STAMFORD, Conn., May 04, 2018 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. (“Patriot”) (NASDAQ:PNBK), the parent company of Patriot Bank, N.A. (the “Bank”), today announced quarterly pre-tax earnings of $1.4 million and quarterly net income of $1.1 million, or $0.27 per fully diluted share for the quarter ended March 31, 2018.
Patriot’s quarterly net income of $1.1 million highlights continued earnings growth, particularly as compared with net income of $600 thousand in the prior quarter. The quarter is not comparable to the same quarter last year due to a material credit recovery that was recognized in the first quarter of 2017 and material non-recurring acquisition-related expenses recognized in the current quarter. Pre-tax earnings reported for the first quarter of 2018 and the fourth quarter of 2017 included non-recurring transaction expenses of $523 thousand and $601 thousand, respectively, which are associated with two pending acquisitions that are underway. These non-recurring expenses will cease once the acquisitions are consummated and the acquired companies are fully integrated.
CEO Michael Carrazza commented: “In light of the strategic activities and associated transaction expenses, we’re pleased to announce another quarter of strong earnings performance and continued, measured progress. Building scale and franchise value remains on track, and several key additions to our management team add specialization and depth in preparation for building our national SBA lending platform.”
Richard Muskus, Patriot’s President, added: “We are building from a strong foundation, with key new Patriot banking leaders announced today enhancing our lending and deposit gathering strategies. We are well prepared to see continued loan growth in our existing markets, expand to a national SBA lending platform, and build on our retail banking presence.”
Notable management changes announced today by Patriot include:
- Credit: David W. Christiansen as Patriot Bank’s new EVP & Senior Credit Officer, reporting to President Richard Muskus. Mr. Christiansen joins Patriot from First American International Bank of New York, where he was also Executive Vice President & Chief Credit Officer.
Mr. Christiansen’s leadership of credit administration, credit risk management, underwriting, closing, loan servicing and portfolio management is a strong match for his new role at Patriot. He previously held senior roles at National Cooperative Bank, Credit Agricole and JPMorgan Chase. Mr. Christiansen will replace Samuel Davis who had announced his intention to resign, after serving as Executive Vice President & Chief Credit Officer for nearly nine years. Mr. Davis was part of the turnaround team and instrumental in the resolution of asset quality issues, when the Bank was acquired in 2010. He is working closely with Mr. Christiansen for a seamless and overlapping transition. - SBA: Kevin Ferryman as Senior Vice President & Director of SBA Lending. His role will be to build Patriot’s east coast Small Business Administration loan business, organically and through the integration of the pending west coast acquisition of Hana Small Business Lending, Inc.
Mr. Ferryman was most recently Head of SBA Lending for Citizens Bank, one of the largest SBA Lenders in the U.S. Under his leadership, SBA production increased over 500% in four years. He previously led SBA lending initiatives at Capital One Bank and JPMorgan Chase. - Deposit Gathering: Patriot is in the final stages of hiring a Chief Marketing Officer and Mobile Banking strategist. This role will have key responsibilities for optimizing Patriot’s overall deposit strategy, executing Patriot’s enhanced online and mobile banking platform and implementing unique deposit solutions to support Patriot’s build-out of a national SBA platform.
In addition, Patriot also announced today the declaration of its fourth consecutive quarterly dividend of $0.01 per fully diluted share. The record date for this quarterly dividend will be May 17, 2018 with a dividend payment date of May 22, 2018.
Financial Results
As of March 31, 2018, total assets increased to $870 million, as compared to $852 million at December 31, 2017 and $775 million at March 31, 2017, for a total asset growth of 12% over a one-year period. Net loans receivable totaled $718 million, up 1% over $713 million at December 31, 2017, and up 15% over $625 million at March 31, 2017. Deposits continued to grow to $655 million at March 31, 2018, as compared to $637 million at December 31, 2017 and $561 million at March 31, 2017. 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, essentially unchanged from the fourth quarter of 2017 and up 28% over 5.5 million from the corresponding 2017 period. Net interest margin was 3.55% for the first quarter of 2018, as compared to 3.51% for the fourth quarter of 2017 and 3.50% for the first quarter of 2017.
