UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 2000 Commission file number 000-29599
PATRIOT NATIONAL BANCORP, INC.
(Name of small business issuer as specified in its charter)
Connecticut 06-1559137
(State of incorporation) (IRS employer identification number)
900 Bedford Street, Stamford, Connecticut 06901
(Address of principal executive offices)
(203) 324-7500
Issuer's telephone number:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Common stock, $2.00 par value per share, 2,160,952 shares issued and outstanding
as of the close of business April 30, 2000.
Transitional Small Business Disclosure Format: Yes No X
------- -------
<PAGE>
Table of Contents
Part I Page
- ------ ----
Item 1. Consolidated Financial Statements 1
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
Part II
- -------
Item 6. Exhibits and reports on Form 8-K 15
<PAGE>
Part 1 -- Financial Information
Item 1. Financial Statements
Patriot National Bancorp, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
Assets 2000 1999
---------------------------------------
(Unaudited)
<S> <C> <C>
Cash and due from banks ............................................... $ 6,056,756 $ 2,685,031
Federal funds sold .................................................... 16,700,000 18,900,000
Short-term investments -- commercial paper ............................ - 10,976,264
---------------------------------------
Cash and cash equivalents ................................... 22,756,756 32,561,295
Available for sale securities (at fair value) ......................... 19,304,160 19,984,309
Held to maturity securities ........................................... 12,300,638 12,301,485
Federal Reserve Bank stock ............................................ 410,700 410,700
Federal Home Loan Bank stock .......................................... 307,000 307,000
Loans receivable (net of allowance for loan losses of
$1,464,583 in 2000 and $1,360,183 in 1999) .......................... 112,093,273 107,769,911
Accrued interest receivable ........................................... 1,177,307 980,777
Bank premises and equipment, net ...................................... 1,019,878 953,656
Deferred tax asset, net ............................................... 597,658 562,928
Goodwill (net of accumulated amortization of
$89,179 in 2000 and $58,180 in 1999) ................................ 1,146,949 1,177,948
Other assets (net of accumulated amortization of
$17,872 in 2000 and $17,285 in 1999) ................................ 347,633 184,688
---------------------------------------
Total assets ................................................ $ 171,461,952 $ 177,194,697
=======================================
Liabilities and Shareholders' Equity
Deposits
Non-interest bearing deposits .................................... $ 16,549,268 $ 12,630,926
Interest bearing deposits ........................................ 140,191,949 150,115,428
---------------------------------------
Total deposits ............................................. 156,741,217 162,746,354
Capital lease obligation ............................................ 541,682 563,687
Collateralized borrowings ........................................... 325,000 325,000
Accrued expenses and other liabilities .............................. 585,671 323,568
---------------------------------------
Total liabilities ........................................... 158,193,570 163,958,609
---------------------------------------
Shareholders' equity
Common stock, $2 par value;
5,333,333 shares authorized;
issued and outstanding shares: 2,160,952 ......................... 4,321,904 4,321,904
Paid-in capital .................................................... 9,807,957 9,807,957
Accumulated deficit ................................................ (548,718) (635,331)
Accumulated other comprehensive income - net
unrealized loss on available for sale
securities ....................................................... (312,761) (258,442)
---------------------------------------
Total shareholders' equity .................................. 13,268,382 13,236,088
---------------------------------------
Total liabilities and shareholders' equity .................. $ 171,461,952 $ 177,194,697
=======================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements
1
<PAGE>
Patriot National Bancorp, Inc.
