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.


“We are delighted to have engineered this industry-disrupting merger. The combination transforms Patriot into what will become the largest digital bank in the United States, ”Patriot Chairman Michael Carrazza, who will remain a director after the merger, said in a statement. “Customers will benefit from an expanded range of services and a state-of-the-art banking experience, while shareholders should benefit from the compelling value that will be created. The Patriot team will remain intact and will be complemented by the capabilities of the American Challenger team and digital platform. “

After the announcement, Patriot shares were trading at around $ 13.60 around noon Monday, a 35% jump from Friday. Once the merger is complete, Patriot will continue to operate under the symbol “PNBK”.

In response to a request from Hearst Connecticut Media, a Patriot spokesperson said in an email that “the merger will not affect the bank’s workforce and that” the merger plan does not call for any changes to the bank’s workforce. Patriot Bank branch system. All branches will remain open. There are no plans to add additional brick and mortar branches at this time.

Patriot has branches in Darien, Fairfield, Greenwich, Milford, Norwalk, Orange, Stamford, Westport, as well as Scarsdale, NY. . 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.

As of Monday, Patriot had 130 employees.

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. “

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.

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.

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 company officials.

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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