EXHIBIT 99
FOR IMMEDIATE RELEASE PATRIOT BANK CORP.
www.patriotbank.com
July 22, 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 Diluted Earnings Per Share of Over 14%
Pottstown, PA, July 22, 2003 . . . Patriot Bank Corp.
(NASDAQ: PBIX), parent company of Patriot Bank, today announced
record earnings for the second quarter 2003 of $2,151,000 or
$.32 per diluted share, compared to earnings of $1,980,000 or
$.28 per diluted share for the second quarter of 2002. Year-to-
date earnings were $4,251,000 or $.63 per diluted share for
2003, compared to year-to-date earnings of $3,820,000 or $.55
per diluted share for 2002.
In addition to an increase of over 14% in diluted earnings
per share, highlights of the quarter include:
- Annualized core deposit growth of over 35%
- Net interest margin of 3.50%
- Non-interest income up 71% over second quarter 2002
- Non-interest income increased to 29% of total income
- Return on average equity 12.43%
- Non-performing assets decreased to .45% of total assets
- Loan loss reserves to total loans increased to 1.23%
- Patriot Bank designated a "preferred lender" by the
Small Business Administration (SBA)
- Completed the transition of Whitehall, Pa., supermarket
office to full-service office
- Opened temporary office in Spring Township, Pa., in
advance of a full-service office later this year
- Payment of 10% special stock dividend on April 25, 2003
- Named to Russell 3000(R) Index
"The second quarter was another very productive quarter for
Patriot. We continued to make significant progress investing in
the company's future, while achieving continued strong financial
results," said Richard A. Elko, President and Chief Executive
Officer.
Patriot's net interest margin was 3.50% and 3.59% for the
second quarter and year-to-date 2003, respectively, compared to
3.53% and 3.32% for the second quarter and year-to-date 2002,
respectively. "We experienced some contraction this quarter in
net interest margin due to continued low market rates. We
expect that margin will expand somewhat in the third quarter,
2003," continued Elko.
Second quarter 2003 earnings included a provision for
credit losses of $900,000, bringing the 2003 year-to-date total
to $2,000,000, compared to second quarter 2002 of $1,000,000 and
$1,675,000 year-to-date 2002, respectively. Patriot's
percentage of non-performing assets to total assets improved to
..45% at June 30, 2003, compared to .67% at December 31, 2002.
Patriot's percentage of all loans delinquent 30 days or more to
total loans also improved to 1.44% at June 30, 2003, compared to
1.58% at December 31, 2002. "Despite a challenging economy,
Patriot has reduced its non-performing assets in the first and
second quarters," said Elko.
Non-interest income was $3,088,000 and $5,734,000 for the
second quarter and year-to-date 2003, respectively, compared to
$1,803,000 and $3,464,000 for the second quarter and year-to-
date 2002, respectively. "Contributing to the increase in non-
interest income has been Patriot's recently formed SBA
Department. During the quarter Patriot was designated as a
preferred lender by the SBA which enables Patriot to more
expeditiously originate and more efficiently administer SBA
loans," said Elko.
Non-interest expense was $6,980,000 and $13,661,000 for the
second quarter and year-to-date 2003, respectively, compared to
$5,487,000 and $10,820,000 for the second quarter and year-to-
date 2002, respectively. The increase in non-interest expense
is primarily due to increases in staffing associated with
Patriot's two wealth management acquisitions in January 2003 and
with Patriot's new community banking offices, Chester County
lenders and the enhancement of Patriot's Cash Management
Division. "Patriot's efficiency ratio was 62.05% for the second
quarter 2003, which is slightly higher than goal. We will
continue to work to bring this ratio under 60%," said Elko.
Net loans at June 30, 2003, were $585,386,000, 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 than in prior
quarters. "We have been very judicious with our loan pricing
and resisted adding a significant amount of loans to the balance
sheet at very low rates," continued Elko.