Consolidated Statements of Income
Quarters ended March 31, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
2000 1999
-----------------------------
Interest and Dividend Income
<S> <C> <C>
Interest and fees on loans ............................... $2,524,639 $1,395,279
Interest and dividends on investment secuities ........... 542,890 335,536
Interest on federal funds sold ........................... 286,762 178,039
-----------------------------
Total interest and divided income .......................... 3,354,291 1,908,854
-----------------------------
Interest Expense
Interest on deposits ..................................... 1,809,803 841,028
Interest on capital lease obligation ..................... 18,995 21,789
Interest expense on collateralized borrowings ............ 7,361 --
-----------------------------
Total interest expense ..................................... 1,836,159 862,817
-----------------------------
Net interest income ........................................ 1,518,132 1,046,037
Provision for Loan Losses .................................. 109,500 68,000
-----------------------------
Net interest income after provision for loan losses ........ 1,408,632 978,037
-----------------------------
Non-Interest Income
Mortgage brokerage referral fees ......................... 521,669 --
Fees and service charges ................................. 38,617 33,364
Gains and origination fees from loans sold ............... -- 31,887
Other income ............................................. 12,800 32,228
-----------------------------
Total non-interest income .................................. 573,086 97,479
-----------------------------
Non-Interest Expense
Salaries and benefits .................................... 1,047,154 464,931
Occupancy and equipment expense, net ..................... 186,519 106,817
Professional services .................................... 72,250 41,363
Data processing and other outside services ............... 135,292 48,084
Advertising and promotional expenses ..................... 70,869 58,505
Directors fees and expenses .............................. 25,100 24,140
Forms, printing and supplies ............................. 63,111 36,221
Regulatory assessments ................................... 21,351 10,292
Insurance ................................................ 9,743 6,579
Other operating expenses ................................. 186,466 136,985
-----------------------------
Total non-interest expenses ................................ 1,817,855 933,917
-----------------------------
Income before income taxes ................................. 163,863 141,599
Provision for Income Taxes ................................. 77,250 1,200
-----------------------------
Net income ................................................. $ 86,613 $ 140,399
=============================
Basic income per share ..................................... $ 0.04 $ 0.07
=============================
Diluted income per share ................................... $ 0.04 $ 0.07
=============================
</TABLE>
See accompanying Notes to Consolidated Financial Statements
2
<PAGE>
Patriot National Bancorp, Inc.
Consolidated Statements of Comprehensive Income
Quarters ended March 31, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
2000 1999
------------------------------------
<S> <C> <C>
Net income ....................................... $ 86,613 $ 140,399
Unrealized holding losses on securities:
Unrealized holding losses arising
during the period, net of taxes ................. (54,319) (45,034)
------------------------------------
Comprehensive income ............................. $ 32,294 $ 95,365
====================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements
3
<PAGE>
Patriot National Bancorp, Inc.
Consolidated Statements of Cash Flows
Quarters ended March 31, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
2000 1999
--------------------------------
Cash Flows from Operating Activities
<S> <C> <C>
Net income ............................................................ $ 86,613 $ 140,399
Adjustments to reconcile net income to net cash provided
by operating activites:
Amortization and accretion of investment
premiums and discounts, net ........................................ (1,549) 10,134
Provision for loan losses ............................................. 109,500 68,000
Depreciation and amortization ......................................... 90,348 67,502
Directors fees paid by issuance of common stock ....................... -- 7,658
Changes in assets and liabilities:
(Decrease) increase in deferred loan fees .......................... (62,508) 24,602
Increase in accrued interest receivable ............................ (196,530) (181,187)
Increase in other assets ........................................... (163,530) (82,491)
Increase in accrued expenses and other liabilities ................. 262,103 56,308
--------------------------------
Net cash provided by operating activities ............................... 124,447 110,925
--------------------------------
Cash Flows from Investing Activities
Purchases of available for sale securities ............................ -- (499,352)
Purchases of held to maturity securities .............................. -- (8,966,053)
Principal repayments on available for sale securities ................. 593,496 --
Net increase in loans ................................................. (4,370,354) (7,347,640)
Purchases of bank premises and equipment .............................. (124,986) (25,942)
Recoveries on other real estate owned ................................. -- 18,800
--------------------------------
Net cash used in investing activities ................................... (3,901,844) (16,820,187)
--------------------------------
Cash Flows from Financing Activities
Net increase in demand, savings and money market deposits ............. 4,262,767 2,525,650
Net decrease in time certificates of deposit .......................... (10,267,904) (1,257,234)
Principal payments on capital lease obligation ........................ (22,005) (19,211)
--------------------------------
Net cash (used in) provided by financing activities ..................... (6,027,142) 1,249,205
--------------------------------
Net decrease in cash and cash equivalents ............................... (9,804,539) (15,460,057)
Cash and cash equivalents
Beginning ............................................................. 32,561,295 29,567,353
--------------------------------
Ending ................................................................ $ 22,756,756 $ 14,107,296
================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements
4
<PAGE>
Patriot National Bancorp, Inc.
