STAMFORD, Conn., May 6, 2014 (GLOBE NEWSWIRE) -- Patriot National Bancorp, Inc. ("Patriot") (Nasdaq: PNBK ) reported net income for the first quarter of 2014 of $319,000 or $0.01 per diluted share compared to a loss of $2 million or $0.05 per diluted share a year ago. First quarter results include a charge of $117,000 for prior period interest expense related to the company's Junior Subordinated Debentures. Excluding this prior period expense, net income would have been $436,000 and when annualized equates to a Return on Average Assets of 0.33% and a Return on Average Equity of 4.12%. Kenneth T. Neilson, President and CEO commented, "Patriot's first quarter results reflect improvements in all aspects of the company's operation including margin, other income, expense reduction, asset quality and new business generation. We are pleased with our results and look forward to continued improvement and growth."
Michael Carrazza, Chairman, stated, "Based on these results and Patriot's business plan for 2014, we believe Patriot, in the future, will no longer require a valuation allowance on its deferred tax assets which could add over $17 million to capital and will increase book value by approximately 45 cents per share."
Excluding the prior period expense, net interest income for the first quarter of 2014 was $4.1 million compared with $3.9 million in the first quarter of 2013 and Patriot's net interest margin was 3.35% for 2014 up from 2.73% in the first quarter of 2013.
Non interest income totaled $593,000 for the first quarter of 2014 up from $487,000 in the first quarter of last year, a 22% increase. The increases occurred across all categories of ongoing non interest income except for a slight decline on income from Bank Owned Life Insurance due to the interest rate environment.
Non interest expense for the first quarter of 2014 totaled $4.3 million down from $6.4 million in the first quarter of last year, a decrease of 33%. This decrease occurred in virtually every expense category as Patriot restructured itself to achieve efficiencies and provide better service.
At March 31, 2014 total assets were $562 million compared with $609 million a year ago. Net loans totaled $415 million at 3/31/14 compared with $462 million a year ago. Deposits were $428 million at 3/31/14 compared with $492 million last year. In connection with Patriot's turnaround, total assets were reduced to maintain capital requirements; with profitability achieved, Patriot is now growing its balance sheet.
Asset quality continues to improve with nonperforming assets totaling $10.4 million at 3/31/14, compared with $22.8 million a year ago. The provision for loan and lease losses stood at $5.5 million at 3/31/14 and $5.7 million at 3/31/13. The allowance now represents 1.30% of total loans and 53.9% of nonperforming loans. For the first quarter of 2014, the company had net charge-offs of $201,000 compared to $269,000 in the first quarter of 2013.
At March 31, 2014, stockholders' equity was $42.6 million and book value was $1.09 per share. Patriot's leverage capital ratio was 9.56% as of March 31, 2014. The Tier I Risk based capital ratio was 12.87% and the Total Risk based capital ratio was 14.12%. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines.
"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 effect of changes in regulations applicable to Bancorp and the Bank and the conduct of its business, (5) changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks, (6) the ability of competitors that are larger than Bancorp to provide products and services which it is impracticable for Bancorp to provide, (7) 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, (8) 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, (9) 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, (10) the application of generally accepted accounting principles, consistently applied, (11) the fact that one period of reported results may not be indicative of future periods, (12) 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. | |||
| STATEMENTS OF OPERATIONS | |||
| (Unaudited) | Three Months Ended | ||
| Dollars in thousands, except per share data | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
| Interest and dividend income | |||
| Interest and fees on loans | $ 4,691 | $ 5,037 | $ 5,196 |
| Interest on investment securities | 135 | 156 | 248 |
| Dividends on investment securities | 41 | 26 | 29 |
| Other interest income | 12 | 11 | 28 |
| Total interest and dividend income | 4,879 | 5,230 | 5,501 |
| Interest expense | |||
| Interest on deposits | 637 | 767 | 1,129 |
| Interest on Federal Home Loan Bank borrowings | 33 | 30 | 351 |
| Interest on subordinated debt | 200 | 71 | 71 |
| Interest on other borrowings | -- | -- | 76 |
| Total interest expense | 870 | 868 | 1,627 |
| Net interest income | 4,009 | 4,362 | 3,874 |
| Provision for loan losses | -- | -- | (30) |
| Net interest income after provision for loan losses | 4,009 | 4,362 | 3,904 |
