Patriot National Bancorp has raised more than $50 million in a private placement and confirmed the exit of its CEO, David Lowery.
Lowery will depart the company April 15 “to pursue other opportunities,” Patriot said in a Securities and Exchange Commission filing. He will also step down from his board director position. Lowery, who was appointed president and CEO in April 2023, announced his resignation Thursday.
That leaves Steven Sugarman as the Stamford, Connecticut-based lender’s highest-ranking executive. He was named president and a board member in January.
Sugarman entered into an employment agreement with Patriot that runs through April 1, 2029, according to the SEC filing. It did not indicate a specific title change but indicated Sugarman would “[have] such other roles and responsibilities at the Company and the Bank as shall be mutually agreeable by the parties.”
Sugarman will receive an annual base salary of no less than $200,000, with agreements to follow regarding initial and quarterly equity awards. Sugarman is eligible to receive an annual bonus based on his performance but cannot get more than 50% of the annual bonus for any year in the form of equity awards. The salary outpaces the $120,000 he was promised when he joined Patriot National.
Sugarman was brought aboard to spearhead the capital raise and bring the firm and its subsidiary Patriot Bank to “well-capitalized” status.
“The completion of the capital raise marks a positive inflection point for Patriot and will enable the bank to pursue the compelling market opportunity that exists,” Michael Carrazza, Patriot’s board chair, said in a statement.
Patriot National launched an evaluation process in December to gauge the market for potential strategic partnership or merger and acquisition interest – after a proposed tie-up with neobank American Challenger Development Corp. failed in July 2022 over Patriot National’s inability to satisfy certain closing conditions.
The company said in an SEC filing in December that it expected a capital infusion or a partnership to help the bank return to asset and loan growth.
“The new capital will enable Patriot to meet the bespoke needs of its clients, safely and soundly. The future is bright for Patriot,” Sugarman said Thursday, adding that the company intends to add more directors, officers, and bankers to the team.
Patriot National did not respond to comments by press time.
The Office of the Comptroller of the Currency in January deemed the bank in “troubled condition” and not an “eligible bank” for certain regulatory purposes. The OCC found “unsafe or unsound practices” and violations of regulations, including those related to strategic and capital planning, the Bank Secrecy Act, and anti-money laundering risk management. The company agreed to appoint a compliance committee of at least three members.
Last month, Patriot National projected a loss of approximately $9.5 million for the fourth quarter of 2024 – contrasted with Q4 2023 net income of $0.9 million. The negative results are primarily due to an expected provision for credit losses of roughly $7.7 million related to two large commercial real estate loans, the company noted.
The company also reported a loss of roughly $27 million for the quarter ending Sept. 30. The company’s total assets declined to $974.1 million from $1.09 billion at the end of 2023.
Lowery said he is “proud to have helped lead the successful recapitalization of Patriot Bank, and I thank the Patriot Bank employees for their hard work and support that made this possible.”