Consolidated Statements of Cash Flows, continued
Quarters ended March 31, 2000 and 1999
(unaudited)
2000 1999
------------------------
Suppmental Disclosures of Cash Flow Information
Cash paid for:
Interest ...................................... $1,828,797 $ 841,028
========================
Income taxes .................................. $ 19,000 $ 1,200
========================
See accompanying Notes to Consolidated Financial Statements
5
<PAGE>
Notes to Consolidated Financial Statements
1. The Consolidated Balance Sheet at December 31, 1999 has been derived
from the audited financial statements of Patriot National Bancorp, Inc.
("Bancorp") at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
2. The accompanying unaudited consolidated financial statements and
related notes have been prepared pursuant to the rules and regulations
of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations.
The accompanying consolidated financial statements and related notes
should be read in conjunction with the audited financial statements of
Bancorp and notes thereto for the fiscal year ended December 31, 1999.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for a
fair presentation of the results of the interim periods presented. The
results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results of operations that may be
expected for all of 2000.
3. Bancorp is required to present basic income per share and diluted
income per share in its income statements. Basic income per share
amounts are computed by dividing net income by the weighted average
number of common shares outstanding. Diluted income per share assumes
exercise of all potential common stock in weighted average shares
outstanding, unless the effect is antidilutive. Bancorp is also
required to provide a reconciliation of the numerator and denominator
used in the computation of both basic and diluted income per share. The
following is information about the computation of income per share for
the quarters ended March 31, 2000 and 1999.
6
<PAGE>
<TABLE>
<CAPTION>
Quarter ended March 31, 2000
Net
Income Shares Amount
-------------------------------------------------------
<S> <C> <C> <C>
Basic income per share
Income available to common stockholders ........... $ 86,613 2,160,952 $ 0.04
Effect of Dilutive Securities
Warrants/Stock Options outstanding ................ -- 57,974 --
-------------------------------------------------------
Diluted income per share
Income available to common stockholders
plus assumed conversions .......................... $ 86,613 2,218,926 $ 0.04
=======================================================
Quarter ended March 31, 1999
Net
Income Shares Amount
-------------------------------------------------------
Basic income per share
Income available to common stockholders ........... $ 140,399 1,998,279 $ 0.07
Effect of Dilutive Securities
Warrants outstanding .............................. -- 35,262 --
-------------------------------------------------------
Diluted income per share
Income available to common stockholders
plus assumed conversions .......................... $ 140,399 2,033,541 $ 0.07
=======================================================
</TABLE>
7
<PAGE>
4. Bancorp has two reportable segments, the bank and the mortgage broker.
The bank provides its commercial customers with products such as
commercial mortgage loans, working capital loans, equipment loans and
other business financing arrangements, and provides its consumer
customers with residential mortgage loans, home equity loans and other
consumer installment loans. The commercial bank segment also attracts
deposits from both consumer and commercial customers and invests such
deposits in loans, investments and working capital. Revenues of the
bank are generated primarily from net interest income from its lending,
investment and deposit activities.
The mortgage broker solicits and processes conventional mortgage loan
applications from consumers on behalf of permanent investors, and
revenues are generated from loan brokerage fees received from permanent
investors.
Information about reportable segments, and a reconciliation of such
information to the consolidated financial statements as of March 31,
2000 is as follows (in thousands):
Mortgage Consolidated
Bank Broker Totals
---------------------------------
Net interest income ........................ $ 1,518 -- $ 1,518
Non-interest income ........................ 51 522 573
Non-interest expense ....................... 1,386 484 1,818
Provision for loan losses .................. 110 -- 110
Income before taxes ........................ 126 38 164
Assets ..................................... 171,462 -- 171,462
Bancorp did not have a mortgage brokerage segment in the first quarter
of 1999 as such operations relate to Pinnacle, a division of the Bank
acquired on June 30, 1999.
5. Bancorp opened a mortgage origination office on March 6, 2000, at
Wiccopee Plaza, Suite D, Hopewell Junction (East Fishkill), New York.
8
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
a. Plan of Operation
Not applicable since Bancorp had revenues from operations in each of the last
four fiscal years.
b. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Summary
Bancorp reported net income of $87,000 ($0.04 basic income per share and $0.04
diluted income per share) for the quarter ended March 31, 2000, down from March
31, 1999 net income of $140,000 ($0.07 basic income per share and $0.07 diluted
income per share). Net interest margin was 3.65% for the quarter ended March 31,
2000, a decrease of 64 basis points from a net interest margin of 4.29% for the
same period last year.
Total assets decreased $5.7 million from $177.2 million at December 31, 1999 to
$171.5 million at March 31, 2000. The net loan portfolio increased $4.3 million
from $107.8 million at December 31, 1999 to $112.1 million at March 31, 2000.