Deposits were $605,738,000 at June 30, 2003, compared to
$519,120,000 at December 31, 2002. The cost of deposits was
2.19% for the second quarter 2003. Core deposits (checking,
savings and money market accounts) were $338,591,000 at June 30,
2003, compared to $287,569,000 at December 31, 2002. This
represents an annualized growth in core deposits of over 35%.
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 included one new location in Berks County,
Pa., and the relocation of three existing offices in
Pennsylvania's Lehigh Valley in 2003, as well as two new
locations in Chester County, Pa., in 2004. "We completed the
transition of our supermarket office in Whitehall, Pa., when the
full-service office was opened on July 14, 2003. We experienced
strong deposit growth through the transition of approximately
$12,000,000. We also opened a temporary office in Spring
Township, Pa., on May 14, 2003. The construction of our
permanent community banking office in Spring Township is
expected to be completed by year end," concluded Elko.
Patriot held its annual shareholder meeting during the
second quarter on April 24, 2003. At that meeting Russell J.
Kunkel was re-elected as director of the company and KPMG, LLP
was ratified as Patriot's independent auditors for year ended
December 31, 2003. "It was a pleasure presiding over our annual
shareholder meeting and very gratifying to see in person the
tremendous support we have received from our shareholders," said
James B. Elliott, Chairman of the Board.
Patriot is a $1 billion financial services company
operating 20 banking and lending offices in southeastern
Pennsylvania. The closing price of Patriot's common stock was
$18.10 on July 21, 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>
Assets June 30, 2003 December 31, 2002
------------- -----------------
<s> <c> <c>
Cash and cash due from banks $19,801 $15,741
Interest earning deposits in other financial
institutions 1,082 1,098
---------- --------
Total cash and cash equivalents 20,883 16,839
Investment and mortgage backed securities
available for sale - at fair value 342,243 315,868
Loans held for sale 5,311 4,314
Loans and leases receivable, net of allowance for
credit loss of $7,341 and $6,922 at June 30, 2003
and December 31, 2002, respectively 585,386 611,295
Premises and equipment 9,468 7,612
Accrued interest 3,686 3,946
Real estate owned and other repossessed property 474 404
Cash surrender value life insurance 18,615 18,208
Goodwill 11,442 8,777
Amortizing intangible assets 3,638 3,137
Other assets 4,735 4,743
---------- --------
Total Assets $1,005,881 $995,143
========== ========
Liabilities and Stockholders' Equity
Deposits $ 605,738 $519,120
FHLB advances and federal funds 257,828 368,173
Repurchase agreements 42,931 14,210
Advances from borrowers for taxes and insurances 2,489 2,208
Trust preferred debt securities 20,500 20,500
Other liabilities 6,877 4,987
---------- --------
Total liabilities 936,363 929,198
Stockholders' equity
Preferred stock. $.01 par value, 5,000,000 shares
authorized, none issued at June 30, 2003 and
December 31, 2002, respectively - -
Common stock. no par value, 20,000,000 shares
authorized, 7,216,480 and 7,216,480 shares
issued at June 30, 2003 and December 31, 2002,
respectively - -
Additional paid in capital 68,430 57,611
Common stock acquired by ESOP, 325,224 and
339,364 shares at cost at June 30, 2003 and
December 31, 2002, respectively (1,604) (1,638)
Common stock acquired by MRP, 6,929 and 9,051
shares at amortized cost at June 30, 2003 and
December 31, 2002, respectively (76) (98)
Retained earnings 5,934 13,855
Treasury stock acquired, 544,171 and 516,174
shares at cost at June 30, 2003 and December 31,
2002, respectively (7,102) (6,441)
Accumulated other comprehensive income 3,936 2,656
---------- --------
