Exhibit 99.1
Contacts: | |||
Patriot Bank, N.A. | Richard Muskus | Joseph Perillo | Michael Carrazza |
900 Bedford Street | President | Chief Financial Officer | CEO and Chairman |
Stamford, CT 06901 | 203-252-5939 | 203-252-5954 | 203-251-8230 |
www.BankPatriot.com |
Patriot National Bancorp Net Income Breaks $1 Million Milestone
in the Third Quarter; Declares Quarterly Dividend
- - - - -
Efforts yield significant 26% earnings climb, while assets increase to $826 million.
CEO says, “We can do even better!”
STAMFORD, CT – October 31, 2017 (GLOBE NEWSWIRE) – Patriot National Bancorp, Inc. (“Patriot”, “Bancorp”) (NASDAQ: PNBK), the parent company of Patriot Bank, N.A. (the “Bank”), today announced another milestone achievement with quarterly pre-tax earnings of $1.7 million and quarterly net income exceeding $1.0 million, or $0.26 per fully diluted share.
The $1 million net income compares to net income of $804 thousand, $0.21 per fully diluted share, in the second quarter of 2017 and $814 thousand, $0.21 per share, for the same quarter a year ago. For the nine months ended September 30, 2017 net income was $3.5 million, or $0.91 per diluted share, compared with $885 thousand, or $0.22 per fully diluted share, for the corresponding 2016 period.
Patriot Bank’s deposits continued to rise and are now up 28% year-over-year, with loan growth of 5% for the quarter and 27% from the year prior, fueling a strong growth in net interest income. Net interest income climbed 23% from the corresponding 2016 period and for 2017 is 14% higher than in the nine-month period ending September 30, 2016.
In addition to the announcement of quarterly earnings, Patriot also announced today the declaration of its second consecutive quarterly dividend of $0.01 per fully diluted share. The record date for this quarterly dividend will be October 29, 2017, with a dividend payment date of November 10, 2017.
CEO Michael Carrazza stated: “This quarter’s milestone is further confirmation of the steady progress we expect to achieve from the operational disciplines put in place and management’s focus on growth and value accretion. While pleased in reaching these milestones, content we are not. Internal mandates have been set to materially beat third quarter performance and further enhance key operating metrics in the fourth quarter. The expected closing of our acquisition of Prime Bank will further add to our earnings momentum.”
Announced last week, Prime Bank shareholders voted in favor of its merger with Patriot. As of June 30, 2017, Prime had approximately $73 million in total assets, $56 million in deposits and $28 million in total loans. Closing is pending receipt of regulatory approvals, which is targeted before year-end.
Richard Muskus, Patriot’s President added, “We have created greater capacity to build a high quality loan portfolio, achieve critical mass in attractive product lines and enhance service offerings to our customers. These are the primary areas of focus and will continue to add to our profitability and franchise value.”
The comparative results for the first nine months of 2016 and 2017 include the impact of a troubled loan that was ultimately resolved. In the second quarter of 2016, the Bank recorded a significant loan loss provision, but aggressively worked towards a recovery, which was successfully accomplished in the first quarter of 2017.
Excluding the impact of the loan loss provision, which primarily consisted of losses and recoveries related to this loan, net income for the nine-month period ending September 30, 2017 was 30% higher than the same period in 2016. These results are the by-product of aggressive value-enhancing strategies that have been underway over the past year.
The strong earnings performance is attributable to significant loan growth, while operating expenses have remained under tight control.
In the year since September 30, 2016, total assets increased by $144 million (21%), up from $682 million. Loans totaled $710 million as of September 30, 2017, up 5% from the $679 million reported June 30, 2017, and up 27% from the $560 million reported September 30, 2016.
Deposits increased during the quarter to $605 million and were up 28% year-over-year as compared with $471 million at the end of the third quarter of 2016. Deposit growth remains a key initiative to keep pace with Patriot’s overall growth prospects.
Net interest income was $7.1 million in the quarter, up 12% from the second quarter 2017 and up 23% from the corresponding 2016 period. Net interest income of $18.9 million in the year-to-date period was 14% higher than the $16.5 million in the nine month period ending September 30, 2016. Net interest margin was 3.65% for the quarter and 3.59% for the 2017 year-to-date period, as compared to 3.61 % in the prior quarter and 3.79% in the first nine months of 2016.
