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Patriot National Bancorp Announces Second Quarter Earnings of $0.16 Per Share; Loans Grow 9% Since Prior Quarter

STAMFORD, Conn., July 29, 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 net income of $614,000 for the second quarter, or $0.16 diluted income per share. This is compared to $689,000 a year ago, or $0.18 diluted income per share. In the first quarter of 2016, the Company reported $653,000 net income, or $0.16 diluted income per share.

As of June 30, 2016, total assets have increased to $653 million (up 2.7%), compared to $636 million at March 31, 2016 and $629 million at June 30, 2015. Net loans totaled $523 million (up 9%) at June 30, 2016 compared to $480 million at March 31, 2016 and $489 million at June 30, 2015.

Kenneth T. Neilson, President and CEO stated, “Growth has, and will continue to be, our primary focus. We have spent the last few years building a solid banking infrastructure, which has given us the foundation to confidently go forward with building our brand, hiring and training additional staff, creating and delivering a best-in-class customer experience, and showing by doing in the communities we serve.”

Michael Carrazza, Chairman said, “We continue to look for opportunities to better leverage our infrastructure and improve our returns.”

Net interest income before provision for loan losses decreased by $43,000, or less than one percent, compared to the first quarter of 2016 and decreased by $67,000, or 1.2%, as compared to the second quarter of 2015. The decline in net interest income this quarter, over the prior year’s second quarter and the current year’s previous quarter, is the result of a decrease in loan prepayment fees as the trend of fewer loan prepayments continues. Patriot’s loan portfolio actually increased by $43 million during the second quarter. The loan pipeline remains strong and continued growth is expected. Patriot’s net interest margin was 3.69% for the second quarter compared to 3.76% in the prior quarter and 3.73% in the second quarter of 2015.

No provisions for loan losses have been recorded since the first quarter of 2015. The credit quality of our portfolio and continued improvement in regional economic trends has allowed us to avoid increasing reserves. The Company has now experienced seven consecutive quarters of net loan recoveries.

Non-interest income decreased by $45,000, or 11%, over last quarter and by $86,000, or 19%, over the same period last year. Fewer loan fees in the second quarter of 2016 were the primary cause of these decreases.

Non-interest expense in the second quarter of 2016 decreased $28,000, or 1%, compared to the first quarter of 2016 which is on target with the Company’s business plan. Compared to the second quarter of 2015, non-interest expenses declined by $23,000 as a result of continued cost control.

Deposits were $449 million (up 5.4%) at June 30, 2016 compared to $426 million at March 31, 2016 and $457 million at June 30, 2015. Deposit growth initiatives are in place to increase deposits.

As of June 30, 2016, shareholders’ equity was $63.1 million compared to $62.3 million at March 31, 2016 and $60.1 million a year ago. The Company’s book value per share was $15.94 at June 30, 2016 compared to $15.75 at March 31, 2016 and $15.19 at June 30, 2015.

The Bank’s capital ratios continue to be strong as the Bank maintained its “well capitalized” regulatory status. As of June 30, 2016, Tier 1 leverage ratio was 10.13%, Tier 1 risk based capital was 11.21% and total risk based capital was 12.16%.

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 thousandsJune 30, 2016 March 31, 2016 June 30, 2015
Assets
Noninterest bearing deposits and cash$ 2,893 $ 2,931 $ 2,892
Interest bearing deposits 43,594 64,075 50,201
Total cash and cash equivalents 46,487 67,006 53,093
Securities-available for sale 23,037 28,735 31,640
Other investments 4,450 4,450 4,450
FRB & FHLB stock 7,982 8,669 8,648
Total securities 35,469 41,854 44,738
Gross loans 528,654 485,183 493,913
Allowance for loan losses (5,250) (5,247) (5,208)
Net loans 523,404 479,936 488,705
Accrued interest and dividends receivable 2,120 2,075 2,034
Premises and equipment, net 29,972 29,790 24,703
Other real estate owned 851 - -
Deferred tax asset, net 13,073 13,354 14,221
Other assets 1,679 1,740 1,407
Total Assets$ 653,055 $ 635,755 $ 628,901
Liabilities and Shareholders' Equity
Deposits
Noninterest bearing deposits$ 75,244 $ 79,483 $ 79,774
Interest bearing deposits 371,092 344,488 375,420
446,336 423,971 455,194
FHLB advances and repurchase agreements 128,000 134,900 100,000
Subordinated debt 8,248 8,248 8,248
Mortgage escrow deposits 2,451 1,666 2,261
Note Payable 1,846 1,893 -
Accrued expenses and other liabilities 3,064 2,771 3,121
Total Liabilities 589,945 573,449 568,824
Common stock 40 40 40
Treasury stock (160) (160) (160)
Additional paid-in capital 106,876 106,722 106,335
Accumulated deficit (43,565) (44,179) (45,997)
Accumulated other comprehensive loss (81) (117) (141)
Total Shareholders' Equity 63,110 62,306 60,077
Total Liabilities and Shareholders' Equity$ 653,055 $ 635,755 $ 628,901


