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November 16, 2021

Stamford’s Patriot Bank to become ‘digital-first’ with new acquisition

Photo | City of Stamford GIS Patriot National Bancorp headquarters in Stamford.
By Zachary Vasile

The parent company of Stamford-based Patriot Bank has entered a merger agreement designed to launch what company officials are calling the “largest digital bank” in the U.S.

Patriot National Bancorp announced Monday that it has agreed to acquire American Challenger Development Corp., a digital banking firm, through a “reverse subsidy merger.” Once the deal closes, likely in the first quarter of 2022, Patriot plans to use American Challenger’s proprietary technology to strengthen and build up its online banking operations, with the aim of becoming a “digital-first national bank.”

The merger is valued at approximately $119 million, Patriot officials said. American Challenger common shareholders will receive 4,092 shares of Patriot common stock for each American Challenger common share they own.

The combined company is expected to operate as two divisions — the Patriot Bank division, which will continue to operate Patriot Bank's existing business, and the American Challenger division, which will execute the firm’s digital-facing business strategy.

Patriot Bank expects to change its jurisdiction of incorporation from Connecticut to Delaware following the merger. It will continue to trade under the ticker “PNBK.”

In a statement, executives implied the coming linkup and shift in focus to digital will not come with layoffs or branch closures.

“We’re excited to have engineered this industry-disrupting merger,” said Patriot Chairman Michael Carrazza. “The combination transforms Patriot to what will become the largest digital bank in the U.S. Customers will benefit from an expanded array of services and a tech-savvy banking experience, while shareholders should benefit from the compelling value that will be created. Patriot’s team will remain intact and will be complemented by American Challenger’s team and digital platform capabilities.”

According to its website, Patriot Bank has locations in Stamford, Darien, Fairfield, Greenwich, Bridgeport, Milford, New Haven, Norwalk, Orange, Trumbull and Westport, as well as in Scarsdale, New York.

Patriot also announced Monday that it has entered into agreements with investors to raise approximately $540 million through newly-issued Patriot voting and non-voting stock, warrants for the purchase of non-voting stock and preferred stock. Those agreements are part of a broader, $890 million recapitalization plan, company officials said.

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