The provision for loan losses in the quarter was $545 thousand, reflecting the growth in loans with overall credit quality remaining strong. The year-to-date credit in the provision of $944 thousand reflects the previously noted recovery. The provision for loan losses was $355 thousand in the third quarter of 2016 and $2.3 million for the nine months ended September 30, 2016.
Non-interest income was $386 thousand in the quarter, 10% higher than the prior quarter. Year-to-date non-interest income of $1 million was 15% lower than the prior year, primarily due to the loss on security sales of $78 thousand recognized in the first quarter, as the portfolio was intentionally re-positioned to provide future enhancements to profitability.
Non-interest expense increased 4%, over the prior quarter and year-to-date non-interest expenses increased 7% over the same period in 2016.
As of September 30, 2017 shareholders’ equity was $66.3 million, an increase of $3.7 million from a year ago. The Company’s book value per share increased to $17.02 at September 30, 2017 as compared to $15.80 a year ago.
The Bank’s capital ratios continue to be strong, as the Bank maintained its “well capitalized” regulatory status. As of September 30, 2017, Tier 1 leverage ratio was 9.57%, Tier 1 risk based capital was 10.69% and total risk based capital was 11.55%.
* * * * *
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. Dollars in thousands |
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| September, 30 | June 30, | September 30, | ||||||||||
2017 | 2017 | 2016 | ||||||||||
Assets | ||||||||||||
Noninterest bearing deposits and cash | $ | 3,337 | $ | 3,210 | $ | 2,479 | ||||||
Interest bearing deposits | 25,075 | 7,633 | 43,035 | |||||||||
Total cash and cash equivalents | 28,412 | 10,843 | 45,514 | |||||||||
Securities-available for sale | 29,586 | 24,981 | 23,374 | |||||||||
Other investments | 4,450 | 4,450 | 4,450 | |||||||||
Total investment securities | 34,036 | 29,431 | 27,824 | |||||||||
FRB & FHLB stock | 8,813 | 8,257 | 7,818 | |||||||||
Gross loans | 710,118 | 679,088 | 560,150 | |||||||||
Allowance for loan losses | (6,222 | ) | (5,944 | ) | (7,328 | ) | ||||||
Net loans | 703,896 | 673,144 | 552,822 | |||||||||
Accrued interest and dividends receivable | 3,501 | 3,208 | 2,308 | |||||||||
Premises and equipment, net | 34,713 | 34,471 | 30,850 | |||||||||
Other real estate owned | 851 | 851 | 851 | |||||||||
Deferred tax asset, net | 10,686 | 11,212 | 13,340 | |||||||||
Other assets | 1,823 | 2,003 | 1,589 | |||||||||
Total Assets | $ | 826,731 | $ | 773,420 | $ | 682,916 | ||||||
Liabilities and Shareholders' Equity | ||||||||||||
Deposits | ||||||||||||
Noninterest bearing deposits | $ | 76,875 | $ | 77,778 | $ | 77,289 | ||||||
Interest bearing deposits | 528,539 | 484,261 | 393,881 | |||||||||
| 605,414 | 562,039 | 471,170 | ||||||||||
FHLB advances | 130,000 | 120,000 | 135,000 | |||||||||
Note Payable - long term senior debt | 11,684 | 11,666 | - | |||||||||
Subordinated debt | 8,085 | 8,082 | 8,078 | |||||||||
Note Payable | 1,627 | 1,675 | 1,815 | |||||||||
Mortgage escrow deposits | 1,799 | 3,111 | 1,478 | |||||||||
Accrued expenses and other liabilities | 1,812 | 1,547 | 2,793 | |||||||||
Total Liabilities | 760,421 | 708,120 | 620,334 | |||||||||
Common stock | 40 | 40 | 40 | |||||||||
Treasury stock | (1,179 | ) | (1,177 | ) | (167 | ) | ||||||
Additional paid-in capital | 106,834 | 106,797 | 106,694 | |||||||||
Accumulated deficit | (39,394 | ) | (40,368 | ) | (43,947 | ) | ||||||
