EX-99.1 2 d356643dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

 

Contact:      
Patriot National Bank    Christopher D. Maher    Robert F. O’Connell
900 Bedford Street    President & CEO    Sr. EVP & CFO
Stamford, CT 06901    203 251-8265    203 252-5926

Patriot National Bancorp Earns $546,000 in First Quarter;

Increasing Profits and Strong Net Interest Margin Highlight Continuing Success of Turnaround Plan

Stamford, Connecticut – May 18, 2012, Patriot National Bancorp, Inc. (NASDAQ Global Market “PNBK,” “Patriot”), the parent of Patriot National Bank (the “Bank”), today reported it earned $546,000, or $0.01 per diluted share, in the first quarter of 2012 compared to earnings of $443,000, or $0.01 per diluted share, in the fourth quarter of 2011 and a net loss of $9.0 million, or $0.23 loss per share, in the first quarter a year ago. First quarter 2011 results included a $6.2 million loss on a bulk sale of non-performing assets. The improving results were driven by the continued success of management’s recovery plan.

“We are pleased to post a profit for the third consecutive quarter on the heels of Patriot’s turnaround. Both top-and bottom line improvements were recognized this quarter,” said Michael Carrazza, Chairman of the Board. “Continued efforts remain focused on operational refinements and varying paths of enterprise and product growth.”

Financial Highlights:

 

   

Patriot earned $546,000, or $0.01 per diluted share, in the quarter ended March 31, 2012 compared to a net loss of $9.0 million, or $0.23 loss per share, in the first quarter a year ago.

 

   

The net interest margin increased 39 basis points to 3.25% for the quarter ended March 31, 2012, compared to 2.86% in the first quarter a year ago.

 

   

Non-accrual loans decreased 24.8% to $15.5 million at March 31, 2012, or 3.3%, of total loans as compared to $20.7 million three months earlier.

 

   

Other real estate owned (OREO) decreased 47.1% to $1.5 million at March 31, 2012 compared to $2.8 million three months earlier.

 

   

Non-performing assets, which consist of non-accrual loans and OREO, declined to $17.0 million, or 2.5% of total assets compared to $23.4 million, or 3.5% just three months earlier, and $33.5 million, or 4.7% of total assets a year ago.

 

   

Non-interest income increased 28.6% compared to the same quarter in the prior year as a result of a gain from the sale of residential loans.

 

   

Non-interest operating expenses were 17.4% lower in the current quarter compared to the same period in the prior year resulting from lower salaries and benefits, occupancy and OREO expenses.

 

   

Total Capital to Risk Weighted Assets was 16.0% for Patriot and 15.5% for the Bank at March 31, 2012.


PNBK 1Q12 Results

May 18, 2012

 

Asset Quality

“Improving the risk profile of Patriot and aggressively managing our troubled assets has been and will remain a priority focus for the company. Non-performing assets have declined for ten consecutive quarters. In addition to asset quality improvements, we continue to focus on increasing revenue and decreasing operating expenses to improve earnings. Staff reductions in the first quarter and the planned closing of a branch in the second quarter will reduce future expenses by approximately $1.0 million per annum,” said Christopher Maher, President and Chief Executive Officer.

Total non-accrual loans decreased to $15.5 million, or 3.3% of gross loans, at March 31, 2012 compared to $20.7 million, or 4.1% of gross loans three months earlier, and $32.5 million, or 6.8% of gross loans, a year ago.

Due to the sale of two properties, other real estate owned (OREO) decreased 47.1% to $1.5 million at March 31, 2012 compared to $2.8 million three months earlier. There are now only two properties remaining in OREO. Non-performing assets, which consist of non-accrual loans and OREO, declined 27.5% to $17.0 million, or 2.5% of total assets, at March 31, 2012 compared to $23.4 million, or 3.5% of total assets, at December 31, 2011, and $33.5 million, or 4.7% of total assets, at March 31, 2011.

The reduction in total loans due to the sale of $66.4 million of residential real estate loans and the improved credit quality of the overall loan portfolio resulted in a release of $845,000 from the loan loss reserve for the first quarter of 2012, compared to the $7.0 million provision recorded in the first quarter last year, of which $6.0 million was related to the bulk loan sale of non-performing assets.

The allowance for loan losses totaled $8.5 million, or 1.78% of gross loans, at March 31, 2012 compared to $9.4 million, or 1.84%, of gross loans, at December 31, 2011, and $12.2 million, or 2.55%, of gross loans a year ago.

Balance Sheet Review

“During the first quarter we sold $65.8 million in residential loans resulting in a decrease in net loans compared to the preceding quarter end,” added Mr. Maher. “However, our continued focus on growing the loan portfolio is evident by our loan pipeline, which was $105 million at March 31, 2012.” Loans outstanding were $474.7 million at March 31, 2012, compared to $510.6 million at December 31, 2011 as a result of the previously mentioned loan sale, and $479.1 million a year ago.

