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Patriot National Bancorp Announces Strong Second Quarter Results

STAMFORD, Conn., July 27, 2015 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. ("Patriot" or the "Company") (NASDAQ:PNBK), the parent company of Patriot National Bank (the "Bank"), today announced financial results for its second quarter ended June 30, 2015.

Patriot reported net income for the second quarter of 2015 of $689,000, or $0.17 per diluted share, compared to $525,000, or $0.13 per diluted share, a year ago and compared to $289,000, or $0.07 per diluted share, last quarter. Pretax income in the second quarter was $1,141,000 compared with $525,000 for the same quarter of last year, a 117% improvement. Compared to last quarter net income increased 138%. Kenneth T. Neilson, President and CEO commented that "this quarter's progress is the result of decisions and strategies developed and implemented in 2014. We continue to focus on working to improve every aspect of our operation."

Michael Carrazza, Chairman, stated that "given our financial progress and healthy condition, we are actively exploring strategic activities in order to increase shareholder value."

Net interest income increased by $1,315,000, or 32%, compared to the second quarter of last year and by $372,000, or 7%, compared to the first quarter of this year. The growth in net interest income was the result of loan growth along with an expanded net interest margin. Patriot's net interest margin for the second quarter of 2015 was 3.73% compared to 3.31% in the second quarter of 2014 and 3.49% last quarter.

No provision for loan losses was made in the second quarter as asset quality continues to be strong and Patriot's Reserve for Loan Losses is 10 times total nonperforming loans. Patriot had no charge-offs and a net recovery of $15,000 in the second quarter of 2015.

Non-interest income decreased by $172,000 from the second quarter of 2014 and increased by $57,000 from the first quarter of this year. The decrease from the comparable period last year is primarily the result of no Bank Owned Life Insurance ("BOLI") income due to the fourth quarter 2014 disposal of the BOLI investment and to lower overdraft fees. The improvement from the first quarter of this year is primarily the result of an increase in loan origination fees.

Non-interest expense in the second quarter of 2015 increased by $527,000, or 12%, compared to the second quarter of 2014 with 80% of that increase being in salaries and benefits as Patriot strengthened its management team and established a bonus program. The additional staff will also help reduce consulting expenses in future periods. Compared to last quarter non-interest expense increased by $28,000, or less than one percent.

For the six months ended June 30, 2015, Patriot reported net income of $978,000 ($0.25 basic and diluted income per share), an increase of $134,000, or 16%, compared to net income of $844,000 ($0.22 basic and diluted income per share) for the six months ended June 30, 2014. On a pretax basis Patriot earned $1,631,000 in the current year-to-date period, a 93% improvement over the same period last year.

At June 30, 2015 total assets were $629 million compared to $647 million at March 31, 2015 and $552 million at June 30, 2014. Net loans totaled $489 million at June 30, 2015 compared to $494 million at March 31, 2015 and $403 million at June 30, 2014. Deposits were $457 million at June 30, 2015 and March 31, 2015 and $426 million at June 30, 2014. The deposit mix continues to improve as non-interest bearing deposits grow and become a larger portion of total deposits. Patriot's total cost of deposits was 0.45% for the quarter as compared to 0.49% in the prior quarter and 0.57% in the quarter ended June 30, 2014.

Asset quality has continued to improve. Nonperforming loans totaled $511,000 at June 30, 2015 and Patriot has had no Other Real Estate Owned ("OREO") on its books for four consecutive quarters. At June 30, 2015 Patriot's Allowance for Loan Losses provided better than ten times coverage of nonperforming loans and the Company has experienced three consecutive quarters of net recoveries.

At June 30, 2015 shareholders' equity was $60.1 million compared to $59.3 million at March 31, 2015 and $43.3 million a year ago. The Company's tangible book value per share was $15.19 at June 30, 2015 compared to $15.00 at March 31, 2015 and $11.06 at June 30, 2014. Patriot's leverage capital ratio was 9.44% as of June 30, 2015. Its Common Equity Tier I Capital ratio was 10.17%. The Tier I Risk Based Capital ratio was 11.80% and the total Risk-based Capital Ratio was 12.86%. These regulatory capital ratios all exceed those necessary to be considered a well-capitalized institution under Federal guidelines.

