FOR IMMEDIATE RELEASE
April 15, 2003
CONTACT:
Richard A. Elko James G. Blume
President & C.E.O. Senior V.P. & C.F.O.
610-970-4627 610-970-4623
Patriot Bank Corp. Announces Increase in
First Quarter 2003 Earnings and
Diluted Earnings Per Share of Over 14%
Pottstown, PA, April 15, 2003 . . . Patriot Bank Corp.
(NASDAQ: PBIX), parent company of Patriot Bank, today announced
record earnings for the first quarter 2003 of $2,100,000 or $.31
per diluted share, adjusted for the recent 10% stock dividend
($.34 per diluted share prior to the stock dividend), compared to
earnings of $1,840,000 or $.27 per diluted share, adjusted for
the recent 10% stock dividend ($.30 per diluted share prior to
the stock dividend) for the first quarter of 2002.
Highlights of the quarter include:
- Over 14% growth in earnings and diluted earnings per
share
- Net interest margin increased to 3.68%
- Non-interest income up 59%
- Non-interest income increased to 25% of total income
- Efficiency ratio of 59.92%
- Return on average equity increased to 12.50%
- Non-performing assets decreased to .47% of total
assets
- Loan loss reserves to total loans increased to 1.20%
- Acquisition of two wealth management companies
- Formation of a Small Business Administration (SBA)
Lending Department
- Declaration of a special 10% stock dividend
"The first quarter was very productive for Patriot. Financial
results continued to be strong and we made significant progress
positioning the company for the future," said Richard A. Elko,
President and Chief Executive Officer.
Patriot's net interest margin improved to 3.68% for the
first quarter 2003, compared to 3.06% for the first quarter 2002.
"Patriot's commercial banking strategy produced continued success
increasing commercial loans and gathering core deposits. Net
interest margin has continued to improve as commercial loans
replace mortgage loans and as core deposits replace borrowings,"
continued Elko.
First quarter 2003 earnings included a provision for credit
losses of $1,100,000. Patriot's percentage of non-performing
assets to total assets was .47% at March 31, 2003, compared to
..67% at December 31, 2002. Patriot's percentage of all loans
delinquent 30 days or more to total loans was 1.69% at March 31,
2003, compared to 1.58% at December 31, 2002. "Despite a
challenging economy, Patriot has reduced its non-performing
assets and our market in general has not shown signs of
significant distress," said Elko.
Non-interest income was $2,646,000 for the first quarter
2003, compared to $1,661,000 for the first quarter 2002. During
the first quarter Patriot announced the acquisitions of Bonds &
Paulus Associates, Inc., and Pension Benefits, Inc. These
acquisitions have contributed to a 59% increase in non-interest
income. Both Bonds & Paulus and Pension Benefits have been
combined with Patriot Advisors, Patriot's wealth management
initiative. Additionally, during the first quarter Patriot
formed an SBA Lending Department. "Our already strong non-
interest income should benefit from Patriot's new SBA Lending
Department. Our plans include the sale of the guaranteed portion
of SBA loans to generate recurring non-interest income,"
continued Elko.
Non-interest expense was $6,681,000 for the first quarter
2003, compared to $5,333,000 for the first quarter 2002. The
increase in non-interest expense is primarily due to increases
in staffing associated with Patriot's two acquisitions.
Patriot's efficiency ratio was 59.92% for the first quarter
2003.
Net loans at March 31, 2003, were $593,702,000, compared
to $611,295,000 at December 31, 2002. Total loans decreased
as a result of residential mortgage loan prepayments.
Commercial loans continue to show growth but at a slower rate,
due to the slow economy. "At March 31, 2003, Patriot's total
loan portfolio consisted of 66% of commercial loans and
leases, 13% of consumer loans and 21% of residential
mortgages," said Elko.
Deposits were $567,659,000 at March 31, 2003, compared to
$519,120,000 at December 31, 2002. The cost of deposits was
2.33% for the first quarter 2003. Core deposits (checking,
savings and money market accounts) were $305,941,000 at March 31,
2003, compared to $287,569,000 at December 31, 2002. This
represents an annualized growth in core deposits of over 25%.
