Greenwich Time logs in with a hard-hitting piece of Patriot’s sale to a new investor. Here are the white-washed bits:
The new holding company also indicated it intends to bring in experts to help run the bank, although it did not say whether Carrazza would replace the current management. [Would you keep the jerks who blew hundreds of millions of dollars loaning good money to bad people and bad property? Neither will Carrazza – Ed.]
PNBK Holdings and the bank originally signed a letter of intent for the control change in July, but Patriot National’s board told Carrazza in October it was considering a rival bid worth more money [fat chance – Ed.]
which prompted Carrazza to sue in New York and Connecticut.The lawsuit in New York has been or very soon shall be withdrawn and the one in Connecticut is being settled with an agreement between the parties.
In previous reports, bank executives said Patriot National sought an infusion of capital because of concerns over a portfolio filled with Greenwich construction loans that had to be carried on the books longer than anticipated because contractors were not able to sell their projects after completion. Because of the loans, the bank grew concerned it was coming too close to its regulatory capital minimums. But Patriot National remains adequately capitalized, officials said.
I don’t know – I assume that Greenwich Time’s lawyers are worried about law suits, but since I’m pretty much judgement-proof, here’s my read on the situation: Patriot’s been operating under a consent agreement with the FDIC for over a year, so “concerned that it was coming to close to its regulatory capital requirements” really means, “told by regulators that they had violated their capital requirements and needed new money or they’d be shut down”. What’s so hard about reporting a fact?
“Greenwich construction loans that had to be carried on the books longer than anticipated” really means that the bank made loans to, say, Dom DeVito (currently doing 52 months in Otisville), paying him $6 million in advance for a dream house at 516 R0und Hill Road.The loan is there, the house is not. I like Dom, but I wouldn’t loan $6 million to a 2X felon on his promise to build something nice. Patriot did. Baldwin Farms South, not a Dom project but just as crazy, was also fully-funded by Patriot and just as worthless. Etc. If Patriot, a local bank, ever heard of the “know your customer rule”, it paid no attention. Nothing in its Greenwich portfolio will ever approach what the money it sunk into it. Total loss. And that’s the real business report this morning.