29% Jump in Third Quarter Earnings at Patriot National Bancorp as new management pushes economic growth

Strong numbers fueled by improvements in earnings, loan and deposit 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 dataSept 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.     



            

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