| Non-interest income | |||
| Mortgage banking activity | -- | (6) | 46 |
| Loan application, inspection and processing fees | 66 | 41 | 38 |
| Fees and service charges | 219 | 185 | 171 |
| Earnings on cash surrender value of life insurance | 121 | 126 | 127 |
| Other income | 187 | 264 | 105 |
| Total non-interest income | 593 | 610 | 487 |
| Non-interest expense | |||
| Salaries and benefits | 1,971 | 1,962 | 3,005 |
| Occupancy and equipment expense | 922 | 954 | 1,039 |
| Data processing | 250 | 436 | 371 |
| Professional services and other outside services | 471 | 436 | 889 |
| Advertising and promotional expenses | 51 | 60 | 42 |
| Loan administration and processing expenses | 17 | 28 | 77 |
| Regulatory assessments | 230 | 239 | 374 |
| Insurance expense | 97 | 64 | 79 |
| Other real estate operations | 16 | 121 | 2 |
| Material and communications | 93 | 95 | 106 |
| Restructuring charges and asset disposals | -- | (340) | -- |
| Other operating expenses | 165 | 285 | 385 |
| Total non-interest expense | 4,283 | 4,340 | 6,369 |
| Income (loss) before income taxes | 319 | 632 | (1,978) |
| Benefit for income taxes | -- | (318) | (21) |
| Net income (loss) | $ 319 | $ 950 | $ (1,957) |
| Basic and diluted income (loss) per share | $ 0.01 | $ 0.02 | $ (0.05) |
| PATRIOT NATIONAL BANCORP, INC. | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (Unaudited) | |||
| Dollars in thousands | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
| Assets | |||
| Noninterest bearing deposits and cash | $ 1,503 | $ 1,570 | $ 3,338 |
| Interest bearing deposits | 58,254 | 33,296 | 57,714 |
| Short-term investments | -- | -- | 711 |
| Total cash and cash equivalents | 59,757 | 34,866 | 61,763 |
| Securities-available for sale | 36,815 | 37,701 | 41,105 |
| Other investments | 4,450 | 4,450 | 3,500 |
| FRB & FHLB stock | 5,587 | 5,587 | 5,837 |
| Total securities | 46,852 | 47,738 | 50,442 |
| Gross loans | 420,603 | 423,829 | 468,210 |
| Allowance for loan losses | (5,480) | (5,681) | (5,717) |
| Net loans | 415,123 | 418,148 | 462,493 |
| Accrued interest and dividends receivable | 1,578 | 1,566 | 1,886 |
| Premises and equipment, net | 14,866 | 15,061 | 4,327 |
| Cash surrender value of life insurance | 22,146 | 22,025 | 21,629 |
| Other real estate owned | 264 | -- | 3,765 |
| Deferred tax asset, net (1) | -- | -- | -- |
| Other assets | 1,902 | 1,844 | 2,538 |
| Total Assets | $ 562,488 | $ 541,248 | $ 608,843 |
| Liabilities and Shareholders' Equity | |||
| Deposits | |||
| Noninterest bearing deposits | $ 57,967 | $ 55,358 | $ 59,814 |
| Interest bearing deposits | 370,002 | 374,846 | 431,872 |
| 427,969 | 430,204 | 491,686 | |
| FHLB advances and repurchase agreements | 80,000 | 57,000 | 57,000 |
| Subordinated debt | 8,248 | 8,248 | 8,248 |
| Accrued expenses and other liabilities | 3,659 | 3,955 | 4,235 |
| Total Liabilities | 519,876 | 499,407 | 561,169 |
| Common stock | 391 | 388 | 385 |
| Treasury stock | (160) | (160) | (160) |
| Additional paid-in capital | 105,540 | 105,484 | 105,363 |
| Accumulated deficit | (62,365) | (62,684) | (57,352) |
| Accumulated other comprehensive income | (794) | (1,187) | (562) |
| Total Shareholders' Equity | 42,612 | 41,841 | 47,674 |
| Total Liabilities and Shareholders' Equity | $ 562,488 | $ 541,248 | $ 608,843 |
| (1) Includes the deferred tax asset and a full valuation allowance of $17.9 million, $18.1 million and $15.8 million, respectively. | |||
| PATRIOT NATIONAL BANCORP, INC. | ||||||
| FINANCIAL RATIOS AND OTHER DATA | ||||||
| (Unaudited) | ||||||
| Dollars in thousands, except per share data | ||||||
| Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | ||||
| Asset Quality: | ||||||
| Nonaccrual loans | $ 10,166 | $ 12,308 | $ 19,019 | |||
| Other real estate owned | 264 | -- | 3,765 | |||
| Total nonperforming assets | $ 10,430 | $ 12,308 | $ 22,784 | |||
| Nonaccrual loans / loans | 2.42% | 2.90% | 4.06% | |||
| Nonperforming assets / assets | 1.85% | 2.27% | 3.74% | |||
| Allowance for loan losses | $ 5,480 | $ 5,681 | $ 5,717 | |||
| Allowance for loan losses / loans | 1.30% | 1.34% | 1.22% | |||
| Allowance / nonaccrual loans | 53.91% | 46.16% | 30.06% | |||
| Gross loan charge-offs for the quarter | $ 217 | $ 828 | $ 306 | |||
| Gross loan recoveries for the quarter | $ 16 | $ 293 | $ 37 | |||
| Net loan charge-offs for the quarter | $ 201 | $ 535 | $ 269 | |||
| Capital Data: | ||||||
| Book value per share (1) | $ 1.09 | $ 1.08 | $ 1.24 | |||
| Tangible book value per share (2) | $ 1.09 | $ 1.08 | $ 1.24 | |||
| Shares outstanding | 39,122,459 | 38,786,680 | 38,480,114 | |||
| (1) Book value per share represents shareholders' equity divided by outstanding shares. | ||||||
| (2) Tangible book value per share represents shareholders' equity less intangible assets divided by outstanding shares. | ||||||
Patriot National Bank 900 Bedford Street Stamford, CT 06901 Kenneth T. Neilson President & CEO 203 252-5962 Christina L. Maier EVP & CFO 203 252-5901