PATRIOT NATIONAL BANCORP, INC.
STATEMENTS OF OPERATIONS
(Unaudited)Three Months Ended Six Months Ended
Dollars in thousands, except per share dataJune 30, 2016 March 31, 2016 June 30, 2015 June 30, 2016 June 30, 2015
Interest and dividend income
Interest and fees on loans$ 5,783 $ 5,840 $ 5,924 $ 11,623 $ 11,470
Interest on investment securities 132 142 119 274 235
Dividends on investment securities 90 86 60 176 117
Other interest income 28 41 17 69 46
Total interest and dividend income 6,033 6,109 6,120 12,142 11,868
Interest expense
Interest on deposits 496 473 513 969 1,042
Interest on Federal Home Loan Bank borrowings 64 121 85 185 156
Interest on subordinated debt 83 82 73 165 144
Interest on other borrowings 8 8 - 16 -
Total interest expense 651 684 671 1,335 1,342
Net interest income 5,382 5,425 5,449 10,807 10,526
Provision for loan losses - - - - 250
Net interest income after provision for loan losses 5,382 5,425 5,449 10,807 10,276
Non-interest income
Loan application, inspection and processing fees 21 67 105 88 155
Fees and service charges 150 151 147 301 321
Rental Income 104 103 110 207 198
Other income 90 89 89 179 171
Total non-interest income 365 410 451 775 845
Non-interest expense
Salaries and benefits 2,615 2,550 2,395 5,165 4,739
Occupancy and equipment expense 750 780 909 1,530 1,864
Data processing 241 285 255 526 505
Professional services and other outside services 364 409 391 773 960
Advertising and promotional expenses 96 117 137 213 187
Loan administration and processing expenses 8 8 7 16 29
Regulatory assessments 147 147 157 294 311
Insurance expense 56 55 83 111 164
Material and communications 115 93 106 208 187
Other operating expenses 344 320 319 664 544
Total non-interest expense 4,736 4,764 4,759 9,500 9,490
Income before income taxes 1,011 1,071 1,141 2,082 1,631
Expense for income taxes 397 418 452 815 653
Net income$ 614 $ 653 $ 689 $ 1,267 $ 978
Basic income per share (1)$ 0.16 $ 0.17 $ 0.18 $ 0.32 $ 0.25
Diluted income per share$ 0.16 $ 0.16 $ 0.18 $ 0.32 $ 0.25
(1) Basic income per share for the six months ended June 30, 2016 does not equal the sum of basic income per share for the first two quarters due to the effects of rounding.


PATRIOT NATIONAL BANCORP, INC.
FINANCIAL RATIOS AND OTHER DATA
(Unaudited)
Dollars in thousands, except per share data
June 30, 2016 March 31, 2016 June 30, 2015
Asset Quality:
Nonaccrual loans$ 4,790 $ 5,409 $ 511
Other real estate owned 851 - -
Total nonperforming assets$ 5,641 $ 5,409 $ 511
Nonaccrual loans / loans 0.91% 1.11% 0.10%
Nonperforming assets / assets 0.86% 0.85% 0.08%
Allowance for loan losses$ 5,250 $ 5,247 $ 5,208
Allowance for loan losses / loans 0.99% 1.08% 1.05%
Allowance / nonaccrual loans 109.6% 97.0% 1019.2%
Gross loan charge-offs for the quarter$ 2 $ 5 $ -
Gross loan (recoveries) for the quarter$ (4) $ (10) $ (15)
Net loan charge-offs (recoveries) for the quarter$ (2) $ (5) $ (15)
Capital Data:
Book value per share (1)$ 15.94 $ 15.75 $ 15.19
Shares outstanding 3,958,733 3,956,207 3,953,949
(1) Book value per share represents shareholders' equity divided by outstanding shares.


Contact: Patriot Bank, N.A. 900 Bedford Street Stamford, CT 06901 www.BankPatriot.com Kenneth T. Neilson President & CEO 203-252-5962 Neil M. McDonnell EVP & CFO 203-252-5938

Source:Patriot National Bancorp, Inc.