Loan growth was funded through the proceeds from maturities of short-term
investments. For the quarter ended March 31, 2000, Bancorp recorded provision
for loan losses of $109,500 as compared to $68,000 for the same period last
year. During the quarter ended March 31, 2000, Bancorp recorded net loan charge
offs of $5,000 as compared to net recoveries from loans charged off of $27,000
during the same period last year. Deposits decreased $6.0 million from $162.7
million at December 31, 1999 to $156.7 million at March 31, 2000. Equity
remained at $13.2 million at March 31, 2000.
FINANCIAL CONDITION
Assets
Bancorp's total assets decreased $5.7 million from $177.2 million at December
31, 1999 to $171.5 million at March 31, 2000. Cash and cash equivalents
decreased $9.8 million at March 31, 2000 caused mainly by the maturity of $11.0
million of short-term investments. Cash and due from banks increased $3.4
million and federal funds sold decreased $2.2 million.
9
<PAGE>
Loans
Bancorp's net loan portfolio increased $4.3 million from $107.8 million at
December 31, 1999 to $112.1 million at March 31, 2000. Loan growth was funded
through the maturity of short-term investments. At March 31, 2000, the net loan
to deposit ratio was 71.51% and the net loan to asset ratio was 65.39%. At
December 31, 1999, the net loan to deposit ratio was 66.22%, and the net loan to
asset ratio was 60.82%. Bancorp experienced a strong loan demand during the
first quarter of 2000 and management believes, because of the volume of loans in
process, that the loan demand will continue throughout 2000.
Allowance for Loan Losses
- -------------------------
The provision for loan losses is a charge against income and an addition to the
allowance for loan losses. Management's judgement in determining the adequacy of
the allowance is based on an evaluation of individual loans, the risk
characteristics and size of the loan portfolio, an assessment of current
economic and real estate market conditions, estimates of the current value of
underlying collateral, past loan loss experience, review of regulatory authority
examination reports and evaluations of specific loans and other relevant
factors.
Based upon this evaluation, management believes the allowance for loan losses of
$1.5 million at March 31, 2000, which represents 1.29% of gross loans
outstanding, is adequate, under prevailing economic conditions, to absorb losses
on existing loans which may become uncollectible. At December 31, 1999, the
allowance for loan losses was $1.4 million or 1.25% of gross loans outstanding.
Analysis of Allowance for Loan Losses at March 31,
- --------------------------------------------------
(Thousands of dollars) 2000 1999
----------------------------------------------------------------------------
Balance at beginning of period .............. $ 1,360 $ 785
-----------------------
Charge-offs ................................. (5) (2)
Recoveries .................................. 0 29
-----------------------
Net (charge-offs) recoveries ................ (5) 27
-----------------------
Provision charged to operations ............. 110 68
-----------------------
Balance at end of period .................... $ 1,465 $ 880
=======================
Ratio of net (charge-offs) recoveries
during the period to average loans
outstanding during the period .............. (0.00%) 0.04%
======= =======
10
<PAGE>
Non-Accrual, Past Due and Restructured Loans
- --------------------------------------------
The following table presents non-accruing and past due loans as of March 31,
2000 and December 31, 1999.
(Thousands of dollars) 2000 1999
- ----------------------------------------------------------------------------
Loans delinquent over 90
days still accruing ....................... $3,103 $ 475
Non-accruing loans .......................... 91 91
----------------------
$3,194 $ 566
======================
% of Total Loans .......................... 2.81% .52%
% of Total Assets .......................... 1.86% .32%
The majority of the increase in delinquencies is due to three loans for which
management does not anticipate any loss due to sufficient loan to value ratios.
Potential Problem Loans
- -----------------------
At March 31, 2000, Bancorp had no loans other than those described above, as to
which management has significant doubts as to the ability of the borrower to
comply with the present repayment terms.
Deposits
Total deposits decreased $6.0 million from $162.7 million at December 31, 1999
to $156.7 million at March 31, 2000. Interest bearing deposits (primarily time
certificates of deposit) decreased $9.9 million to $140.2 million, and
non-interest bearing deposits increased $3.9 million to $16.5 million at March
31, 2000. Deposits decreased because Bancorp did not aggressively price
certificates of deposit products in a rising interest rate environment.