While total deposits decreased compared to a year ago, non-interest bearing accounts increased 6.0%, representing Patriot’s planned strategy to reduce higher cost certificates of deposit and replace them with lower cost deposits. Deposits totaled $539.6 million at March 31, 2012, compared to $544.9 million at December 31, 2011, and $581.3 million a year ago. Non-interest bearing accounts increased to $59.0 million at March 31, 2012 compared to $55.7 million a year earlier.

Total assets were $671.1 million at March 31,2012 compared to $709.7 million at March 31, 2011 primarily as a result of the reduction in high cost deposits.


PNBK 1Q12 Results

May 18, 2012

 

Income Statement Review

Patriot’s first quarter net interest income increased 5.3% to $5.2 million, compared to $4.9 million in the first quarter a year ago. Interest income decreased 2.4% compared to the first quarter a year ago as a result of lower average outstanding loan balances and the lower interest rate environment. Interest expense decreased 16.6% compared to the first quarter a year ago due to the reduction in certificates of deposit and the increase in non-interest bearing deposits. As a result, Patriot’s first quarter net interest margin increased 39 basis points to 3.25%, compared to 2.86% in the first quarter a year ago.

First quarter non-interest income increased 28.6% to $750,000 compared to $583,000 in the first quarter a year ago. The increase was primarily due to a gain on sale of residential loans of $264,000, and was partially offset by lower fees and service charges on deposit accounts of $53,000.

“We made a concerted effort to reduce our operating costs and as a result operating expenses, including the $368,000 impact of a restructuring charge recorded in the first quarter of 2012, declined 17.4% compared to the first quarter a year ago,” Mr. Maher continued. Excluding the restructuring charge, total non-interest expenses declined 22.3% compared to the first quarter a year ago. Non-interest expenses declined $1.3 million to $6.2 million in the first quarter compared to $7.5 million in the first quarter a year ago. Salary and employee benefits were down $323,000, or 10.0%, and occupancy and equipment expenses were down $231,000, or 17.0%, compared to the first quarter a year ago. In addition, OREO expenses were $421,000 lower due to $200,000 in gains recognized on the sale of two properties and lower operating costs relating to fewer properties being managed.

Capital

The capital ratios at March 31, 2012 for Patriot National Bancorp, Inc. and Patriot National Bank were:

 

     Patriot National
Bancorp, Inc.
    Patriot National
Bank
   

Well Capitalized

Requirement

 

Total Capital (to Risk Weighted Assets)

     16.00     15.52     10.00

Tier 1 Capital (to Risk Weighted Assets)

     14.74     14.26     6.00

Tier 1 Capital (to Average Assets)

     8.89     8.60     5.00

About the Company

Patriot National Bank is headquartered in Stamford, Connecticut and currently has 15 full service branches, 12 in Connecticut and three in New York. It also has a loan production office in Stamford, CT.

Statements in this earnings release that are not historical facts are considered to be forward-looking statements. Such statements include, but are not limited to, statements regarding management beliefs and expectations, based upon information available at the time the statements are made, regarding future plans, objectives and performance. All forward-looking statements are subject to risks and uncertainties, many of which are beyond management’s control and actual results and performance may differ significantly from those contained in forward-looking statements. Bancorp intends any forward-looking statement to be covered by the Litigation Reform Act of 1995 and is including this statement for purposes of said safe harbor provisions. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Bancorp undertakes no obligation to update any forward-looking statements to reflect events or circumstances that occur after the date as of which such statements are made. A discussion of certain risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements is included in Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2011.


PNBK 1Q12 Results

May 18, 2012

 

PATRIOT NATIONAL BANCORP, INC.

STATEMENTS OF OPERATIONS

(unaudited)

Dollars in thousands, except per share data

 

     Three Months Ended  
     Mar. 31, 2012     Dec. 31, 2011     Mar. 31, 2011  

Interest and dividend income

      

Interest and fees on loans

   $ 6,666      $ 6,277      $ 6,957   

Interest on investment securities

     477        565        274   

Dividends on investment securities

     33        33        70   

Interest on federal funds sold

     —          —          4   

Other interest income

     11        16        62   
  

 

 

   

 

 

   

 

 

 

Total interest and dividend income

     7,187        6,891        7,367   
  

 

 

   

 

 

   

 

 

 

Interest expense

      

Interest on deposits

     1,517        1,480        1,865   

Interest on Federal Home Loan Bank borrowings

     357        362        419   

Interest on subordinated debt

     76        73        71   

Interest on other borrowings

     77        78        76   
  

 

 

   

 

 

   

 

 

 

Total interest expense

     2,027        1,993        2,431   
  

 

 

   

 

 

   

 

 

 

Net interest income

     5,160        4,898        4,936   

Provision for loan losses

     (845     (1,000     6,982   
  

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     6,005        5,898        (2,046
  

 

 

   

 

 

   

 

 

 

Non-interest income

      

Mortgage brokerage referral fees

     12        30        13   

Loan origination and processing fees

     15        17        17   

Fees and service charges

     228        229        281   

Gains on sale of loans

     264        —          —     

Gain (loss) on sale of investment securities

     (8     330        —     

Earnings on cash surrender value of life insurance

     143        145        168   

Other income

     96        86        104   
  

 