The strong growth in core deposits has allowed Patriot to reduce
higher-costing certificates of deposit and continue with
reductions in wholesale funding.
Previously, Patriot announced its branching plans through
2004. Those plans include one new location in Berks County,
Pennsylvania, and the relocation of three existing offices in
Pennsylvania's Lehigh Valley in 2003, as well as two new
locations in Chester County, Pennsylvania, in 2004. "We were
able to keep our branching plans on track, despite difficult
weather conditions," concluded Elko.
On March 26, 2003, Patriot declared the payment of a special
10% stock dividend. The stock dividend distribution will be made
on April 25, 2003 to shareholders of record on April 11, 2003.
Accordingly, the stock price of Patriot's common stock was
adjusted for the dividend on April 9, 2003.
Patriot's Annual Shareholders' Meeting is scheduled for 3:30
p.m. on April 24, 2003 at Brookside in Pottstown, Pennsylvania.
"We hope many of our shareholders are able to come to the meeting
and meet Patriot's people and hear more about the company," said
James B. Elliott, Chairman of the Board.
Patriot is a $1 billion financial services company operating
17 banking and lending offices in southeastern Pennsylvania. The
closing price of Patriot's common stock was $16.22 on April 14,
2003.
In addition to historical information, this information may
contain "forward-looking statements" which are made in good faith
by Patriot Bank Corp. ("Patriot"), pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include statements with
respect to Patriot's strategies, goals, beliefs, expectations,
estimates, intentions, financial condition, results of
operations, future performance and business of Patriot.
Statements preceded by, followed by or that include the words
"may," "could," "should," "pro forma," "looking forward,"
"would," "believe," " expect," "anticipate," "estimate," "
intend," "plan," or similar expressions generally indicate a
forward-looking statement. These forward-looking statements
involve risks and uncertainties that are subject to change based
on various important factors (some of which, in whole or in part,
are beyond Patriot's control). Numerous competitive, economic,
regulatory, legal and technological factors, among others, could
cause Patriot's financial performance to differ materially from
the goals, plans, objectives, intentions and expectations
expressed in such forward-looking statements. Patriot cautions
that the foregoing factors are not exclusive, and neither such
factors nor any such forward-looking statement takes into account
the impact that any future acquisition may have on Patriot and
any such forward-looking statement. Patriot does not undertake
to update any forward-looking statement whether written or oral,
that may be made from time to time by or on behalf of Patriot.
Patriot Bank Corp. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<table>
<caption>
March 31, 2003 December 31,
2003 2002
-------------- ------------
<s> <c> <c>
Assets
Cash and cash due from banks $ 19,271 $ 15,741
Interest earning deposits in other financial institutions 2,516 1,097
---------- --------
Total cash and cash equivalents 21,787 16,839
========== ========
Investment and mortgage backed securities available for
sale - at fair value 344,707 315,868
Loans held for sale 3,455 4,314
Loans and leases receivable, net of allowance for credit
loss of $7,258 and $6,922 at March 31, 2003 and
December 31, 2002, respectively 593,702 611,295
Premises and equipment 8,029 7,612
Accrued interest 3,558 3,946
Real estate owned and other repossessed property 250 404
Cash surrender value life insurance 18,415 18,208
Goodwill 12,174 8,778
Amortizing intangible assets 3,060 3,136
Other assets 4,386 4,743
---------- --------
Total Assets $1,013,523 $995,143
========== ========
Liabilities and Stockholders' Equity
Deposits $ 567,659 $519,120
FHLB advances 305,171 368,173
Customer repurchase agreements 41,041 14,210
Advances from borrowers for taxes and insurances 2,318 2,208
Trust preferred debt securities 20,500 20,500
Other liabilities 7,486 4,987
---------- --------