RESULTS OF OPERATIONS
Interest and dividend income and expense
Bancorp's interest and dividend income increased $1.5 million from $1.9 million
for the quarter ended March 31, 1999 to $3.4 million for the quarter ended March
31, 2000. The increase in net interest income was primarily the result of higher
average balances on loans and securities. The average yield on loans decreased
28 basis points; the average yield on investment securities decreased 13 basis
points, and the average yield on federal funds sold increased 134 basis points
in the first quarter of 2000 as compared to the first quarter of 1999. Bancorp's
net interest
11
<PAGE>
margin for the quarter ended March 31, 2000 was 3.65% as compared to 4.29% for
the same period in the prior year. The net interest spread for the quarter ended
March 31, 2000 was 3.01% as compared to 3.55% for the quarter ended March 31,
1999.
Interest expense increased $937,000 to $1.8 million for the quarter ended March
31, 2000 as compared to $863,000 for the quarter ended March 31, 1999.
Specifically, in the first quarter of 2000, Bancorp's yield on time certificates
of deposit increased 62 basis points; savings deposit yields increased 13 basis
points; money market deposit yields decreased 160 basis points and NOW account
yields decreased 3 basis points. Bancorp has maintained loan and deposit
interest rates that are competitive within its market.
Bancorp's return on average assets and return on average equity on an annualized
basis was 0.20% and 2.62%, respectively, for the quarter ended March 31, 2000 as
compared to 0.55% and 4.58%, respectively, for the quarter ended March 31, 1999.
For the year ended December 31, 1999 Bancorp's return on average assets and
return on average equity was 0.27% and 2.67%, respectively.
Non-interest income
Non-interest income increased $476,000 from $97,000 for the quarter ended March
31, 1999 to $573,000 for the quarter ended March 31, 2000. The increase in other
non-interest income is attributed to the acquisition of a mortgage broker
operation ("Pinnacle") in June 1999, which offers mortgage brokerage services
and generated approximately $522,000 mortgage brokerage referral fee revenue in
the first quarter of 2000.
Non-interest expenses
Non-interest expenses increased $866,000 from $934,000 for the quarter ended
March 31, 1999 to $1.8 million for the quarter ended March 31, 2000. Additional
staff to support growth and the acquisition of Pinnacle, were the primary
reasons that salaries and benefits increased $582,000 to $1.0 million for the
quarter ended March 31, 2000. The opening of a branch office in Old Greenwich,
Connecticut and the operating expense associated with Pinnacle's offices were
the reasons occupancy and equipment expense increased $80,000 to $187,000 for
the quarter ended March 31, 2000. Professional services increased $31,000 to
$72,000 for the quarter ended March 31, 2000, due to additional outside services
that were required to support growth. Data processing expenses increased $87,000
to $135,000 for the quarter ended March 31, 2000. The overall growth of Bancorp
from March 31, 1999 to March 31, 2000 is the primary reason for increased data
service expenses. Bancorp increased promotional activities during the first
quarter of 2000, which caused advertising and marketing expenses to increase
$12,000 to $71,000. Director's fees for services rendered increased $1,000 to
$25,000 for the quarter ended March 31, 2000. Overall growth was the reason
expenses for forms, printing and supplies increased $27,000 to $63,000 for the
quarter ended March 31, 2000. Increases in regulatory assessments insurance are
due to the overall growth of Bancorp. Other operating expenses increased $49,000
12
<PAGE>
to $186,000 for the quarter ended March 31, 2000. Other operating expense
increases are primarily due to the amortization of goodwill related to the
Pinnacle acquisition and increased loan administration expenses.
Income Taxes
For the quarter ended March 31, 2000 Bancorp recorded a tax expense of $77,000.
In the same period last year Bancorp recognized the benefit from the utilization
available net operating loss carry forwards; therefore, there was no income tax
expense. Bancorp had a pre-tax income of $164,000 for the quarter ended March
31, 2000 which compares favorably to the pre-tax income of $142,000 for the same
period last year.
LIQUIDITY
Bancorp's liquidity position was 24.83% and 23.63% at March 31, 2000 and 1999,
respectively. The liquidity ratio is defined as the percentage of liquid assets
to total assets. The following categories of assets as described in the
accompanying consolidated balance sheets are considered liquid assets: cash and
due from banks, federal funds sold, short-term investments, available-for-sale
securities and held-to-maturity securities maturing in one year or less.