Accumulated other comprehensive gain (loss) | 9 | 8 | (38 | ) | ||||||||
Total Shareholders' Equity | 66,310 | 65,300 | 62,582 | |||||||||
Total Liabilities and Shareholders' Equity | $ | 826,731 | $ | 773,420 | $ | 682,916 | ||||||
PATRIOT NATIONAL BANCORP, INC. |
| Dollars in thousands, except per share data |
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Interest and dividend income | ||||||||||||||||||||
Interest and fees on loans | $ | 8,522 | $ | 7,591 | 6,188 | $ | 22,720 | $ | 17,811 | |||||||||||
Interest on investment securities | 275 | 242 | 131 | 688 | 405 | |||||||||||||||
Dividends on investment securities | 105 | 93 | 88 | 280 | 264 | |||||||||||||||
Other interest income | 65 | 19 | 25 | 148 | 94 | |||||||||||||||
Total interest and dividend income | 8,967 | 7,945 | 6,432 | 23,836 | 18,574 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | 1,339 | 1,129 | 549 | 3,457 | 1,518 | |||||||||||||||
Interest on Federal Home Loan Bank borrowings | 248 | 183 | 73 | 509 | 258 | |||||||||||||||
Interest on Note Payable - long term senior debt | 229 | 228 | - | 686 | - | |||||||||||||||
Interest on subordinated debt | 92 | 89 | 85 | 266 | 250 | |||||||||||||||
Interest on other borrowings | 7 | 8 | 9 | 24 | 25 | |||||||||||||||
Total interest expense | 1,915 | 1,637 | 716 | 4,942 | 2,051 | |||||||||||||||
Net interest income | 7,052 | 6,308 | 5,716 | 18,894 | 16,523 | |||||||||||||||
Provision (credit) for loan losses | 545 | 260 | 355 | (944 | ) | 2,314 | ||||||||||||||
Net interest income after (credit) provision for loan losses | 6,507 | 6,048 | 5,361 | 19,838 | 14,209 | |||||||||||||||
Non-interest income | ||||||||||||||||||||
Loan application, inspection and processing fees | 25 | 15 | 64 | 61 | 152 | |||||||||||||||
Fees and service charges | 149 | 146 | 150 | 444 | 451 | |||||||||||||||
Rental Income | 117 | 91 | 104 | 302 | 311 | |||||||||||||||
Loss on sale of investment securities | - | - | - | (78 | ) | - | ||||||||||||||
Other income | 95 | 97 | 94 | 283 | 273 | |||||||||||||||
Total non-interest income | 386 | 349 | 412 | 1,012 | 1,187 | |||||||||||||||
Non-interest expense | ||||||||||||||||||||
Salaries and benefits | 2,741 | 2,497 | 2,169 | 7,668 | 7,334 | |||||||||||||||
Occupancy and equipment expense | 796 | 807 | 783 | 2,378 | 2,313 | |||||||||||||||
Data processing | 340 | 326 | 288 | 786 | 814 | |||||||||||||||
Professional services and other outside services | 449 | 550 | 409 | 1,651 | 1,182 | |||||||||||||||
Advertising and promotional expenses | 81 | 111 | 128 | 266 | 341 | |||||||||||||||
Loan administration and processing expenses | 22 | 14 | 14 | 45 | 30 | |||||||||||||||
Regulatory assessments | 230 | 163 | 159 | 572 | 453 | |||||||||||||||
Insurance expense | 66 | 56 | 57 | 181 | 168 | |||||||||||||||
Material and communications | 97 | 103 | 106 | 287 | 314 | |||||||||||||||
Other operating expenses | 400 | 387 | 328 | 1,096 | 992 | |||||||||||||||
Total non-interest expense | 5,222 | 5,014 | 4,441 | 14,930 | 13,941 | |||||||||||||||
Income before income taxes | 1,671 | 1,383 | 1,332 | 5,920 | 1,455 | |||||||||||||||
Expense for Income taxes | 658 | 579 | 518 | 2,373 | 570 | |||||||||||||||
Net income | $ | 1,013 | $ | 804 | $ | 814 | $ | 3,547 | $ | 885 | ||||||||||
Basic income per share | $ | 0.26 | $ | 0.21 | $ | 0.21 | $ | 0.91 | $ | 0.22 | ||||||||||
Diluted income per share | $ | 0.26 | $ | 0.21 | $ | 0.21 | $ | 0.91 | $ | 0.22 | ||||||||||
PATRIOT NATIONAL BANCORP, INC.