Total stockholders' equity 69,518 65,945
---------- --------
Total Liabilities and Stockholders' Equity $1,005,881 $995,143
========== ========
</table>
Patriot Bank Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<table>
<caption>
Quarter Ended Quarter Ended Year to Date Year to Date
Interest Income 6/30/03 6/30/02 6/30/03 6/30/02
------------- ------------- ------------ ------------
<s> <c> <c> <c> <c>
Interest-earning deposits $ 4 $ 12 $ 10 $ 60
Investment and mortgage-backed
securities 4,053 4,370 8,249 8,781
Loans and leases 10,643 12,433 21,773 24,931
------- ------- ------- -------
Total Interest Income 14,700 16,815 30,032 33,772
------- ------- ------- -------
Interest Expense
Deposits 3,238 3,615 6,378 7,898
Short-term borrowings 478 1,128 1,278 2,255
Long-term borrowings 3,557 4,806 7,173 9,577
------- ------- ------- -------
Total Interest Expense 7,273 9,549 14,829 19,730
------- ------- ------- -------
Net Interest Income 7,427 7,266 15,203 14,042
Provision for credit losses 900 1,000 2,000 1,675
------- ------- ------- -------
Net Interest Income After Provision
for Credit Losses 6,527 6,266 13,203 12,367
Non-Interest Income
Service fees on deposits 918 648 1,780 1,249
Fees on loans and leases 441 241 867 594
Investment gains/(losses) 376 134 932 134
Gains on sale of loans and leases 746 486 1,449 797
BOLI 202 225 413 459
Patriot Advisors' commissions 502 88 980 211
Other non-interest income 39 (19) 38 20
Loss on the disposition of borrowings (136) - (725) -
------- ------- ------- -------
Total Non-Interest Income 3,088 1,803 5,734 3,464
------- ------- ------- -------
Non-Interest Expense
Salaries and employee benefits 4,064 2,985 7,967 5,962
Occupancy and equipment 1,074 956 2,164 1,997
Professional services 278 414 603 631
Advertising 173 205 337 332
Deposit processing 294 288 583 534
Amortization of intangible assets 149 121 270 243
Office supplies & postage 226 189 435 359
Other operating expenses 722 329 1,302 762
------- ------- ------- -------
Total Non-Interest Expense 6,980 5,487 13,661 10,820
------- ------- ------- -------
Income Before Income Taxes 2,635 2,582 5,276 5,011
------- ------- ------- -------
Federal & state income taxes 484 602 1,025 1,191
------- ------- ------- -------
Net Income $ 2,151 $ 1,980 $ 4,251 $ 3,820
======= ======= ======= =======
Earnings Per Share Basic $ 0.34 $ 0.30 $ 0.67 $ 0.58
Earnings Per Share Diluted $ 0.32 $ 0.28 $ 0.63 $ 0.55
Dividends Per Share $0.1200 $0.0909 $0.2291 $0.1795
</table>
Patriot Bank Corp.
Quarterly Data
(in thousands)
<table>
<caption>
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended
6/30/03 3/31/03 12/31/02 9/30/02 6/30/02
------------- ------------- ------------- ------------- -------------
<s> <c> <c> <c> <c> <c>
Interest income $14,700 $15,332 $15,759 $16,583 $16,815
Interest expense 7,273 7,556 8,166 8,962 9,549
------- ------- ------- ------- -------
Net interest income 7,427 7,776 7,593 7,621 7,266
Provision for credit losses 900 1,100 1,200 1,200 1,000
------- ------- ------- ------- -------
Net interest income after
provision for credit losses 6,527 6,676 6,393 6,421 6,266
Non-interest income 3,088 2,646 1,793 1,985 1,803
Non-interest expense
Other operating expense 6,831 6,560 5,822 5,780 5,366
Amortization of intangibles 149 121 121 121 121
------- ------- ------- ------- -------
Total non-interest expense 6,980 6,681 5,943 5,901 5,487
Pre-tax income 2,635 2,641 2,243 2,505 2,582
Income tax expense 484 541 377 493 602
------- ------- ------- ------- -------
Net income $ 2,151 $ 2,100 $ 1,866 $ 2,012 $ 1,980
======= ======= ======= ======= =======
Basic earnings per share $ 0.34 $ 0.33 $ 0.30 $ 0.31 $ 0.30
Diluted earnings per share $ 0.32 $ 0.31 $ 0.30 $ 0.29 $ 0.28
Dividends per share $0.1200 $0.1091 $0.1000 $0.0932 $0.0909
</table>
Patriot Bank Corp.
