Exhibit 99.1

 

Patriot National Bancorp achieves record full year pre-tax income of $7.0 million- its strongest full year operating performance ever recorded

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Reports fourth quarter pre-tax income of $1.1 million and Net Income of $600 thousand; Declares Quarterly Dividend

STAMFORD, CT – February 2, 2018 (GLOBE NEWSWIRE) – Patriot National Bancorp, Inc. (“Patriot”, “Bancorp”) (NASDAQ: PNBK), the parent company of Patriot Bank, N.A. (the “Bank”), today announced quarterly pre-tax earnings of $1.1 million and quarterly net income of $600 thousand, or $0.15 per fully diluted share.

Full year pre-tax income in 2017 was $7.0 million, $3.9 million higher than the $3.1 million reported in 2016. For the year ended December 31, 2017, net income was $4.1 million, or $1.06 per diluted share, more than double the prior year results of $1.9 million, or $0.49 per fully diluted share.

CEO Michael Carrazza stated: “2017’s full year results represent a major earnings achievement for Patriot, and marks the strongest earnings year in Patriot’s history. This is further confirmation that the growth blueprint put in place is yielding successful, value enhancing results. We remain keenly focused on pursuing certain strategic initiatives that support growth and diversification of our banking franchise.”

Richard Muskus, Patriot’s President added, “We have a strong loan pipeline, a dedicated team of highly qualified lending and branch management professionals, and prudent underwriting standards. We will continue to add to our product lines and enhance service offerings to our customers. These are the primary areas of focus and will continue to add to our profitability and franchise value.”

The reported fourth quarter net income, which included $601 thousand of non-recurring special project costs, compares to net income of $1 million, $0.26 per fully diluted share, in the third quarter of 2017 and $1 million, $0.27 per share, for the same quarter a year ago.

With respect to income taxes, a net provision of $502 thousand was taken in the fourth quarter. This net tax provision was comprised of two significant and mostly offsetting adjustments. The provision increased by $2.81 million as a result of a reduction in value of the Company’s deferred tax asset due to the change in corporate tax rates to 21% enacted in December of 2017. At the same time, the income tax provision was reduced by $2.77 million, as a result of the recognition of deferred tax benefits due to a change in the classification of certain prior period tax losses that were previously deemed to have been subject to IRC Section 382 limitations.

As of December 31, 2017 shareholders’ equity was $66.7 million, an increase of $4.2 million from a year ago. The Company’s book value per share increased to $17.12 at December 31, 2017 as compared to $16.08 a year ago.

Patriot Bank’s deposits continued to rise and are up 20% year-over-year, with loan growth of 24% from the prior year fueling a strong growth in net interest income.   Net interest income climbed 19% from the fourth quarter of 2016 and is 16% higher in the full year period.

In addition to the announcement of quarterly earnings, Patriot also announced today the declaration of its third consecutive quarterly dividend of $0.01 per share which will be paid February 16, 2018.

The comparative results for the full year 2016 and 2017 include the impact of a troubled loan that was ultimately resolved. In the second quarter of 2016, the Bank recorded a significant loan loss provision, 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 consisted of losses and recoveries related to this loan, net income for the year was 6% higher than in 2016.

During the year, total assets grew by $95 million (13%), to $852 million, up from $757 million. Loans totaled $720 million as of year-end 2017, up 1% from the $710 million reported at September 30, 2017, and up 24% from the $582 million reported at December 31, 2016.

Deposits increased during the quarter to $637 million and were up 20% year-over-year as compared with $529 million at the end of 2016. Deposit growth remains a key initiative to keep pace with Patriot’s overall growth prospects.

Net interest income was $7.0 million in the quarter, essentially unchanged from the third quarter of 2017 and up 19% from the corresponding 2016 period. Net interest income of $25.9 million in the year-to-date period was 16% higher than the $22.4 million in the year ending December 31, 2016. Net interest margin was 3.51% for the quarter and 3.58% for the 2017 year-to-date period, as compared to 3.65 % in the prior quarter and 3.78% in 2016.

The provision for loan losses in the quarter was $87 thousand, with overall credit quality remaining strong. The year-to-date credit in the provision of $857 thousand reflects the previously noted recovery. The provision for loan losses was $150 thousand in the fourth quarter of 2016 and $2.5 million for the year ended December 31, 2016.

Non-interest income was $432 thousand in the quarter, 12% higher than the prior quarter. Year-to-date non-interest income of $1.4 million was 7% lower than the prior year.