 

   

 

 

   

 

 

 

Total non-interest income

     750        837        583   
  

 

 

   

 

 

   

 

 

 

Non-interest expense

      

Salaries and benefits

     2,891        3,151        3,214   

Occupancy and equipment expense, net

     1,124        1,147        1,355   

Data processing

     346        307        328   

Professional services and other outside services

     615        843        882   

Advertising and promotional expenses

     18        52        158   

Loan administration and processing expenses

     8        97        37   

Regulatory assessments

     410        321        611   

Insurance expense

     169        183        231   

Other real estate operations

     (150     (141     271   

Material and communications

     131        157        200   

Restructuring charges

     368        —          —     

Other operating expenses

     279        175        233   
  

 

 

   

 

 

   

 

 

 

Total non-interest expenses

     6,209        6,292        7,520   
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     546        443        (8,983

Provision for income taxes

     —          —          —     
  

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 546      $ 443      $ (8,983
  

 

 

   

 

 

   

 

 

 

Basic and diluted income (loss) per share

   $ 0.01      $ 0.01      $ (0.23
  

 

 

   

 

 

   

 

 

 


PNBK 1Q12 Results

May 18, 2012

 

(Dollars in thousands, except per share data)

(Unaudited)

 

     Mar. 31, 2012     Dec. 31, 2011     Mar. 31, 2011  

Assets

      

Cash and due from banks

   $ 103,264      $ 54,716      $ 146,548   

Federal funds sold

     —          —          10,000   

Short-term investments

     710        709        501   
  

 

 

   

 

 

   

 

 

 

Total cash and cash equivalents

     103,974        55,425        157,049   

Securities-available for sale

     58,592        66,470        38,539   

Other investments

     3,500        3,500        3,500   

FRB & FHLB stock

     6,036        6,215        6,684   
  

 

 

   

 

 

   

 

 

 

Total securities

     68,128        76,185        48,723   

Gross loans

     474,726        510,612        479,078   

Allowance for loan losses

     (8,461     (9,385     (12,209
  

 

 

   

 

 

   

 

 

 

Net loans

     466,265        501,227        466,869   

Loans held for sale

     —          250        —     

Accrued interest and dividend receivable

     2,243        2,453        2,326   

Premise and equipment, net

     4,882        4,147        4,915   

Cash surrender value of life insurance

     21,127        20,985        20,517   

Other real estate owned

     1,462        2,763        950   

Deferred tax asset, net (1)

     —          —          —     

Other assets

     3,047        2,381        8,365   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 671,128      $ 665,816      $ 709,714   
  

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

      

Deposits

      

Non interest bearing deposits

   $ 59,049      $ 65,613      $ 55,692   

Interest bearing deposits

     480,541        479,296        525,591   
  

 

 

   

 

 

   

 

 

 
     539,590        544,909        581,283   

FHLB advances and repurchase agreements

     67,000        57,000        57,000   

Subordinated debt

     8,248        8,248        8,248   

Accrued expenses and other liabilities

     5,052        5,110        4,990   
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     619,890        615,267        651,521   

Common stock

     384        384        384   

Treasury stock

     (160     (160     (160

Additional paid-in capital

     105,130        105,050        105,050   

Accumulated deficit

     (54,313     (54,859     (48,382

Accumulated other comprehensive income

     197        134        1,301   
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     51,238        50,549        58,193   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 671,128      $ 665,816      $ 709,714   
  

 

 

   

 

 

   

 

 

 

 

(1) Includes the deferred tax asset and a full valuation allowance of $14.1 million, $14.4 million and $16.1 million respectively.


PNBK 1Q12 Results

May 18, 2012

 

Financial Ratios and Other Data

(Dollars in thousands, except per share data)

(Unaudited)

 

     Mar. 31,
2012
    Dec. 31,
2011
    Mar. 31,
2011
 

Asset Quality:

      

Nonaccrual loans

   $ 15,545      $ 20,683      $ 32,530   

Other real estate owned

     1,462        2,763        950   
  

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 17,007      $ 23,446      $ 33,480   
  

 

 

   

 

 

   

 

 

 

Nonaccrual loans / portfolio loans

     3.27     4.05     6.79

Nonperforming assets / assets

     2.53     3.52     6.99

Allowance for loan losses

   $ 8,461      $ 9,385      $ 12,208   

Allowance for loan losses / portfolio loans

     1.78     1.84     2.55

Allowance / nonaccrual loans

     54.43     45.37     37.50

Gross loan charge-offs for the quarter

   $ 102      $ 847      $ 4,154   

Gross loan recoveries for the quarter

   $ 24      $ 74      $ 21   

Net loan charge-offs for the quarter

   $ 78      $ 773      $ 4,133   

Capital Data:

      

Book value per share (1)

   $ 1.33      $ 1.32      $ 1.52   

Tangible book value per share (2)

   $ 1.33      $ 1.32      $ 1.52   

Shares outstanding

     38,467,073        38,362,727        38,326,727   

 

(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.

Note: Transmitted on Business Wire on May 18, 2012 at 4:00 p.m. EDT.