Quarterly Data
(in thousands)
<table>
<caption>
Quarter Quarter Quarter Quarter Quarter Quarter Quarter
Ended Ended Ended Ended Ended Ended Ended
6/30/03 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> <c>
Return on average
equity 12.43% 12.50% 11.12% 12.06% 12.82% 12.05% 10.36%
Return on average
realized equity 13.30% 13.25% 11.58% 12.56% 12.55% 12.02% 10.70%
Return on average
assets 0.86% 0.86% 0.75% 0.80% 0.79% 0.74% 0.64%
Net interest margin
(tax equivalent) 3.50% 3.68% 3.57% 3.50% 3.32% 3.06% 2.80%
Efficiency ratio
- tax effected 62.05% 59.92% 59.66% 58.14% 57.60% 60.47% 63.20%
Non-interest income
as % of total
revenues 29.37% 25.39% 19.10% 20.67% 19.88% 19.68% 24.95%
Tier I capital (to
average assets) 7.21% 7.19% 7.36% 7.16% 7.53% 6.86% 6.78%
Common shares
outstanding 6,672,309 6,749,727 6,700,306 6,801,507 6,970,391 6,962,365 6,951,563
Book value per share $10.96 $10.83 $10.38 $10.38 $9.80 $9.18 $9.60
Tangible book value
per share 8.62 8.49 8.55 8.55 8.00 7.36 7.75
Delinquencies 30 days
and more 8,604,888 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) 5,742,180 5,247,954 5,347,476 4,439,189 3,707,515 3,768,473 4,552,779
Non-performing loans 4,011,206 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 474,165 250,184 403,830 618,550 605,957 115,189 348,717
Non-performing assets 4,485,371 4,766,597 6,672,370 5,906,963 5,853,227 5,692,141 5,334,543
Net charge-offs 816,562 763,652 906,357 1,049,909 816,238 579,432 433,717
Total loans 598,038,056 604,414,959 622,530,746 642,318,476 647,063,880 649,543,575 655,790,822
Average loans 588,835,487 606,089,143 624,830,441 634,615,505 639,609,322 643,132,430 647,691,166
Loan loss reserves (7,341,369) (7,257,932) (6,921,584) (6,627,941) (6,477,850) (6,294,088) (6,198,520)
Total assets 1,005,881,207 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 0.45% 0.47% 0.67% 0.60% 0.58% 0.57% 0.53%
Non-performing
assets to total
loans and OREO 0.75% 0.79% 1.07% 0.92% 0.90% 0.88% 0.81%
Non-performing
loans to total
loans 0.67% 0.75% 1.01% 0.82% 0.81% 0.86% 0.76%
Delinquencies
30 days and more
to total loans 1.44% 1.69% 1.58% 1.43% 1.28% 1.08% 1.28%
Loan loss reserves
to total loans 1.23% 1.20% 1.11% 1.03% 1.00% 0.97% 0.95%
Loan loss reserves
to non-performing
assets 163.67% 152.27% 103.74% 112.21% 110.67% 110.58% 116.20%
Net charge-offs to
average loans 0.55% 0.50% 0.58% 0.66% 0.51% 0.36% 0.28%
</table>
Patriot Bank Corp.
