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Patriot National Bancorp Inc. (NASDAQ:PNBK) announced on Thursday a significant amendment to its financial obligations and disclosed a preliminary net loss for the last quarter of 2024. The Connecticut-based commercial bank, currently valued at $4.61 million in market capitalization, reported an expected net loss of approximately $9.5 million, or $(2.40) per share, for the quarter ended December 31, 2024, a stark contrast to the net income of $0.9 million, or $0.23 per share, from the same period in the previous year. According to InvestingPro data, the company’s stock has declined by 67.67% over the past year, reflecting ongoing financial challenges.
The bank’s book value per share is anticipated to drop to $1.07, down from $11.16 a year earlier. This decline, according to the company, is primarily due to a provision for credit losses of around $7.7 million, mainly related to two large commercial real estate loans. InvestingPro analysis shows the stock trading at a Price/Book ratio of 0.28, with an overall Financial Health Score rated as "Weak" at 1.74 out of 5.
In response to the financial strain, Patriot National Bancorp entered into a material definitive agreement on February 14, 2025, to extend the grace period for the interest payment due on January 15, 2025, for its 8.5% Senior Notes Due 2026 to April 1, 2025. The exact terms of this amendment will be detailed in the company’s upcoming Annual Report on Form 10-K.
Additionally, the bank is actively exploring strategic alternatives, which include a potential capital raise, sale, or merger. Non-binding term sheets have been received from investors to purchase common and preferred stock worth approximately $60 million. The proposed transaction’s pricing would be the lower of $0.75 per share or the NASDAQ closing price preceding the signing of definitive agreements. However, the completion and terms of this potential transaction remain uncertain.
If the proposed capital infusion proceeds, the bank plans to allocate the net proceeds towards recapitalizing its subsidiary Patriot Bank, N.A., ensuring the bank regains a well-capitalized status, and maintaining sufficient capital for stability and growth. Funds would also be used to make scheduled interest payments on the Senior Notes before the grace period expires and to hold cash reserves for future debt payments.
The company’s financial results and strategic plans, including the proposed transaction, contain forward-looking statements subject to inherent risks and uncertainties. The bank emphasizes that the financial data is preliminary and unaudited, pending review by independent accountants. These results are not final and could change upon completion of the standard reporting process for the year ended December 31, 2024.
This news article is based on Patriot National Bancorp’s recent SEC filing and does not constitute an offer to sell or a solicitation of an offer to buy any securities. For deeper insights into PNBK’s financial health and additional analysis, including 11 more exclusive ProTips and comprehensive valuation metrics, investors can access InvestingPro’s detailed company analysis tools.
In other recent news, Patriot National Bancorp Inc. has entered into a regulatory agreement with the Office of the Comptroller of the Currency (OCC) to enhance its compliance and risk management practices. The agreement requires the bank to appoint a Compliance Committee by January 31, 2025, and meet specified minimum capital ratios by February 28, 2025. Additionally, Patriot National Bancorp has appointed Steven Sugarman as its new President amid ongoing strategic evaluations to maximize shareholder value, which may include raising capital or exploring strategic partnerships. The company has engaged Performance Trust Capital Partners (WA:CPAP), LLC to assist in these strategic evaluations. In a separate development, shareholders elected six directors at the Annual Meeting and ratified RSM US LLP as the independent registered public accounting firm for the 2025 fiscal year. Furthermore, David Finn has been officially appointed as Chief Financial Officer, having served as Interim CFO since October 2024. These developments reflect the company’s efforts to address regulatory concerns and enhance its strategic plan.
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