The provision for loan losses in the quarter was $185 thousand, as compared to $87 thousand in the fourth quarter of 2017 and a net credit of $1.7 million in the first quarter of 2017, which reflected the previously noted recovery.
Non-interest income was $322 thousand in the quarter, 25% lower than the prior quarter which included gains on the sale of securities of $84 thousand, and 16% higher than the prior year.
Non-interest expense decreased $451 thousand over the prior quarter, and increased $1.1 million over the first quarter of 2017. The quarter’s expenses were impacted by non-recurring project costs of $523 thousand in the quarter associated with the pending acquisitions for Prime Bank and Hana Small Business Lending, Inc. and an income tax related consulting project. The fourth quarter of 2017 included similar non-recurring project costs of $601 thousand.
The income tax provision in the first quarter of $344 thousand represented an effective tax rate of 24% and reflects the positive impact of the tax rate changes enacted in the fourth quarter of 2017.
As of March 31, 2018 shareholders’ equity was $67.6 million, an increase of $3.2 million from a year ago. The Company’s book value per share increased to $17.32 at March 31, 2018, as compared to $16.55 a year ago.
The Bank’s capital ratios continue to be strong, as the Bank maintained its “well capitalized” regulatory status. As of March 31, 2018, Tier 1 leverage ratio was 9.72%, Tier 1 risk based capital was 10.90% and total risk based capital was 11.76%.
About the Company
Founded in 1994, Patriot National Bancorp, Inc. is the parent holding company of Patriot Bank N.A. (“Patriot”), a nationally chartered bank headquartered in Stamford, CT. Patriot operates with full service branches in Connecticut and New York and provides lending products and services nationally. Patriot’s mission is to serve its local community and nationwide customer base by providing a growing array of banking solutions to meet the needs of individuals and small businesses owners. Patriot Bank places great value in the integrity of its people and how it conducts business. An emphasis on building strong client relationships and community involvement are cornerstones of our philosophy as we seek to maximize shareholder value.
“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. AND SUBSIDIARY | |||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||
| (Unaudited) | |||||||||||||
| Dollars in thousands | March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||
| Assets | |||||||||||||
| Noninterest bearing deposits and cash | $ | 3,865 | $ | 3,582 | $ | 5,061 | |||||||
| Interest bearing deposits | 58,127 | 45,659 | 55,205 | ||||||||||
| Total cash and cash equivalents | 61,992 | 49,241 | 60,266 | ||||||||||
| Available-for-sale securities, at fair value | 24,793 | 25,576 | 21,201 | ||||||||||
| Other investments, at cost | 4,450 | 4,450 | 4,450 | ||||||||||
| Total investment securities | 29,243 | 30,026 | 25,651 | ||||||||||
| FRB & FHLB stock, at cost | 8,415 | 8,391 | 7,847 | ||||||||||
| Gross loans receivable | 724,555 | 719,647 | 630,727 | ||||||||||
| Allowance for loan losses | (6,485 | ) | (6,297 | ) | (5,697 | ) | |||||||
| Net loans receivable | 718,070 | 713,350 | 625,030 | ||||||||||
| Accrued interest and dividends receivable | 3,505 | 3,496 | 3,063 | ||||||||||
