Patriot Bank Net Income exceeds $800 thousand in Q2  

STAMFORD, Conn., July 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 quarter of powerful earnings momentum, reporting second quarter pre-tax income of $1.4 million and net income of $804 thousand, or $0.21 per diluted share.

This compares to net income of $1.7 million, $0.44 per share, in the first quarter of 2017 and a reported loss of $582 thousand for the same quarter a year ago.   For the six months ended June 30, 2017 net income was $2.5 million, or $0.65 per diluted share, compared with $71 thousand, or $0.02 per diluted share, for the first half of 2016.

The comparative results for the first six months of 2016 and 2017 were affected by a troubled loan that was ultimately resolved.  In the first half of 2016, the Bank took significant loan loss provisions, 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 included loan losses and recoveries related to this loan), Patriot’s second quarter net income was up 42% from the first quarter of 2017, and net income for the six-month period ending June 30, 2017 was 28% 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.

Strong earnings performance is attributable to loan and deposit growth, while operating expenses have remained under tight control.  Compared to a year ago, loans increased 28% while deposits increased 26%, fueling the strong growth in net interest income.

CEO Michael Carrazza stated: “This quarter’s impressive results are directly attributable to the enhancements we have made in management and operations.  We expect this positive trend to continue as we prioritize high-impact strategies.”

Mr. Carrazza took over operational control of Patriot as interim CEO in August 2016 to execute a series of value-enhancing strategies and to reposition the executive team.  The performance in the past four quarters reflects an intensive and carefully planned strategy to drive profitability and shareholder value. 

“Initiatives to increase scale, build critical mass in attractive product lines and improve deposit funding channels are primary areas of focus and will continue to add to our profitability and franchise value,” added Mr. Carrazza.

As of June 30, 2017, total assets were $773 million, essentially unchanged from the end of the first quarter, when they had increased by $18 million.  In the year since June 30, 2016, total assets increased by $121 million, up from $652 million.  Loans totaled $679 million as of June 30, 2017, up 8% from the $631 million reported March 31, 2017, and up 28% from the $529 million reported June 30, 2016. 

Deposits remained essentially unchanged during the quarter at $562 million and were up 26% year-over-year as compared with $446 million at the end of the second quarter of 2016.  Deposit growth remains a key initiative to keep pace with Patriot’s overall growth prospects. The loan pipeline remains strong and continued growth is expected. 

Net interest income was $6.3 million in the quarter, up 14% from the first quarter 2017 and up 17% from the corresponding 2016 period, reflecting strong loan and deposit growth.  Net interest income of $11.8 million in the year-to-date period was 9% higher than the $10.8 million in the six month period ending June 30, 2016.  Net interest margin was 3.61% for the quarter and 3.56% for the 2017 year-to-date period, as compared to 3.50% in the prior quarter and 3.77% in the first half of 2016.

The provision for loan losses in the quarter was $260 thousand, reflecting the growth in loans with overall credit quality remaining strong.  The year-to-date credit in the provision of $1.5 million reflects the previously noted recovery. The provision for loan losses was $2.0 million in both the second quarter and year-to-date periods in 2016.  

Non-interest income was $349 thousand in the quarter, 26% higher than the prior quarter.  The prior quarter includes a loss on the sale of investment securities of $78 thousand.  Year-to-date non-interest income of $626 thousand was 19% lower than the prior year, primarily due to the loss on security sales recognized in the first quarter, as the portfolio was intentionally re-positioned to provide future enhancements to profitability.

Non-interest expense increased 7%, over the prior quarter and year-to-date non-interest expenses increased 2% over the same period in 2016. 

As of June 30, 2017 shareholders’ equity was $65.3 million, an increase of $3.4 million from a year ago.  The Company’s book value per share increased to $16.77 at June 30, 2017 as compared to $15.64 a year ago.

The Bank’s capital ratios continue to be strong, as the Bank maintained its “well capitalized” regulatory status.  As of June 30, 2017, Tier 1 leverage ratio was 9.97%, Tier 1 risk based capital was 10.73% and total risk based capital was 11.59%.     

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.