Total liabilities 944,174 929,198
Stockholders' equity
Preferred stock. $.01 par value, 5,000,000 shares
authorized, none issued at March 31, 2003 and
December 31, 2002, respectively - -
Common stock. no par value, 20,000,000 shares authorized,
6,560,436 and 6,560,436 shares issued at March 31, 2003
and December 31, 2002, respectively - -
Additional paid in capital 57,696 57,611
Common stock acquired by ESOP, 302,085 and 308,513 shares
at cost at March 31, 2003 and December 31, 2002,
respectively (1,621) (1,638)
Common stock acquired by MRP, 7,263 and 8,228 shares at
amortized cost at March 31, 2003 and December 31, 2002,
respectively (87) (98)
Retained earnings 15,217 13,855
Treasury stock acquired, 423,759 and 469,249 shares at
cost at March 31, 2003 and December 31, 2002,
respectively (5,746) (6,441)
Accumulated other comprehensive income 3,890 2,657
---------- --------
Total stockholders' equity 69,349 65,945
---------- --------
Total Liabilities and Stockholders' Equity $1,013,523 $995,143
========== ========
</table>
Patriot Bank Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Quarter Ended Quarter Ended
3/31/03 3/31/02
------------- -------------
Interest Income
Interest-earning deposits $ 6 $ 48
Investment and mortgage-backed
securities 4,196 4,411
Loans 11,130 12,498
------- -------
Total Interest Income 15,332 16,957
------- -------
Interest Expense
Deposits 3,140 4,283
Short-term borrowings 800 1,127
Long-term borrowings 3,616 4,771
------- -------
Total Interest Expense 7,556 10,181
------- -------
Net Interest Income 7,776 6,776
Provision for credit losses 1,100 675
------- -------
Net Interest Income After
Provision for Credit Losses 6,676 6,101
Non-Interest Income
Service fees on deposits 863 600
Fees on loans and leases 426 354
Investment gains / (losses) 556 -
Gains on sale of loans and leases 704 311
BOLI 210 234
Patriot Advisors' commissions 478 123
Other non-interest income (2) 39
Loss on the disposition of borrowings (588) -
------- -------
Total Non-Interest Income 2,646 1,661
------- -------
Non-Interest Expense
Salaries and employee benefits 3,902 2,977
Occupancy and equipment 1,091 1,041
Professional services 325 217
Advertising 163 127
Deposit processing 289 246
Amortization of intangible assets 121 121
Office supplies & postage 209 170
Other operating expenses 580 433
------- -------
Total Non-Interest Expense 6,681 5,333
------- -------
Income Before Income Taxes 2,641 2,429
------- -------
Federal & state income taxes 541 589
------- -------
$ 2,100 $ 1,840
======= =======
Patriot Bank Corp.
Quarterly Data
(in thousands)
<table>
Caption>
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended
3/31/03 12/31/02 9/30/02 6/30/02 3/31/02
------------- ------------- ------------- ------------- -------------
<s> <c> <c> <c> <c> <c>
Interest income $15,332 $15,759 $16,583 $16,815 $16,957
Interest expense 7,556 8,166 8,962 9,549 10,181
------- ------- ------- ------- -------
Net interest income 7,776 7,593 7,621 7,266 6,776
Provision for credit losses 1,100 1,200 1,200 1,000 675
------- ------- ------- ------- -------
Net interest income after
provision for credit losses 6,676 6,393 6,421 6,266 6,101
Non-interest income 2,646 1,793 1,985 1,803 1,661
Non-interest expense
Other operating expense 6,560 5,822 5,780 5,366 5,212
Amortization of intangibles 121 121 121 121 121
------- ------- ------- ------- -------
Total non-interest expense 6,681 5,943 5,901 5,487 5,333
Pre-tax income 2,641 2,243 2,505 2,582 2,429
Income tax expense 541 377 493 602 589
------- ------- ------- ------- -------
Net income $ 2,100 $ 1,866 $ 2,012 $ 1,980 $ 1,840
======= ======= ======= ======= =======
EPS data: (Adjusted for 10%
stock dividend):
Basic earnings per share $ 0.33 $ 0.30 $ 0.31 $ 0.30 $ 0.28
Diluted earnings per share $ 0.31 $ 0.30 $ 0.29 $ 0.28 $ 0.27
Dividends per share $0.1091 $0.1000 $0.0932 $0.0909 $0.0841
EPS data: (Pre 10% stock dividend):
Basic earnings per share $ 0.36 $ 0.33 $ 0.34 $ 0.33 $ 0.31
Diluted earnings per share $ 0.34 $ 0.33 $ 0.32 $ 0.31 $ 0.30
Dividends per share $0.1200 $0.1100 $0.1025 $0.1000 $0.0925
</table>
Patriot Bank Corp.