| Premises and equipment, net | 35,638 | 35,358 | 33,442 | ||||||||||
| Other real estate owned | - | - | 851 | ||||||||||
| Deferred tax asset, net | 11,335 | 10,397 | 11,691 | ||||||||||
| Other assets | 2,219 | 1,821 | 6,920 | ||||||||||
| Total assets | $ | 870,417 | $ | 852,080 | $ | 774,761 | |||||||
| Liabilities and Shareholders' Equity | |||||||||||||
| Deposits | |||||||||||||
| Noninterest bearing deposits | $ | 71,736 | $ | 81,197 | $ | 78,372 | |||||||
| Interest bearing deposits | 583,562 | 556,242 | 482,587 | ||||||||||
| 655,298 | 637,439 | 560,959 | |||||||||||
| Federal Home Loan Bank and correspondent bank borrowings | 120,000 | 120,000 | 124,000 | ||||||||||
| Senior notes, net | 11,722 | 11,703 | 11,647 | ||||||||||
| Junior subordinated debt owed to unconsolidated trust | 8,088 | 8,086 | 8,080 | ||||||||||
| Note payable | 1,532 | 1,580 | 1,722 | ||||||||||
| Advances from borrowers for taxes and insurance | 1,904 | 2,829 | 1,755 | ||||||||||
| Accrued expenses and other liabilities | 4,268 | 3,694 | 2,157 | ||||||||||
| Total liabilities | 802,812 | 785,331 | 710,320 | ||||||||||
| Common stock | 40 | 40 | 40 | ||||||||||
| Additional paid-in capital | 106,928 | 106,875 | 106,772 | ||||||||||
| Accumulated deficit | (37,805 | ) | (38,832 | ) | (41,172 | ) | |||||||
| Treasury stock, at cost | (1,179 | ) | (1,179 | ) | (1,177 | ) | |||||||
| Accumulated other comprehensive loss | (379 | ) | (155 | ) | (22 | ) | |||||||
| Total Shareholders' Equity | 67,605 | 66,749 | 64,441 | ||||||||||
| Total Liabilities and Shareholders' Equity | $ | 870,417 | $ | 852,080 | $ | 774,761 | |||||||
| PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY | |||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
| (Unaudited) | Three Months Ended | ||||||||||
| Dollars in thousands, except per share data | March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||
| Interest and Dividend Income | |||||||||||
| Interest and fees on loans | $ | 8,774 | $ | 8,550 | $ | 6,607 | |||||
| Interest on investment securities | 266 | 294 | 171 | ||||||||
| Dividends on investment securities | 121 | 103 | 82 | ||||||||
| Other interest income | 151 | 66 | 64 | ||||||||
| Total interest and dividend income | 9,312 | 9,013 | 6,924 | ||||||||
| Interest Expense | |||||||||||
| Interest on deposits | 1,657 | 1,491 | 989 | ||||||||
| Interest on Federal Home Loan Bank borrowings | 257 | 193 | 78 | ||||||||
| Interest on senior debt | 229 | 229 | 229 | ||||||||
| Interest on subordinated debt | 99 | 94 | 85 | ||||||||
| Interest on note payable | 7 | 7 | 9 | ||||||||
| Total interest expense | 2,249 | 2,014 | 1,390 | ||||||||
| Net interest income | 7,063 | 6,999 | 5,534 | ||||||||
| Provision (credit) for loan losses | 185 | 87 | (1,749 | ) | |||||||
| Net interest income after provision (credit) for loan losses | 6,878 | 6,912 | 7,283 | ||||||||
| Non-interest Income | |||||||||||
| Loan application, inspection and processing fees | 8 | 12 | 21 | ||||||||
| Deposit fees and service charges | 134 | 146 | 149 | ||||||||
| Rental income | 84 | 97 | 94 | ||||||||
| Other income | 96 | 177 | 13 | ||||||||
| Total non-interest income | 322 | 432 | 277 | ||||||||
| Non-interest Expense | |||||||||||
| Salaries and benefits | 2,769 | 3,247 | 2,430 | ||||||||
| Occupancy and equipment expense | 741 | 755 | 775 | ||||||||
