Thanks to reader Polly Pavel, here’s this tip from the news wire six minutes ago: Patriot Bank selling controlling interest to new investor, Michael Carrazza. More soon.
Up to $50 Million Investment to Provide Regulatory and Growth Capital to the Second Largest Commercial Bank Headquartered in Connecticut
STAMFORD, Conn.–(BUSINESS WIRE)– Patriot National Bancorp, Inc. (NASDAQ Global Market “PNBK”) announced today that it has signed a definitive agreement with operating financier, Michael Carrazza, whereby Mr. Carrazza, through PNBK Holdings LLC, (“Holdings”) (an entity controlled by Carrazza), will acquire a substantial controlling interest in Patriot National Bancorp, Inc., the parent company of Patriot National Bank (“Patriot”). With assets of $937 million as of September 30, 2009, Patriot operates from 19 branch locations in affluent towns in southern Connecticut and New York.
Holdings will invest up to $50 million to purchase approximately 33.3 million newly issued shares of common stock of PNBK, representing nearly 88% of the fully diluted common stock of PNBK.
Mr. Carrazza stated: “Our investment objective is to provide capital necessary to maintain regulatory requirements and to position Patriot for long-term sustainable growth, asset diversification and superior performance for shareholders. Patriot’s geographic footprint includes a collection of some of the wealthiest communities in the country, representing a stable, affluent client base along the Fairfield County coastline, Westchester County and New York City. Patriot provides an attractive platform that will benefit from our capital, operational support and growth objectives.”
“The combination of additional capital, operating expertise and experienced additions to the team will assist Patriot in achieving its future goals,” said Angelo De Caro, Chairman of PNBK. “Most importantly, greatly enhanced regulatory capital contemplated in the transaction will strengthen our position and allow us to stay focused on serving our customers.” [hard to stay focused on serving customers when the FDIC has shut you down – De Caro makes a good point]
Contingent terms of the agreement also provide for a Special Loan Recovery Dividend (“SLRD”) designed by Carrazza to provide existing PNBK shareholders with the potential for additional consideration based upon actual recovery on assets charged off on its books as of June 30, 2009 and recovered by June 30, 2011. The SLRD would be paid in stock equal to 100% for the first $1 million of recoveries and 50% thereafter, valued at the greater of $1.50 per share or 75% of the share’s book value at time of distribution. There is no assurance Patriot will recover on any of these loans, and this dividend feature is conditional upon, among other things, structural satisfaction and approvals by all governmental agencies.
Holdings is seeking approval to become a bank holding company and aggregating investment from its minority investors which are expected to include private investors, family offices and institutions. Mr. Carrazza reported that “we have assembled a team of seasoned banking specialists, operational strategists, executive management and former FDIC regulatory advisors [ none of whom include the morons who destroyed this bank] to augment [replace] the Bank’s existing management and to assist in the restoration of shareholder value.” Upon closing, Mr. Carrazza is expected to become Chairman of PNBK. [Goodbye, Angelo, goodbye, Marty Nobel, if you’re even still there].
UPDATE: This is the resolution of that lawsuit Carrazza brought last fall.
Another update – last spring, Patriot was showing something like $120 million is assets in Greenwich alone, based on loans to builders of spec houses, plus more millions in construction loans throughout Fairfield County. If $50 million buys 88% of the entire bank, I guess Patriot isn’t valuing that portfolio so high any more.