FINANCIAL RATIOS AND OTHER DATA
(Unaudited)
Dollars in thousands, except shares outstanding and per share data
Quarter Ended | ||||||||||||
September 30, 2017 | June 30, 2017 | September 30, 2016 | ||||||||||
Quarterly Performance Data: | ||||||||||||
Net Income | $ | 1,013 | $ | 804 | $ | 814 | ||||||
Return on Average Assets | 0.49 | % | 0.43 | % | 0.51 | % | ||||||
Return on Average Equity | 6.05 | % | 4.95 | % | 5.17 | % | ||||||
Net Interest Margin | 3.65 | % | 3.61 | % | 3.85 | % | ||||||
Efficiency Ratio | 70 | % | 75 | % | 72 | % | ||||||
Qtr % increase loans | 5 | % | 8 | % | 6 | % | ||||||
Qtr % increase deposits | 8 | % | 0 | % | 6 | % | ||||||
Asset Quality: | ||||||||||||
Nonaccrual loans | $ | 2,051 | $ | 1,859 | $ | 4,751 | ||||||
Other real estate owned | 851 | 851 | 851 | |||||||||
Total nonperforming assets | $ | 2,902 | $ | 2,710 | $ | 5,602 | ||||||
Nonaccrual loans / loans | 0.29 | % | 0.27 | % | 0.85 | % | ||||||
Nonperforming assets / assets | 0.35 | % | 0.35 | % | 0.82 | % | ||||||
Allowance for loan losses | $ | 6,222 | $ | 5,944 | $ | 7,328 | ||||||
Allowance for loan losses / loans | 0.88 | % | 0.88 | % | 1.31 | % | ||||||
Allowance / nonaccrual loans | 303.4 | % | 319.7 | % | 154.2 | % | ||||||
Gross loan charge-offs for the quarter | $ | 275 | $ | 13 | $ | 238 | �� | |||||
Gross loan (recoveries) for the quarter | $ | (8 | ) | $ | - | $ | (2 | ) | ||||
Net loan charge-offs (recoveries) for the quarter | $ | 267 | $ | 13 | $ | 236 | ||||||
Capital Data and Capital Ratios | ||||||||||||
Book value per share (1) | $ | 17.02 | $ | 16.77 | $ | 15.80 | ||||||
Shares outstanding | 3,895,720 | 3,894,128 | 3,959,903 | |||||||||
Bank Capital Ratios: | ||||||||||||
Leverage Ratio | 9.57 | % | 9.97 | % | 9.68 | % | ||||||
Tier 1 Capital | 10.69 | % | 10.73 | % | 10.34 | % | ||||||
Total Risk Based Capital | 11.55 | % | 11.59 | % | 11.59 | % | ||||||
(1) Book value per share represents shareholders' equity divided by outstanding shares.
Reconciliation Table, Non-GAAP to GAAP:
Patriot Bancorp believes that the Net Income Excluding Loan Loss Provision is useful in the assessment of financial performance because it negates the impart of loan losses and recoveries associated with the settlement of a single troubled loan.
| Quarter Ended | Nine Months Ended September 30, | ||||||||||||||||||
| Net Income excluding Loan Loss Provision | September 30, 2017 | June 30, 2017 | September 30, 2016 | 2017 | 2016 | |||||||||||||||
Net Income reported | $ | 1,013 | $ | 804 | $ | 814 | $ | 3,547 | $ | 885 | ||||||||||
Tax Provision (Benefit) | $ | 658 | $ | 579 | $ | 518 | $ | 2,373 | $ | 570 | ||||||||||
Loan Loss Provision | $ | 545 | $ | 260 | $ | 355 | $ | (944 | ) | $ | 2,314 | |||||||||
Effective tax rate | 39.38 | % | 41.87 | % | 38.89 | % | 40.08 | % | 39.18 | % | ||||||||||
Pre-Tax Income Reported | $ | 1,671 | $ | 1,383 | $ | 1,332 | $ | 5,920 | $ | 1,455 | ||||||||||
Pre-tax Income excluding loan loss provision | $ | 2,216 | $ | 1,643 | $ | 1,687 | $ | 4,976 | $ | 3,769 | ||||||||||
Net Income excluding loan loss provision | $ | 1,343 | $ | 955 | $ | 1,031 | $ | 2,981 | $ | 2,292 | ||||||||||