Patriot Bank Earnings Soar 165% in Q1

Deposits Up 32% & Loans Up 30% Year-Over-Year


STAMFORD, Conn., May 09, 2017 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. (“Patriot”, “Bancorp”) (NASDAQ:PNBK), the parent company of Patriot Bank, N.A. (the “Bank”), today announced its third consecutive quarter of powerful earnings momentum. Patriot reports first quarter net income of $1,730,000, or $0.44 per diluted share, a towering 165% increase over a year ago. Also, at the end of 2016, Patriot surpassed the three quarters of a billion dollar milestone and continued to demonstrate growth in the first quarter.

First quarter earnings also increased over the prior quarter by 66%.  For comparison to prior quarterly periods, the third quarter of 2016 saw $814,000 in net income, or $0.21 per diluted share, while in the fourth quarter Patriot reported $1,045,000 in net income, or $0.27 per share. The current quarter results include the impact of a substantial recovery of a loan that was charged-off last year.

As of March 31, 2017, total assets increased to $775 million, as compared to $757 million at December 31, 2016 and $636 million at March 31, 2016.  Net loans totaled $625 million, up 8% over $577 million as of December 31, 2016, and up 30% over $480 million at March 31, 2016. 

Deposits grew 6%, or $32 million, to $561 million at March 31, 2017 as compared to $529 million at December 31, 2016 and $424 million at March 31 2016.  Deposit growth remains a key initiative to keep pace with Patriot’s overall growth prospects. Patriot has seen total deposits grow an aggregate of 32% over the last year.

CEO Michael Carrazza stated: “Patriot’s recent jump in performance is a direct result of performance enhancing strategies that we designed and began implementing in the third quarter 2016.  The amalgamation of broad-based operational improvements, management changes, asset-class repositioning, and balance sheet reengineering are producing these very positive results, and they remain ongoing.  Tackled in this quarter was the successful recovery of a charged-off loan that had been paralyzed in a protracted legal process.  Our initiatives support a steady, predictable earnings trend, and our increasing scale will further drive efficiencies.”

Mr. Carrazza took 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 three quarters reflects a keenly focused and regimented effort to drive profitability and shareholder value. 

“Patriot’s banking platform is on a solid earnings trajectory, which improves each day.  Shareholders should benefit from increasing scale, profitability and strategic activities that are intently underway,” added Mr. Carrazza.

The loan pipeline remains strong and continued growth is expected.  Patriot’s net interest margin was 3.50% for the first quarter, as compared to 3.75% in the prior quarter and 3.76% in the first quarter of 2016. Net interest income decreased by $343,000, or 6%, as compared to the 4th quarter of 2016, and increased by $109,000, or 2%, compared to the 1st  quarter of 2016.   

The decline from the fourth quarter reflects the full quarter impact of interest paid on long-term senior debt issued in December of 2016 and also reflects a timing mis-match between loan attrition early in the quarter and new loans that closed late in the quarter.

The provision for loan losses in the quarter was a net credit of $1,749,000, reflecting the previously noted recovery, partially offset by a $1.1 million addition to the Allowance for Loan Loss to reflect the growth in the end of period loan balance. The provision for loan losses was $150,000 in the 4th quarter of 2016 and zero in the 1st quarter of 2016.   

Non-interest income decreased by $91,000 or 25%, over last quarter and $133,000, or 32%, below the same period last year.  Both comparisons were impacted by a loss of $78,000 recognized on the sale of investment portfolio securities, as the portfolio was intentionally re-positioned to provide future enhancements to profitability.

Non-interest expense increased $280,000, or 6%, over last quarter and declined by $70,000, or 1% compared to the 1st quarter of 2016. 

As of March 31, 2017 shareholders’ equity was $64.4 million, an increase of $1.8 million over December 31, 2016, at $62.6 million. This was a direct result of the reported net income of the first quarter of 2017. The Company’s book value per share increased to $16.55 at March 31, 2017 as compared to $16.08 at December 31, 2016 and $15.75 at March 31, 2016.

The Bank’s capital ratios continue to be strong, as the Bank maintained its “well capitalized” regulatory status.  As of March 31, 2017 Tier 1 leverage ratio was 10.65%, Tier 1 risk based capital was 11.09% and total risk based capital was 11.96%.   

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
  Mar 31, 2017 Dec 31, 2016 Mar 31, 2016
           
Assets       
           
Noninterest bearing deposits and cash  $  5,086  $  2,596  $  2,931 
Interest bearing deposits      55,180     89,693     64,075 
 Total cash and cash equivalents    60,266     92,289     67,006 
           
Securities-available for sale      21,201     24,428     28,735 
Other investments       4,450     4,450     4,450 
 Total investment securities     25,651     28,878     33,185 
           
FRB & FHLB stock     7,847     7,718     8,669 
Gross loans     630,727     581,657     485,183 
Allowance for loan losses      (5,697)    (4,675)    (5,247)
 Net loans      625,030     576,982     479,936 
           
