Patriot National in Conn. raises $50M, CEO to leave
Patriot National Bancorp in Stamford, Conn., announced an agreement to raise $50 million, along with the departure of CEO David Lowery.
The $974.1 million-asset company said in a press release that Steven Sugarman is leading a group that will inject capital in exchange for common stock and non-voting preferred stock. FlyHouse Management is also part of the investor group.
The Nasdaq waived a shareholder approval requirement, allowing the company to quickly raise the capital.
Net proceeds will be used to increase equity capital and strengthen the balance sheet of Patriot National and its bank.
Patriot National also announced the execution of a long-term employment agreement with Sugarman. Lowery will stay with the company through April 15 “to ensure a seamless transition.”
“I am humbled by the strong investor demand to invest in Patriot Bank and our management team,” Sugarman said in the release. “I am excited to have the opportunity to work with Patriot’s existing employees and to add additional directors, officers, and bankers to our team.”
Patriot National disclosed in January that its bank was operating under a written agreement with the Office of the Comptroller of the Currency. The agreement labeled the bank as being in a “troubled condition” while ordering it to address Bank Secrecy Act and anti-money laundering compliance, among other things.
Lowery, in a March 4 letter to shareholders, disclosed plans to raise $60 million by selling common and preferred stock. The company recently disclosed that it was looking to create a new class of preferred stock under an effort labeled “Project Five Star.”
The company has also warned that it expects to report a $9.5 million net loss in the fourth quarter, largely due to a $7.7 million loan-loss provision tied to two big commercial real estate loans.