Liquidity is a measure of Bancorp's ability to generate adequate cash to meet
financial obligations. The principal cash requirements of a financial
institution are to cover downward fluctuations in deposit accounts and increases
in its loan portfolio. Management believes Bancorp's short-term assets have
sufficient liquidity to cover potential fluctuations in deposit accounts, loan
demand and to meet other anticipated cash requirements.
CAPITAL
The following table illustrates the Bancorp's regulatory capital ratios at March
31, 2000 and December 31, 1999 respectively:
2000 1999
---- ----
Leverage Capital .............................. 7.14% 7.21%
Tier 1 Risk-based Capital ..................... 9.31% 8.91%
Total Risk-based Capital ...................... 10.42% 9.90%
Capital adequacy is one of the most important factors used to determine the
safety and soundness of individual banks and the banking system. Based on the
above ratios, Bancorp believes that at March 31, 2000 it is considered to be
"well capitalized" under applicable regulations. To be considered
"well-capitalized," an institution must generally have a leverage capital ratio
of at least 5%, a Tier 1 risk-based capital ratio of at least 6% and a total
risk-based capital ratio of at least 10%.
13
<PAGE>
Bancorp proposes to sell up to $5 million of its Common Stock in a private
placement either late in the second quarter or early third quarter of 2000. The
proceeds of the offering will be used to provide the Bank with additional
capital sufficient for the Bank to continue to be "well capitalized" for
regulatory purposes and the balance of the net proceeds of the offering would be
retained by Bancorp for working capital and other general corporate purposes.
The private placement is subject to approval of the private placement at
Bancorp's 2000 Annual Meeting of Shareholders.
Impact of Inflation and Changing Prices
Bancorp's consolidated financial statements have been prepared in terms of
historical dollars, without considering changes in relative purchasing power of
money over time due to inflation. Unlike most industrial companies, virtually
all of the assets and liabilities of a financial institution are monetary in
nature. As a result, interest rates have a more significant impact on a
financial institution's performance than the effect of general levels of
inflation. Interest rates do not necessarily move in the same direction or in
the same magnitude as the prices of goods and services. Notwithstanding this,
inflation can directly affect the value of loan collateral, in particular, real
estate. Inflation, or disinflation, could significantly affect Bancorp's
earnings in future periods.
YEAR 2000 ISSUE
The Year 2000 arrived without incident and all Bancorp systems, including its
core processing systems worked properly. Throughout the year, Bancorp will
continue to monitor all of its systems to ensure date-sensitive information is
processed properly.
"Safe Harbor" Statement Under Private Securities Litigation Reform Act of 1995
Certain statements contained in Bancorp's public reports, including this report,
and in particular in this "Management's Discussion and Analysis of Financial
Condition and Results of Operation," 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 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 and the
impact of recently enacted federal legislation, (6) the ability of competitors
which are larger than Bancorp to provide products and services which it is
impracticable for Bancorp to provide, (7) the effect of Bancorp's opening of
branches, and (8) the effect of any decision by Bancorp to engage in any
business not historically permitted to it. Other such factors may be described
in Bancorp's filings with the SEC.
14
<PAGE>
The issuance of additional shares of common stock in a proposed private
placement would result in dilution of the voting power of those shareholders who
are not able to participate in the offering. In addition, the issuance of
additional shares could result in a reduction in reported earnings per share in
future periods.
Although Bancorp believes that it offers the loan and deposit products and has
the resources needed for continued success, future revenues and interest spreads
and yields cannot be reliably predicted. These trends may cause Bancorp to
adjust its operations in the future. Because of the foregoing and other factors,
recent trends should not be considered reliable indicators of future financial
results or stock prices.
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K
a. No. Description
--- -----------
27 Financial Data Schedule
b. Reports on Form 8-K
A current report on Form 8-K dated December 1, 1999 was filed
by Bancorp with the SEC during the period covered by this
report. This report responded to items 5 and 7 of the Form
8-K.
SIGNATURES
In accordance with of the requirements of Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Patriot National Bancorp, Inc.
By: /s/ Robert F. O'Connell
--------------------------------
Robert F. O'Connell,
Executive Vice President
Chief Financial Officer
May 12, 2000
15
<PAGE>
EXHIBIT INDEX
No. Description
--- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of Patriot National Bancorp, Inc. as of March
31, 2000 and for the quarter then ended and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0001098146
<NAME> Patriot National Bancorp, Inc.
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<S> <C>
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<PERIOD-START> JAN-01-2000
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0
0
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</TABLE>