Accrued interest and dividends receivable    3,063     2,726     2,075 
Premises and equipment, net     33,442     32,759     29,790 
Other real estate owned      851     851     -  
Deferred tax asset, net      11,691     12,632     13,354 
Other assets       6,921     1,819     1,566 
 Total Assets   $   774,762   $   756,654   $   635,581  
           
Liabilities and Shareholders' Equity       
           
Deposits       
 Noninterest bearing deposits $  78,372  $  76,772  $  80,594 
 Interest bearing deposits     482,587     452,552     343,361 
         560,959     529,324     423,955 
           
FHLB advances     124,000     123,000     134,900 
Other short term borrowings      -      15,000     -  
Note Payable - long term senior debt     11,647     11,628     -  
Subordinated debt     8,080     8,079     8,074 
Note Payable     1,722     1,769     1,908 
Mortgage escrow deposits      1,755     2,676     1,666 
Accrued expenses and other liabilities     2,156     2,608     2,771 
  Total Liabilities     710,319      694,084      573,275  
           
Common stock     40     40     40 
Treasury stock     (1,177)    (1,177)    (160)
Additional paid-in capital      106,773     106,729     106,722 
Accumulated deficit      (41,172)    (42,902)    (44,178)
Accumulated other comprehensive loss    (21)    (120)    (117)
  Total Shareholders' Equity    64,443      62,570      62,306  
           
 Total Liabilities and Shareholders' Equity   $   774,762   $   756,654   $   635,581  
           

 

         
PATRIOT NATIONAL BANCORP, INC.
 
STATEMENTS OF OPERATIONS
 
(Unaudited)   Three Months Ended 
Dollars in thousands, except per share data Mar 31, 2017 Dec 31, 2016 Mar 31, 2016 
            
Interest and dividend income         
 Interest and fees on  loans  $  6,607  $  6,579 $  5,840 
 Interest on investment securities    171     140    142 
 Dividends on investment securities    82     90    86 
 Other interest income     64     25    41 
  Total interest and dividend income   6,924     6,834    6,109 
            
Interest expense          
 Interest on deposits     989     724    473 
 Interest on Federal Home Loan Bank borrowings     78     113    121 
 Interest on Note Payable - long term senior debt   229     25    -  
 Interest on subordinated debt     85     84    82 
 Interest on other borrowings     9     11    8 
  Total interest expense    1,390     957    684 
            
  Net interest income    5,534      5,877     5,425  
            
(Credit) provision for loan losses     (1,749)    150    -  
            
  Net interest income after (credit)      
  provision for loan losses    7,283     5,727    5,425 
            
Non-interest income         
 Loan application, inspection and processing fees   21     28    67 
 Fees and service charges     149     149    151 
 Rental Income      94     103    103 
 Loss on sale of investment securities    (78)    -     -  
 Other income      91     88    89 
  Total non-interest income    277      368     410  
            
Non-interest expense         
 Salaries and benefits     2,430     2,155    2,550 
 Occupancy and equipment expense    775     797    780 
 Data processing      120     125    285 
 Professional services and other outside services   652     565    409 
 Advertising and promotional expenses    74     53    117 
 Loan administration and processing expenses   9     24    8 
 Regulatory assessments     179     151    147 
 Insurance expense      59     54    55 
 Material and communications     87     88    93 
 Other operating expenses     309     402    320 
  Total non-interest expense    4,694      4,414     4,765  
            
  Income before income taxes    2,866     1,681    1,070 
Expense for Income taxes      1,136     636    418 
  Net income  $   1,730   $   1,045  $   651  
            
  Basic income per share  $  0.44  $  0.27 $  0.17 
  Diluted income per share $  0.44  $  0.27 $  0.16 
            

 

           
PATRIOT NATIONAL BANCORP, INC.
FINANCIAL RATIOS AND OTHER DATA
(Unaudited)
Dollars in thousands, except per share data
           
      Mar 31, 2017 Dec 31, 2016 Mar 31, 2016
Asset Quality:      
    Nonaccrual loans  $  1,812  $  1,821  $  5,409 
    Other real estate owned    851     851     -  
   Total nonperforming assets$  2,663  $  2,672  $  5,409 
           
           
  Nonaccrual loans / loans  0.29%  0.31%  1.11%
  Nonperforming assets / assets 0.34%  0.35%  0.85%
  Allowance for loan losses $  5,697  $  4,675  $  5,247 
  Allowance for loan losses / loans 0.90%  0.80%  1.08%
  Allowance / nonaccrual loans 314.4%  256.7%  97.0%
  Gross loan charge-offs for the quarter$  -   $  2,935  $  5 
  Gross loan (recoveries) for the quarter$  (2,771) $  (132) $  (10)
  Net loan charge-offs (recoveries) for the quarter  $  (2,771) $  2,803  $  (6)
           
           
Capital Data:      
  Book value per share (1) $  16.55  $  16.08  $  15.75 
  Shares outstanding    3,894,128     3,891,897     3,956,207 
           
           
(1)  Book value per share represents shareholders' equity divided by outstanding shares. 

            

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