Patriot National Bancorp Inc. has hired Sandler O”™Neill to help it develop unspecified strategic and capital plans, with the Stamford-based bank acknowledging its capital ratios remain in excess of the regulatory definition for well-capitalized institutions.
Based in New York City, Sandler O”™Neill has advised in more than a dozen bank mergers and acquisitions this year, including the April sale agreement on some 60 National City Bank branches in the mid-Atlantic region, a deal that reportedly had elicited the interest of Bridgeport-based People”™s United Financial Inc.
Sandler O”™Neill also helps banks raise cash through the sale of non-controlling shares of equity.
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In May, Stamford-based Patriot National terminated a “poison pill” provision it adopted in 2004. Such stock-rights plans are commonly put in place to help companies fend off investors attempting a takeover by acquiring a controlling block of stock when shares are down.
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Shares of Patriot National have been marching downward since the banking crisis last fall. But while the SNL Bank Index has rebounded since April, Patriot National shares have sunk lower.
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Patriot National was founded in 1994, and ranks among the dozen largest banks doing business in Fairfield County. As of March, the company reported having about 150 employees.
As of March, the company”™s largest stockholder was Angelo De Caro, current chairman and former CEO and before that a longtime executive with Goldman Sachs & Co.
Since De Caro stepped down as CEO in 2000, Patriot National has been run by a team of former Summit Bank executives, including its current CEO Charles Howell, who previously was president of Summit; and chief financial officer Robert O”™Connell, who similarly held a senior financial position at Summit.
Director Brian Fitzgerald, who is listed as a financial expert on the company”™s loan committee, also is a Summit Bank veteran.
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Patriot National Bancorp Inc. lost $4.6 million in the second quarter, which it attributed to increased reserves to cover actual and potential losses on loans.
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The bank has about 20 branches, including one in New York City and two in Westchester County. In 2007, senior bank officials indicated the bank was considering an expansion to Long Island.
Total loans outstanding at Patriot National decreased nearly 10 percent in the first half to $730 million, which it said reflected efforts to limit risk in its portfolio. Patriot National indicated the majority of some $6 million in charge offs and write downs in the second quarter were based on the reappraisal of borrowers”™ real estate collateral, and not losses on the sales of the properties.
As of June 30, the bank classified some $120 million in loans to more than 40 borrowers as being in non-accrual status, and had reserved $4.4 million to account for any payment problems, with most of the remaining loans secured by collateral on residential or commercial properties.
Borrowers could have difficulties repaying another $54 million across 30-plus loans, the bank disclosed.
At the same time, deposits at Patriot National increased 9 percent in the first half of the year to nearly $860 million, which the bank attributed in part to customers safeguarding their money in bank accounts covered by the Federal Deposit Insurance Corp.
