Stamford-based Patriot Bank calls off proposed merger

STAMFORD — The parent company of Patriot Bank announced this week that it had terminated its agreement to merge with another firm, a deal that had been intended to create the “largest digital bank in the U.S.”

Stamford-based Patriot National Bancorp announced plans last November to acquire, through a “reverse subsidiary merger,” American Challenger Development Corp., which was formed in January 2020 to establish a new digital national bank headquartered in Stamford. The transaction had been advancing through the regulatory process, with Patriot announcing on July 6 conditional approval from the federal Office of the Comptroller of the Currency.

“The parties have mutually determined that not all closing conditions of the merger agreement can be satisfied under the current structure and agreement,” Patriot said in a news release. “Although the parties remain in active discussions regarding a modified transaction, it is uncertain whether a new agreement can be reached.”

Termination of the merger agreement was mutually agreed by the companies and unanimously approved by their boards of directors, according to the release.

“Pursuant to the parties’ mutual termination and release agreement, the parties have agreed to release each other from any claims relating to or arising out of the merger agreement or the transactions contemplated thereby,” the release added.

In its own news release, American Challenger said it was exploring a sale of the company and that it had hired Citi as its strategic adviser in the process.

Following the announcement, Patriot shares closed Thursday at about $11.37, sliding nearly 9 percent from Wednesday. They have hit a 52-week high of $18 and a 52-week low of $8.52.

In the past year and a half, Patriot comprised one of several Connecticut banks to announce plans for a merger or acquisition. In April, M&T Bank completed its acquisition of Bridgeport-based People’s United Bank, while Stamford-based Webster Bank finalized in February its combination with Sterling National Bank.

There are Patriot branches in Darien, Fairfield, Greenwich, Milford, Norwalk, Orange, Stamford, Westport, as well as Scarsdale, N.Y. The bank also operates “express banking locations” at Housatonic Community College in Bridgeport, in downtown New Haven and at Westfield Trumbull mall.

For the first quarter of 2022, Patriot finished with total assets of about $975 million, net loans of about $764 million and total deposits of around $780 million.