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June 16, 2014

Financial woes ensnarl top CT banker

Nasdaq.com Peyton Patterson (center) celebrated Bankwell's recent IPO by ringing the Nasdaq closing bell on June 5. But the cheerful image belies the CEO's personal financial issues.
By Matt Pilon

Bankwell Financial Group President and CEO Peyton Patterson has received wide acclaim and millions of dollars in pay over the years for orchestrating several major bank mergers that changed the face of Connecticut's financial industry.

But Patterson, who landed at Bankwell in 2012 and just led the New Canaan lender through a $48.6 million initial public offering, has recently struggled with her own personal finances, court records and an interview with a jilted North Haven contractor reveal.

Since June 2013, Patterson has been sued by American Express and two private country clubs over hundreds of thousands of dollars in unpaid debts. And a contractor who says he installed a telephone system in Patterson's New Canaan home last year says he was never paid more than $1,000 owed to him.

Meantime, the town of Madison also took Patterson to court in late July 2013, seeking more than $20,000 in back taxes. That case has since been withdrawn and most of the money repaid, a town official said.

Since September, judges presiding over lawsuits by American Express, Race Brook Country Club in Orange and Pine Orchard Yacht and Country Club in Branford have ordered Patterson to repay nearly $393,000 in debts, court records show.

It remains unclear how Patterson — who has made millions of dollars as a bank executive — ended up with these financial issues. She did not answer repeated questions from the Hartford Business Journal.

“I am in the process of addressing these personal matters,” Patterson said in a written statement to HBJ. “I regret that they have reached this point and I intend to resolve them.”

Patterson's legal and financial woes come only a few years after she helped put together one of the state's largest bank mergers in recent memory, which landed her a pay package valued as high $23.4 million, according to one estimate.

More recently, Patterson earned nearly $1.1 million at Bankwell in 2013, including nearly $732,000 in salary and cash incentives, according to a filing with the U.S. Securities and Exchange Commission.

Credit card problems

The bulk of Patterson's financial issues, court records show, are with American Express, which sued Patterson on July 31 — the same day as the town of Madison — claiming that she owed $353,509 in credit card debt and hadn't made a payment for approximately six months.

The line of credit was opened in late 2003, a little more than a year before Patterson filed for divorce against her husband Thomas Neustaetter, a venture capital executive in Chicago.

Mark Sank, a Stamford attorney representing Amex, said he was not authorized to comment on the case.

Meantime, on Dec. 18, a judge ruled that Patterson owed $28,176 to Race Brook Country Club, a private 27-hole golf course in Orange that claimed in its lawsuit that she had not paid membership costs that accumulated between Feb. 2011 and Dec. 2012.

Race Brook's general manager, Jack Kealey, did not return a message seeking comment.

And on March 3 of this year, Pine Orchard Yacht and Country Club in Branford won a $10,658 judgment against Patterson, also for unpaid membership costs.

Court filings show that in the Amex and country club lawsuits, Patterson did not formally respond to summons, which is an order to appear in court by a certain date. As a result, plaintiffs' attorneys all won default motions for failure to appear, which can lead to quicker judgments.

And in each of the three judgments, a judge ordered that Patterson pay $35 per week to make good on her debts.

In Madison, Patterson eventually reached a repayment agreement with the town to make good on $20,000 in back taxes. Madison's tax collector said on May 29 that the past due balance on the property was $382.

Patterson and her ex-husband bought the 3,100-square-foot house in 2002 for $1.2 million. Its 2013 assessment was $651,500, according to the town assessor's website. Patterson was granted the home and its mortgages in the divorce case with Neustaetter, court documents show.

Contractor claims Patterson owes him

In addition to the lawsuits, Gregg Haughton of Granite Communications in North Haven told the Hartford Business Journal that Patterson didn't pay him $1,008 for a phone system his company installed early last year in the bank chief's New Canaan home.

Patterson purchased the 8,000-square-foot house in 2012 for $4.2 million, according to town records.

Haughton said the debt has since grown by $102 because of late charges. He said he has attempted unsuccessfully to get a response from Patterson.

“This kind of write off hurts,” Haughton said. “We employ local tradesmen and when we have to write off bad debt, it hurts everyone.”

Haughton provided invoices to the Hartford Business Journal describing the work completed and the price.

Haughton said his company did not sue because it would have cost additional time and money.

“It costs money to sue, and you usually don't get paid anyway,” he said.

Bankwell Chairman Blake S. Drexler said in a June 6 phone interview that Patterson has the board's support. He said Patterson disclosed to the board the financial issues the week of May 26.

Patterson became aware on May 28 that the Hartford Business Journal had been contacting contractors who had worked on her New Canaan home.

“I think we're very comfortable with the circumstances and we're confident she's going to resolve them,” said Drexler, who is a partner with Five Mile Ventures in Norwalk.

Drexler wouldn't discuss specifics, which he said Patterson shared with board members in an executive session.

“It's a set of circumstances that could happen to any of us, to be quite candid,” he said. “She's an outstanding president and CEO, she's done great things for the bank and our customers.”

A legacy of CT bank deals

Patterson is one of Connecticut's biggest names in banking and has garnered national acclaim having been named Community Banker of the Year by American Banker in 2010.

That was the same year she led New Haven's NewAlliance Bancshares through its $1.5 billion merger with Buffalo, N.Y.'s First Niagara Financial Group. Patterson, who left the bank shortly after the deal was complete in 2011, walked away with a compensation package of cash, options and stock worth as much as $23.4 million, the New York Times reported at the time, citing an executive compensation expert. Other media valued her exit pay package at $16 million.

In 2004, Patterson oversaw a $1 billion initial public offering and double merger that combined New Haven Savings Bank, the Savings Bank of Manchester and Tolland Bank under the NewAlliance umbrella, which at the time had more than $6 billion in assets and nearly $4 billion in deposits.

After less than two years out of the industry spotlight, Patterson was hired by BNC Financial Group (now Bankwell) in 2012, the holding company for the Bank of New Canaan, the Bank of Fairfield and Stamford First Bank.

In her time as CEO, Bankwell has acquired the Bank of Wilton and Quinnipiac Bank & Trust Co.

In May, the bank raised $48.6 million through an IPO, which Bankwell said it will use for acquisitions and other growth opportunities.

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