,967     6,834     32,849       25,408
                     
Interest expense                    
Interest on deposits     1,491     1,339     724     4,948       2,242
Interest on Federal Home Loan Bank borrowings     193     248     113     702       371
Interest on Note Payable - long term senior debt     229     229     25     915       25
Interest on subordinated debt     94     92     84     360       334
Interest on other borrowings     7     7     11     31       36
Total interest expense     2,014     1,915     957     6,956       3,008
                     
Net interest income       6,999       7,052       5,877       25,893         22,400
                     
Provision (credit) for loan losses     87     545     150     (857 )     2,464
                     
Net interest income after provision (credit) for loan losses     6,912     6,507     5,727     26,750       19,936
                     
Non-interest income                    
Loan application, inspection and processing fees     12     25     28     73       180
Fees and service charges     146     149     149     590       600
Rental Income     97     117     103     399       414
Other income     177     95     88     382       362
Total non-interest income       432       386       368       1,444         1,556
                     
Non-interest expense                    
Salaries and benefits     3,247     2,741     2,155     10,915       9,489
Occupancy and equipment expense     755     796     797     3,133       3,110
Data processing     353     340     125     1,139       939
Professional services and other outside services     438     410     565     2,050       1,747
Merger/tax initiative project expenses     601     39     -     640       -
Advertising and promotional expenses     56     81     53     322       394
Loan administration and processing expenses     18     22     24     63       54
Regulatory assessments     272     230     151     844       603
Insurance expense     52     66     54     233       222
Material and communications     94     97     88     381       402
Other operating expenses     356     400     402     1,452       1,395
Total non-interest expense       6,242       5,222       4,414       21,172         18,355
                     
Income before income taxes     1,102     1,671     1,681     7,022       3,137
Expense for Income taxes     502     658     636     2,875       1,207
Net income   $     600   $     1,013   $     1,045   $     4,147     $     1,930
                     
Basic income per share   $ 0.15   $ 0.26   $ 0.27   $ 1.06     $ 0.49
Diluted income per share   $ 0.15   $ 0.26   $ 0.27   $ 1.06     $ 0.49
                     

 
                 
PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY                
FINANCIAL RATIOS AND OTHER DATA                  
(Unaudited)                  
Dollars in thousands, except shares outstanding and per share data                
                     
    Quarter Ended        
    December 31,2017   September30, 2017   December 31,2016        
                     
Quarterly Performance Data:                    
Net Income   $ 600     $ 1,013     $ 1,045          
Return on Average Assets     0.29 %     0.49 %     0.62 %        
Return on Average Equity     3.65 %     6.05 %     6.55 %        
Net Interest Margin     3.51 %     3.65 %     3.98 %        
Efficiency Ratio     84 %     70 %     71 %        
Qtr % increase loans     1 %     5 %     4 %        
Qtr % increase deposits     5 %     8 %     12 %        
                     
Asset Quality:                    
Nonaccrual loans   $ 3,781     $ 2,051     $ 4,751          
Other real estate owned     -       851       851          
Total nonperforming assets   $ 3,781     $ 2,902     $ 5,602          
                     
Nonaccrual loans / loans     0.53 %     0.29 %     0.82 %        
Nonperforming assets / assets     0.44 %     0.35 %     0.74 %        
Allowance for loan losses   $ 6,297     $ 6,222     $ 4,675          
Allowance for loan losses / loans     0.88 %     0.88 %     0.80 %        
Allowance / nonaccrual loans     166.5 %     303.4 %     98.4 %        
Gross loan charge-offs for the quarter   $ 17     $ 275     $ 2,935          
Gross loan (recoveries) for the quarter   $ (4 )   $ (8 )   $ (132 )        
Net loan charge-offs (recoveries) for the quarter   $ 13     $ 267     $ 2,803          
                     
Capital Data and Capital Ratios                    
Book value per share (1)   $ 17.12     $ 17.02     $ 16.08          
Shares outstanding     3,899,675       3,895,720       3,891,897          
                     
Bank Capital Ratios:                    
Leverage Ratio     9.36 %     9.57 %     10.52 %        
Tier 1 Capital     10.55 %     10.69 %     11.18 %        
Total Risk Based Capital     11.41 %     11.55 %     11.93 %        
                     
(1)   Book value per share represents shareholders' equity divided by outstanding shares.            
                             
                             
Net Income excluding Loan Loss Provision                  
The following table represents a reconciliation of the reported net income to the net income excluding loan loss provision for the three and twelve months ended December 31, 2017 and 2016, and the three months ended September 30, 2017. The table is reported in a format that is not in compliance with Generally Accepted Accounting Principles (non-GAAP) but is beneficial to the reader and provides enhanced comparability due to the loan loss and subsequent loan recovery associated with the troubled loan mentioned previously. Company management finds this measure useful when assessing the period to period change in core performance of the business.
     
      Quarter Ended   Year Ended December 31,
      December 31,2017   September30, 2017   December 31,2016   2017   2016
Net Income reported $ 600     $ 1,013     $ 1,045     $ 4,147     $ 1,930  
Tax Provision $ 502     $ 658     $ 636     $ 2,875     $ 1,207  
Loan Loss Provision $ 87     $ 545     $ 150     $ (857 )   $ 2,464  
Effective tax rate   45.55 %     39.38 %     37.83 %     40.94 %     38.48 %
                   
Pre-Tax Income Reported $ 1,102     $ 1,671     $ 1,681     $ 7,022     $ 3,137  
Pre-tax Income excluding loan loss provision $ 1,189     $ 2,216     $ 1,831     $ 6,165     $ 5,601  
Net Income excluding loan loss provision $ 647     $ 1,343     $ 1,138     $ 3,641     $ 3,446  
                       

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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