| Data processing expense | 317 | 353 | 120 | ||||||||
| Professional and other outside services | 572 | 438 | 652 | ||||||||
| Merger/tax initiative project expenses | 523 | 601 | - | ||||||||
| Advertising and promotional expenses | 78 | 56 | 74 | ||||||||
| Loan administration and processing expenses | 13 | 18 | 9 | ||||||||
| Regulatory assessments | 252 | 272 | 179 | ||||||||
| Insurance expenses | 55 | 52 | 59 | ||||||||
| Material and communications | 113 | 94 | 87 | ||||||||
| Other operating expenses | 358 | 356 | 309 | ||||||||
| Total non-interest expense | 5,791 | 6,242 | 4,694 | ||||||||
| Income before income taxes | 1,409 | 1,102 | 2,866 | ||||||||
| Provision for Income Taxes | 344 | 502 | 1,136 | ||||||||
| Net income | $ | 1,065 | $ | 600 | $ | 1,730 | |||||
| Basic earnings per share | $ | 0.27 | $ | 0.15 | $ | 0.44 | |||||
| Diluted earnings per share | $ | 0.27 | $ | 0.15 | $ | 0.44 | |||||
| PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY | ||||||||||||||
| FINANCIAL RATIOS AND OTHER DATA | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Dollars in thousands, except shares outstanding and per share data | ||||||||||||||
| Quarter Ended | ||||||||||||||
| March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||||
| Quarterly Performance Data: | ||||||||||||||
| Net Income | $ | 1,065 | $ | 600 | $ | 1,730 | ||||||||
| Return on Average Assets | 0.51 | % | 0.29 | % | 1.02 | % | ||||||||
| Return on Average Equity | 6.37 | % | 3.65 | % | 10.81 | % | ||||||||
| Net Interest Margin | 3.55 | % | 3.51 | % | 3.50 | % | ||||||||
| Efficiency Ratio | 78 | % | 84 | % | 81 | % | ||||||||
| Qtr % increase loans | 1 | % | 1 | % | 8 | % | ||||||||
| Qtr % increase deposits | 3 | % | 5 | % | 6 | % | ||||||||
| Asset Quality: | ||||||||||||||
| Nonaccrual loans | $ | 5,036 | $ | 3,781 | $ | 1,812 | ||||||||
| Other real estate owned | - | - | 851 | |||||||||||
| Total nonperforming assets | $ | 5,036 | $ | 3,781 | $ | 2,663 | ||||||||
| Nonaccrual loans / loans | 0.70 | % | 0.53 | % | 0.29 | % | ||||||||
| Nonperforming assets / assets | 0.58 | % | 0.44 | % | 0.34 | % | ||||||||
| Allowance for loan losses | $ | 6,485 | $ | 6,297 | $ | 5,697 | ||||||||
| Allowance for loan losses / loans | 0.90 | % | 0.88 | % | 0.90 | % | ||||||||
| Allowance / nonaccrual loans | 128.8 | % | 166.5 | % | 314.4 | % | ||||||||
| Gross loan charge-offs for the quarter | $ | - | $ | 17 | $ | - | ||||||||
| Gross loan (recoveries) for the quarter | $ | (3 | ) | $ | (4 | ) | $ | (2,771 | ) | |||||
| Net loan charge-offs (recoveries) for the quarter | $ | (3 | ) | $ | 13 | $ | (2,771 | ) | ||||||
| Capital Data and Capital Ratios | ||||||||||||||
| Book value per share (1) | $ | 17.32 | $ | 17.12 | $ | 16.55 | ||||||||
| Shares outstanding | 3,902,610 | 3,899,675 | 3,894,128 | |||||||||||
| Bank Capital Ratios: | ||||||||||||||
| Leverage Ratio | 9.72 | % | 9.36 | % | 10.65 | % | ||||||||
| Tier 1 Capital | 10.90 | % | 10.55 | % | 11.09 | % | ||||||||
| Total Risk Based Capital | 11.76 | % | 11.41 | % | 11.96 | % | ||||||||
| (1) Book value per share represents shareholders' equity divided by outstanding shares. | ||||||||||||||
Patriot Bank, N.A.
900 Bedford Street
Stamford, CT 06901
www.BankPatriot.com
Contacts:
Richard Muskus
President
203-252-5939
Joseph Perillo
Chief Financial Officer
203-252-5954
Michael Carrazza
CEO & Chairman
203-251-8230