Quarterly Data
(in thousands)
<table>
<caption>
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended
3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 12/31/01
------------- ------------- ------------- ------------- ------------- -------------
<s> <c> <c> <c> <c> <c> <c>
Return on average equity 12.50% 11.12% 12.06% 12.82% 12.05% 10.36%
Return on average realized equity 13.25% 11.58% 12.56% 12.55% 12.02% 10.70%
Return on average assets 0.86% 0.75% 0.80% 0.79% 0.74% 0.64%
Net interest margin (tax
equivalent) 3.68% 3.57% 3.50% 3.32% 3.06% 2.80%
Efficiency ratio - tax effected 59.92% 59.66% 58.14% 57.60% 60.47% 63.20%
Non-interest income as % of total
revenues 25.39% 19.10% 20.67% 19.88% 19.68% 24.95%
Tier I capital (to average assets) 7.19% 7.36% 7.16% 7.53% 6.86% 6.78%
Common shares outstanding 6,749,727 6,700,306 6,801,507 6,970,391 6,962,365 6,951,563
Book value per share $11.92 $11.42 $11.42 $10.78 $10.10 $10.56
Tangible book value per share 9.34 9.40 9.40 8.80 8.10 8.52
Delinquencies 30 days and more 10,216,877 9,845,386 9,200,158 8,278,447 6,989,228 8,372,902
Delinquencies 90 days and more
(included above) 5,247,954 5,347,476 4,439,189 3,707,515 3,768,473 4,552,779
Non-performing loans 4,516,413 6,268,540 5,288,413 5,247,270 5,576,952 4,985,826
Real estate owned and other
repossessed property 250,184 403,830 618,550 605,957 115,189 348,717
Non-performing assets 4,766,597 6,672,370 5,906,963 5,853,227 5,692,141 5,334,543
Net charge-offs 763,652 906,357 1,049,909 816,238 579,432 433,717
Total loans 604,414,959 622,530,746 642,318,476 647,063,880 649,543,575 655,790,822
Average loans 606,089,143 624,830,441 634,615,505 639,609,322 643,132,430 647,691,166
Loan loss reserves (7,257,932) (6,921,584) (6,627,941) (6,477,850) (6,294,088) (6,198,520)
Total assets 1,013,643,437 995,143,116 986,978,962 1,009,907,928 1,005,153,664 1,010,070,242
Non-performing assets to total
assets 0.47% 0.67% 0.60% 0.58% 0.57% 0.53%
Non-performing assets to total
loans and OREO 0.79% 1.07% 0.92% 0.90% 0.88% 0.81%
Non-performing loans to total loans 0.75% 1.01% 0.82% 0.81% 0.86% 0.76%
Delinquencies 30 days and more to
total loans 1.69% 1.58% 1.43% 1.28% 1.08% 1.28%
Loan loss reserves to total loans 1.20% 1.11% 1.03% 1.00% 0.97% 0.95%
Loan loss reserves to non-
performing assets 152.27% 103.74% 112.21% 110.67% 110.58% 116.20%
Net charge-offs to average loans 0.50% 0.58% 0.66% 0.51% 0.36% 0.28%
</table>
Patriot Bank Corp.