Non-interest expense increased $1 million over the prior quarter and year-to-date non-interest expenses increased $2.8 million over the same period in 2016. The quarter and full year expenses were impacted by non-recurring project costs of $601 thousand in the quarter ($640 thousand for the full year) associated with the pending Prime acquisition and an income tax related consulting project.

The Bank’s capital ratios continue to be strong, as the Bank maintained its “well capitalized” regulatory status. As of December 31, 2017, Tier 1 leverage ratio was 9.36%, Tier 1 risk based capital was 10.55% and total risk based capital was 11.41%.

* * * * *

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.

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

Dollars in thousands	December 31, 2017			September 30, 2017			December 31, 2016
Assets
Noninterest bearing deposits and cash	$	3,607		$	3,337		$	2,596
Interest bearing deposits		45,634			25,075			89,693
Total cash and cash equivalents		49,241			28,412			92,289
Available-for-sale securities, at fair value		25,576			29,586			24,428
Other investments, at cost		4,450			4,450			4,450
Total investment securities		30,026			34,036			28,878
FRB & FHLB stock, at cost		8,391			8,813			7,718
Gross loans receivable		719,647			710,118			581,657
Allowance for loan losses		(6,297	)		(6,222	)		(4,675	)
Net loans receivable		713,350			703,896			576,982
Accrued interest and dividends receivable		3,496			3,501			2,726
Premises and equipment, net		35,358			34,713			32,759
Other real estate owned		-			851			851
Deferred tax asset, net		10,397			10,686			12,632
Other assets		1,821			1,823			1,819
Total assets	$	852,080		$	826,731		$	756,654
Liabilities and Shareholders' Equity
Deposits
Noninterest bearing deposits	$	81,197		$	76,875		$	76,772
Interest bearing deposits		556,242			528,539			452,552
		637,439			605,414			529,324
Federal Home Loan Bank and correspondent bank borrowings		120,000			130,000			138,000
Senior notes, net		11,703			11,684			11,628
Junior subordinated debt owed to unconsolidated trust		8,086			8,085			8,079
Note Payable		1,580			1,627			1,769
Advances from borrowers for taxes and insurance		2,829			1,799			2,676
Accrued expenses and other liabilities		3,694			1,812			2,608
Total liabilities		785,331			760,421			694,084
Common stock		40			40			40
Additional paid-in capital		106,875			106,834			106,729
Accumulated deficit		(38,832	)		(39,394	)		(42,902	)
Treasury stock, at cost		(1,179	)		(1,179	)		(1,177	)
Accumulated other comprehensive (loss) gain		(155	)		9			(120	)
Total Shareholders' Equity		66,749			66,310			62,570
Total Liabilities and Shareholders' Equity	$	852,080		$	826,731		$	756,654

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)	Three Months Ended						Twelve Months Ended
Dollars in thousands, except per share data	December 31, 2017		September 30, 2017		December 31, 2016		December 31, 2017			December 31, 2016
Interest and dividend income
Interest and fees on loans	$	8,550	$	8,522	$	6,579	$	31,270		$	24,391
Interest on investment securities		294		275		140		982			544
Dividends on investment securities		103		105		90		383			353
Other interest income		66		65		25		214			120
Total interest and dividend income		9,013		8,967		6,834		32,849			25,408
Interest expense
Interest on deposits		1,491		1,339		724		4,948			2,242
Interest on Federal Home Loan Bank borrowings		193		248		113		702			371
Interest on Note Payable - long term senior debt		229		229		25		915			25
Interest on subordinated debt		94		92		84		360			334
Interest on other borrowings		7		7		11		31			36
Total interest expense		2,014		1,915		957		6,956			3,008
Net interest income		6,999		7,052		5,877		25,893			22,400
Provision (credit) for loan losses		87		545		150		(857	)		2,464
Net interest income after provision (credit) for loan losses		6,912		6,507		5,727		26,750			19,936
Non-interest income
Loan application, inspection and processing fees		12		25		28		73			180
Fees and service charges		146		149		149		590			600
Rental Income		97		117		103		399			414
Other income		177		95		88		382			362
Total non-interest income		432		386		368		1,444			1,556
Non-interest expense
Salaries and benefits		3,247		2,741		2,155		10,915			9,489
Occupancy and equipment expense		755		796		797		3,133			3,110
Data processing		353		340		125		1,139			939
Professional services and other outside services		438		410		565		2,050			1,747
Merger/tax initiative project expenses		601		39		-		640			-
Advertising and promotional expenses		56		81		53		322			394
Loan administration and processing expenses		18		22		24		63			54
Regulatory assessments		272		230		151		844			603
Insurance expense		52		66		54		233			222
Material and communications		94		97		88		381			402
Other operating expenses		356		400		402		1,452			1,395
Total non-interest expense		6,242		5,222		4,414		21,172			18,355
Income before income taxes		1,102		1,671		1,681		7,022			3,137
Expense for Income taxes		502		658		636		2,875			1,207
Net income	$	600	$	1,013	$	1,045	$	4,147		$	1,930
Basic income per share	$	0.15	$	0.26	$	0.27	$	1.06		$	0.49
Diluted income per share	$	0.15	$	0.26	$	0.27	$	1.06		$	0.49

