Patapsco Bancorp, Inc.

Result of Operations

Patapsco Bancorp, Inc. (OTC, Electronic Bulletin Board: PATD), the parent company of The Patapsco Bank, announces unaudited net income applicable to common shareholders of $381,000 or $0.19 diluted income per share for its year ended June 30, 2013 as compared to an unaudited net loss of $2,014,000 or $1.02 diluted loss per share for the prior year.

The Company announced an unaudited net loss applicable to common shareholders of $512,000 or $0.26 diluted loss per share for the fourth quarter of its fiscal year ended June 30, 2013 compared to an unaudited net income of $932,000 or $0.47 diluted income per share for the comparable period of the prior year.

The Company's annual and quarterly results were impacted by the provision for loan losses of $1,000 and $456,000 in the year to date and quarterly periods. The 2013 annual amount is $3.1 million lower than the provision incurred for fiscal year 2012 while the quarterly amount is $1.3 million more than the amount recorded for fourth quarter. Non-interest expenses increased due to the provision for losses on and cost of real estate acquired through foreclosure increasing to $671,000 for the year ended June 30, 2013 as compared to $212,000 for the prior year.

Non-performing assets improved as they represented 3.00% of total assets at June 30, 2013 as compared to 4.04% at June 30, 2012. The ratio of the allowance for loan losses was 1.91% of total loans at June 30, 2013 compared to 2.11% at June 30, 2012. The coverage ratio improved as the allowance for loan losses was 50.03% of non-performing loans at June 30, 2013 versus 42.23% at June 30, 2012.

As of June 30, 2013, Patapsco Bancorp, Inc. reported assets of $230.8 million, deposits of $201.5 million and total stockholders' equity of $13.4 million compared to $254.4 million, $225.4 million and $12.6 million at June 30, 2012, the Company's previous fiscal year end. The Patapsco Bank remains well capitalized at all levels.

Attached hereto is a summary of the unaudited financial highlights for the periods mentioned.

Executive Management

The Company also announced that Michael J. Dee, the President and Chief Executive Officer of the Company and Patapsco Bank, has resigned from such positions. The Board of Directors would like to thank Mr. Dee for his fine service to the Company and the Bank during a very difficult period. Mr. Dee will remain employed with Patapsco Bank for a transitional period.

The Board of Directors has appointed Phil Phillips as President and Chief Executive Officer of Patapsco Bancorp, Inc. and The Patapsco Bank, subject to final regulatory approval. According to Thomas P. O'Neill, the Company's Chairman of the Board "we are thrilled to welcome Phil Phillips as our President and Chief Executive Officer. We believe his extensive experience in banking including in particular his experience in lending will help put us back on the road to long term success." Mr. Phillips previously served as The Patapsco Bank's Executive Vice President in the capacity of Chief Credit Officer and Senior Lending Officer.

The Company intends to post future earnings announcements on The Patapsco Bank's website, www.patapscobank.com rather than posting on various media outlets.

The Patapsco Bank serves its community from its Baltimore County offices located in Dundalk, Glen Arm and Carney and its Baltimore City office located in Hampden. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. Accordingly, the financial information in this announcement is subject to change.

When used in this Press Release, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in Patapsco Bancorp's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in Patapsco Bancorp's market area, and competition that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Patapsco Bancorp wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Patapsco Bancorp wishes to advise readers that the factors listed above could affect Patapsco Bancorp's financial performance and could cause Patapsco Bancorp's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. Patapsco Bancorp does not undertake and specifically disclaims any obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

       
FINANCIAL HIGHLIGHTS (unaudited)
Patapsco Bancorp, Inc. and Subsidiaries
                 
 
For the Twelve Months Ended For the Three Months Ended
June 30, June 30,
(Dollars in thousands, except per share data)   2013   2012   2013   2012
 
OPERATING RESULTS:
Interest Income $ 10,118 $ 11,321 $ 2,269 $ 2,664
Interest Expense   2,115     3,091     458     679  
Net Interest Income 8,003 8,230 1,811 1,985
Provision (Credit) For Loan Losses   1     3,101     456     (863 )

Net Interest Income After Provision (Credit) for Loan Losses

8,002 5,129 1,355 2,848
Other Noninterest Income 755 786 250 172
Noninterest Expense 7,989 7,332 2,021 1,782
Income Tax Expense   0     210     0     210  
Net Income (Loss) 768 (1,627 ) (416 ) 1,028
Preferred Stock Dividends   387     387     96     96  
Net Income (Loss) Available for Common Shareholders $ 381     ($2,014 )   ($512 ) $ 932  
 
PER SHARE DATA:
Net Income (Loss) per Common Share, Basic $ 0.19 ($1.02 ) ($0.26 ) $ 0.47
Net Income (Loss) per Common Share, Diluted $ 0.19 ($1.02 ) ($0.26 ) $ 0.47
 
Book Value per Common Share $ 3.61 $ 3.24
Tangible Book Value per Common Share (1) $ 3.59 $ 3.20
Period-End Common Stock Price $ 3.40 $ 0.62
Common Stock Price as a Percentage of Tangible Book Value 94.71 % 19.38 %
 
PERFORMANCE RATIOS: (2)
Return on Average Assets 0.32 % -0.63 % -0.71 % 1.62 %
Return on Average Equity 5.58 % -11.71 % -11.59 % 34.02 %
Net Interest Margin 3.46 % 3.34 % 3.27 % 3.29 %
Net Interest Spread 3.39 % 3.26 % 3.14 % 3.16 %
 
At
June 30, June 30,
2013   2012
BALANCES:
Net Loans $ 155,015 $ 173,595
Total Assets $ 230,761 $ 254,395
Deposits $ 201,549 $ 225,413
Borrowings $ 14,000 $ 14,000
Stockholders' Equity $ 13,424 $ 12,629
Non-performing Loans $ 6,020 $ 8,861
Foreclosed Assets $ 903 $ 1,418
Non-performing Assets $ 6,923 $ 10,279
 
CAPITAL & CREDIT QUALITY RATIOS:
Bank Leverage ratio 8.23 % 7.13 %
Bank Tier 1 Risked Based ratio 14.15 % 11.99 %
Bank Total Risked Based ratio 15.41 % 13.26 %
Allowance For Loan Losses to Total Loans 1.91 % 2.11 %
Nonperforming Assets to Total Assets 3.00 % 4.04 %
Allowance For Loan Losses to Nonperforming Loans 50.03 % 42.23 %
 

(1)

 

Tangible book value per share deducts intangible assets from common equity.

(2)

Amounts for the three and twelve month periods ended June 30, 2013 and 2012 are annualized.

Patapsco Bancorp, Inc.
John M. Wright, Senior Vice President and CFO
410-285-9327