Interest Rate Spread Analysis
2nd Quarter, 2003
<table>
<caption>
QTD
-------------------------------------------
Average Annualized
Assets Balance Interest Rate
-------------------------------------------
<s> <c> <c> <c>
Cash $ 2,273,752 $ 4,070 0.36%
Investment securities* 82,750,733 2,429,860 6.84%
Mortgage-backed securities 161,627,950 1,623,429 4.02%
------------ ----------- ----------
Investment and mortgage-backed securities 344,378,683 4,053,289 5.51%
Mortgage loans 119,104,967 2,183,886 7.34%
Consumer loans 79,382,986 1,131,691 5.72%
Commercial loans 322,266,997 5,505,733 6.77%
Commercial leases* 75,318,276 1,821,043 9.89%
Allowance for credit losses (7,237,738) - 0.00%
------------ ----------- ----------
Total loans 588,835,488 10,642,353 7.22%
------------ ----------- ----------
Total interest earning assets 935,487,923 14,699,712 6.58%
------------ ----------- ----------
Other assets 62,626,890 - 0.00%
------------ ----------- ----------
Total Assets $ 998,114,813 $14,699,712 6.16%
============= =========== ==========
Liabilities and Stockholders' Equity
Branch deposits $ 543,015,379 $ 2,964,504 2.16%
Wholesale certificates 39,501,033 273,600 2.78%
------------ ----------- ----------
Total deposits 582,516,412 3,238,104 2.20%
Borrowings 338,703,631 4,034,936 4.72%
Advances from borrowers 2,387,935 35 0.01%
------------ ----------- ----------
Total interest bearing liabilities 923,607,978 7,273,075 3.12%
Other liabilities 5,116,629 - 0.00%
------------ ----------- ----------
Total stockholders' equity 69,390,206 - 0.00%
------------ ----------- ----------
Total Liabilities and Stockholders' Equity $998,114,813 $ 7,273,075 2.89%
============ =========== ==========
Interest margin on average interest
earning assets 3.50%
=========
<fn>
* Tax equivalent basis
</fn>
</table>
Patriot Bank Corp.
Portfolio Compositions
June 30, 2003
(in thousands)
<table>
<caption>
Investment and Mortgage-Backed Securities June 30, 2003 December 31, 2002
----------------- -----------------
<s> <c> <c>
Investment securities $ 59,320 $ 87,641
FHLB stock 15,874 17,949
FHLMC stock & equity securities 105,685 78,622
-------- --------
Total Investment Securities 180,879 184,212
Mortgage-Backed Securities
Fixed rate mortgage-backed securities 153,342 115,331
Adjustable rate mortgage-backed securities 6,384 9,046
Fixed rate CMOs 1,638 7,279
-------- --------
Total Mortgage-Backed Securities 161,364 131,656
-------- --------
Total Investment and Mortgage-Backed
Securities $342,243 $315,868
======== ========
<caption>
Loans Receivable June 30, 2003 December 31, 2002
----------------- -----------------
<s> <c> <c>
Commercial portfolio
Commercial loans $321,140 $315,537
Commercial leases 77,418 77,138
Mortgage loan portfolio
Secured by real estate 97,318 135,632
Construction 11,902 8,220
Consumer loan portfolio
Home equity 75,618 72,400
Consumer 7,870 7,724
-------- --------
Total loans and leases receivable 591,266 616,651
Less deferred loan origination costs 1,461 1,566
Allowance for credit loss (7,341) (6,922)
-------- --------
Total Loans and Leases Receivable, Net $585,386 $611,295
======== ========
<caption>
Deposits June 30, 2003 December 31, 2002
----------------- -----------------
<s> <c> <c>
NOW $ 35,975 $ 31,505
Money market 167,032 143,564
Savings accounts 75,552 59,029
Non-interest bearing demand 60,032 53,471
-------- --------
Total demand, transaction, money market
and savings deposits 338,591 287,569
Branch certificates of deposit 227,629 202,019
-------- --------
Total branch deposits 566,220 489,588
Wholesale certificates of deposit 39,518 29,532
-------- --------
Total Deposits $605,738 $519,120
======== ========
Customer repurchase agreements 10,998 14,210
-------- --------
Total Deposits and Customer
Repurchase Agreements $616,736 $533,330
======== ========
</table>