Patriot Bank of Connecticut Announces Merger to Become “Largest Digital Bank” in United States

STAMFORD – The parent company of Stamford-based Patriot Bank on Monday announced a merger to create the ‘largest digital bank in the United States’, but officials say they are keeping branches open and not planning layoffs .

Through a “reverse branch merger,” Patriot National Bancorp will acquire American Challenger Development Corp., which was formed in January 2020 to establish a new digital national bank headquartered in Stamford.

Patriot is the latest of several Connecticut banks to announce a merger deal this year. People’s United Bank, based in Bridgeport, is acquired by M&T Bank, and Webster Bank, based in Waterbury, is combining with Sterling National Bank.


“The markets are moving towards a more digital banking environment. For Patriot, this is a transformative opportunity to move to the forefront of the future of the bank, ”said in an interview Patriot Chairman Michael Carrazza, who will remain on the board of directors of the company as vice president after the merger. “Patriot will remain intact, which creates even more opportunities for its employees and customers. “

Following the announcement, Patriot shares closed at around $ 15 on Monday, a 50% jump from Friday. Once the merger is complete, Patriot will continue to operate under the symbol “PNBK”.

The merger, which has an “implied total transaction value” of approximately $ 119 million, is expected to close in the first quarter of 2022. To support the transaction, Patriot announced deals with investors to provide $ 540 million in as part of an $ 890 million recapitalization program.

Patriot has 130 employees and operates branches in Darien, Fairfield, Greenwich, Milford, Norwalk, Orange, Stamford, Westport, as well as Scarsdale, NY. at Westfield Trumbull Shopping Center. In addition, it has Small Business Administration loan offices in Stamford and various locations in Florida, Georgia and Ohio, as well as an operations center in Rhode Island.

“This merger is about construction, not consolidation,” Carrazza said. “We intend to hire more employees – especially in the state of Connecticut – and not let anyone go.”

Raymond Quinlan, CEO and board member of American Challenger, will serve as CEO of the merged company.

“We are building a digital bank that will leverage the best of technology and operational excellence to serve our customers and our communities,” Quinlan said in a statement. “This will be evident in the design and pricing of our banking products, in our delivery of high quality personalized services and in our clear commitment to corporate social responsibility. We believe in “banking for good” and through our actions we will demonstrate that we are a goal-oriented financial institution. “

American Challenger will become a wholly owned subsidiary of Patriot, and the bank will operate in two divisions. The Patriot Bank division will continue to operate the existing Patriot Bank business alongside a US Challenger division.

Patriot will adopt American Challenger’s proprietary technology platform for its operations, allowing the bank “to operate with a largely fixed technology cost structure, unlike the typical and more variable cost structure of most banks,” said company officials said in their announcement.

“We have a world class team,” said Carrazza. “Second, we have significant capital. Third, we have a team that can execute and a track record to back it up. And we have a compliant, well-functioning platform from which to launch. These four ingredients will make it America’s largest digital bank. There is no other competitor who has all of these ingredients.

Customers can expect to see post-merger benefits, including “competitive rates” on its products and offerings such as video customer service, account opening and funding initiation in less than one hour. minute, as well as mortgages that close in as little as 20 days, according to Patriot officials.

“The branch network will remain in place,” Carrazza said. “Customers are free to continue using the traditional banking network. This increases it by allowing these abilities to be digitally distant. “

As of September 30, Patriot was operating with total assets of approximately $ 952 million, net loans of approximately $ 705 million, and total deposits of approximately $ 735 million. For the first nine months of 2021, it recorded net interest income of nearly $ 19 million, up 16% from the same period in 2020.

Also on Monday, American Challenger announced plans to launch a strategic partnership with a subsidiary of Sunlight Financial Holding, a funding platform for solar and energy efficient home improvement projects in the United States, as part of a program of loan-to-buy of up to $ 1.75 billion. The initiative will focus on loans for solar power systems, as well as battery storage.

“American Challenger was founded to share digital profitability with the consumer through better pricing and bring a new banking experience to the segment of the population that research shows is looking for a partner to help them achieve even more, a simpler and smarter way. American Challenger President and Chairman Felix Scherzer said in a statement. “This segment consists of sophisticated consumers of banking products and services, spanning generations ranging from Generation Y to ‘Gen X’; from those who have started to build their personal wealth, to enterprising people in their prime.

[email protected]; twitter: @paulschott

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