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


Contact: Patriot Bank, N.A. 900 Bedford Street Stamford, CT 06901 www.BankPatriot.com Michael Carrazza CEO & Chairman 203-251-8230 Neil M. McDonnell EVP & CFO 203-252-5938

Source:Patriot National Bancorp, Inc.