PATRIOT NATIONAL BANCORP, INC. AND SUBSIDIARY

FINANCIAL RATIOS AND OTHER DATA

(Unaudited)

Dollars in thousands, except shares outstanding and per share data

	Quarter Ended
	December 31, 2017			September 30, 2017			December 31, 2016
Quarterly Performance Data:
Net Income	$	600		$	1,013		$	1,045
Return on Average Assets		0.29	%		0.49	%		0.62	%
Return on Average Equity		3.65	%		6.05	%		6.55	%
Net Interest Margin		3.51	%		3.65	%		3.98	%
Efficiency Ratio		84	%		70	%		71	%
Qtr % increase loans		1	%		5	%		4	%
Qtr % increase deposits		5	%		8	%		12	%
Asset Quality:
Nonaccrual loans	$	3,781		$	2,051		$	4,751
Other real estate owned		-			851			851
Total nonperforming assets	$	3,781		$	2,902		$	5,602
Nonaccrual loans / loans		0.53	%		0.29	%		0.82	%
Nonperforming assets / assets		0.44	%		0.35	%		0.74	%
Allowance for loan losses	$	6,297		$	6,222		$	4,675
Allowance for loan losses / loans		0.88	%		0.88	%		0.80	%
Allowance / nonaccrual loans		166.5	%		303.4	%		98.4	%
Gross loan charge-offs for the quarter	$	17		$	275		$	2,935
Gross loan (recoveries) for the quarter	$	(4	)	$	(8	)	$	(132	)
Net loan charge-offs (recoveries) for the quarter	$	13		$	267		$	2,803
Capital Data and Capital Ratios
Book value per share (1)	$	17.12		$	17.02		$	16.08
Shares outstanding		3,899,675			3,895,720			3,891,897
Bank Capital Ratios:
Leverage Ratio		9.36	%		9.57	%		10.52	%
Tier 1 Capital		10.55	%		10.69	%		11.18	%
Total Risk Based Capital		11.41	%		11.55	%		11.93	%

(1) Book value per share represents shareholders' equity divided by outstanding shares.

Net Income excluding Loan Loss Provision

The following table represents a reconciliation of the reported net income to the net income excluding loan loss provision for the three and twelve months ended December 31, 2017 and 2016, and the three months ended September 30, 2017. The table is reported in a format that is not in compliance with Generally Accepted Accounting Principles (non-GAAP) but is beneficial to the reader and provides enhanced comparability due to the loan loss and subsequent loan recovery associated with the troubled loan mentioned previously. Company management finds this measure useful when assessing the period to period change in core performance of the business.

	Quarter Ended									Year Ended December 31,
	December 31, 2017			September 30, 2017			December 31, 2016			2017			2016
Net Income reported	$	600		$	1,013		$	1,045		$	4,147		$	1,930
Tax Provision	$	502		$	658		$	636		$	2,875		$	1,207
Loan Loss Provision	$	87		$	545		$	150		$	(857	)	$	2,464
Effective tax rate		45.55	%		39.38	%		37.83	%		40.94	%		38.48	%
Pre-Tax Income Reported	$	1,102		$	1,671		$	1,681		$	7,022		$	3,137
Pre-tax Income excluding loan loss provision	$	1,189		$	2,216		$	1,831		$	6,165		$	5,601
Net Income excluding loan loss provision	$	647		$	1,343		$	1,138		$	3,641		$	3,446

Contacts:

Patriot Bank, N.A.

900 Bedford Street

Stamford, CT 06901

www.BankPatriot.com

Richard Muskus

President

203-252-5939

Joseph Perillo

Chief Financial Officer

203-252-5954

Michael Carrazza

CEO and Chairman

203-251-8230