"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 STATEMENTS OF OPERATIONS
(Unaudited) Three Months Ended Six Months Ended
Dollars in thousands, except per share data June 30, 2015 Mar. 31, 2015 June 30, 2014 June 30, 2015 June 30, 2014
Interest and dividend income
Interest and fees on loans $ 5,924 $ 5,546 $ 4,667 $ 11,470 $ 9,358
Interest on investment securities 119 116 133 235 268
Dividends on investment securities 60 57 42 117 83
Other interest income 17 29 14 46 26
Total interest and dividend income 6,120 5,748 4,856 11,868 9,735
Interest expense
Interest on deposits 513 529 607 1,042 1,244
Interest on Federal Home Loan Bank borrowings 85 71 33 156 66
Interest on subordinated debt 73 71 82 144 282
Total interest expense 671 671 722 1,342 1,592
Net interest income 5,449 5,077 4,134 10,526 8,143
Provision for loan losses -- 250 -- 250 --
Net interest income after provision for loan losses 5,449 4,827 4,134 10,276 8,143
Non-interest income
Loan application, inspection and processing fees 105 50 100 155 166
Fees and service charges 147 174 233 321 452
Earnings on cash surrender value of life insurance -- -- 116 -- 237
Other income 199 170 174 369 361
Total non-interest income 451 394 623 845 1,216
Non-interest expense
Salaries and benefits 2,395 2,344 1,976 4,739 3,947
Occupancy and equipment expense 909 955 865 1,864 1,787
Data processing 255 250 279 505 529
Professional services and other outside services 391 569 457 960 928
Advertising and promotional expenses 137 50 73 187 124
Loan administration and processing expenses 7 22 19 29 36
Regulatory assessments 157 154 237 311 467
Insurance expense 83 81 78 164 175
Other real estate operations -- -- (4) -- 12
Material and communications 106 81 84 187 177
Other operating expenses 319 225 168 544 333
Total non-interest expense 4,759 4,731 4,232 9,490 8,515
Income before income taxes 1,141 490 525 1,631 844
Provision for income taxes 452 201 -- 653 --
Net income $ 689 $ 289 $ 525 $ 978 $ 844
Basic income per share (1) $ 0.18 $ 0.07 $ 0.14 $ 0.25 $ 0.22
Diluted income per share (1) $ 0.17 $ 0.07 $ 0.13 $ 0.25 $ 0.22
(1) Income per share for 2014 has been restated for a 1-for-10 reverse stock split which took effect on March 4, 2015.
PATRIOT NATIONAL BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dollars in thousands June 30, 2015 Mar. 31, 2015 June 30, 2014
Assets
Cash and due from banks:
Noninterest bearing deposits and cash $ 2,892 $ 2,080 $ 1,584
Interest bearing deposits 50,201 63,878 58,345
Total cash and cash equivalents 53,093 65,958 59,929
Securities:
Securities-available for sale 31,640 32,738 35,686
Other investments 4,450 4,450 4,450
FRB & FHLB stock 8,648 8,648 5,660
Total securities 44,738 45,836 45,796
Gross loans 493,913 499,359 408,000
Allowance for loan losses (5,208) (5,193) (5,214)
Net loans 488,705 494,166 402,786
Accrued interest and dividends receivable 2,034 1,974 1,555
Premises and equipment, net 24,703 23,056 18,227
Cash surrender value of life insurance -- -- 22,262
Deferred tax asset, net (1) 14,221 14,621 --
Other assets 1,407 1,495 1,498
Total Assets $ 628,901 $ 647,106 $ 552,053
Liabilities and Shareholders' Equity
Deposits
Noninterest bearing deposits $ 79,774 $ 70,331 $ 61,685
Interest bearing deposits 377,681 386,776 364,747
457,455 457,107 426,432
FHLB advances and repurchase agreements 100,000 120,000 72,000
Subordinated debt 8,248 8,248 8,248
Accrued expenses and other liabilities 3,121 2,450 2,057
Total Liabilities 568,824 587,805 508,737
Common stock 396 396 392
Treasury stock (160) (160) (160)
Additional paid-in capital 105,979 105,865 105,610
Accumulated deficit (45,997) (46,686) (61,840)
Accumulated other comprehensive loss (141) (114) (686)
Total Shareholders' Equity 60,077 59,301 43,316
Total Liabilities and Shareholders' Equity $ 628,901 $ 647,106 $ 552,053
(1) At June 30, 2014, balance includes the deferred tax asset and a full valuation allowance of $17.6 million.
PATRIOT NATIONAL BANCORP, INC.
FINANCIAL RATIOS AND OTHER DATA
(Unaudited)
Dollars in thousands, except per share data
June 30, 2015 Mar. 31, 2015 June 30, 2014
Asset Quality:
Nonaccrual loans $ 511 $ 515 $ 13,911
Other real estate owned -- -- --
Total nonperforming assets $ 511 $ 515 $ 13,911
Nonaccrual loans / loans 0.10% 0.10% 3.41%
Nonperforming assets / assets 0.08% 0.08% 2.52%
Allowance for loan losses $ 5,208 $ 5,193 $ 5,214
Allowance for loan losses / loans 1.05% 1.04% 1.28%
Allowance / nonaccrual loans 1019.18% 1008.35% 37.48%
Gross loan charge-offs for the quarter $ -- $ 10 $ 285
Gross loan recoveries for the quarter 15 29 19
Net loan charge-offs for the quarter $ (15) $ (19) $ 266
Capital Data:
Book value per share (1) $ 15.19 $ 15.00 $ 11.06
Tangible book value per share (2) $ 15.19 $ 15.00 $ 11.06
Shares outstanding 3,953,949 3,953,949 3,916,063
(1) Book value per share represents shareholders' equity divided by outstanding shares.
(2) Tangible book value per share represents shareholders' equity less intangible assets divided by outstanding shares.

CONTACT: Patriot National Bank 900 Bedford Street Stamford, CT 06901 Kenneth T. Neilson President & CEO 203-252-5962 Christina L. Maier EVP & CFO 203-252-5901

Source:Patriot National Bancorp, Inc.