Interest Rate Spread Analysis
1st Quarter, 2003
<table>
<caption>
QTD
---------------------------------------------
Average Annualized
Balance Interest Rate
---------------------------------------------
<s> <c> <c> <c>
Assets
Cash $ 2,921,403 $ 6,310 0.86%
Investment securities* 179,220,557 2,621,981 7.39%
Mortgage-backed securities 138,648,813 1,573,914 4.54%
------------ ----------- ------
Investment and mortgage-backed
securities 317,869,370 4,195,895 6.15%
Mortgage loans 137,862,905 2,588,566 7.54%
Consumer loans 79,732,913 1,108,809 5.64%
Commercial loans 319,284,021 5,568,226 6.98%
Commercial leases* 76,260,572 1,864,249 9.98%
Allowance for credit losses (7,051,268) - 0.00%
------------ ----------- ------
Total loans 606,089,143 11,129,850 7.39%
------------ ----------- ------
Total interest earning assets 926,879,916 15,332,055 6.94%
------------ ----------- ------
Other assets 59,531,105 - 0.00%
------------ ----------- ------
Total Assets $986,411,021 $15,332,055 6.52%
============ =========== ======
Liabilities and Stockholders' Equity
Branch deposits $506,794,558 $ 2,880,807 2.27%
Wholesale certificates 32,640,163 258,978 3.22%
------------ ----------- ------
Total deposits 539,434,721 3,139,785 2.33%
Borrowings 371,318,501 4,416,147 4.76%
Advances from borrowers 2,385,963 6 0.00%
------------ ----------- ------
Total interest bearing
liabilities 913,139,186 7,555,938 3.31%
Other liabilities 5,158,241 - 0.00%
Total stockholders' equity 68,113,594 - 0.00%
------------ ----------- ------
Total Liabilities and
Stockholders' Equity $986,411,021 $ 7,555,938 3.07%
============ =========== ======
Interest margin on average interest
earning assets 3.68%
======
</table>
* Tax equivalent basis
Patriot Bank Corp.
Portfolio Compositions
March 31, 2003
(in thousands)
<table>
<caption>
Investment and Mortgage-Backed Securities March 31, 2003 December 31, 2002
-------------- -----------------
<s> <c> <c>
Investment securities $ 60,111 $ 87,641
FHLB stock 19,177 17,949
FHLMC stock & equity securities 106,974 78,622
-------- --------
Total Investment Securities 186,262 184,212
Mortgage-Backed Securities
Fixed rate mortgage-backed securities 147,541 115,331
Adjustable rate mortgage-backed securities 8,314 9,046
Fixed rate CMOs 2,590 7,279
-------- --------
Total Mortgage-Backed Securities 158,445 131,656
-------- --------
Total Investment and Mortgage-Backed
Securities $344,707 $315,868
======== ========
<caption>
Loans Receivable March 31, 2003 December 31, 2002
-------------- -----------------
<s> <c> <c>
Commercial loan portfolio
Commercial loans $320,112 $315,537
Commercial leases 75,630 77,138
Mortgage loan portfolio
Secured by real estate 116,742 135,632
Construction 9,302 8,220
Consumer loan portfolio
Home equity 70,213 72,400
Consumer 7,382 7,724
-------- --------
Total loans receivable 599,381 616,651
Less deferred loan origination costs 1,579 1,566
Allowance for credit loss (7,258) (6,922)
-------- --------
Total Loans Receivable, Net $593,702 $611,295
======== ========
<caption>
Deposits March 31, 2003 December 31, 2002
-------------- -----------------
<s> <c> <c>
NOW $ 32,754 $ 31,505
Money market 149,802 143,564
Savings accounts 67,881 59,029
Non-interest bearing demand 55,503 53,471
-------- --------
Total demand, transaction, money market and
savings deposits 305,941 287,569
Branch certificates of deposit 222,226 202,019
-------- --------
Total branch deposits 528,166 489,588
Wholesale certificates of deposit 39,492 29,532
-------- --------
Total Deposits $567,659 $519,120
======== ========
Customer repurchase agreements 10,373 14,210
-------- --------
Total Deposits and Customer Repurchase
Agreements $578,031 $533,330
======== ========
</table>