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Stamford, Connecticut-based Patriot National Bancorp Inc. (NASDAQ:PNBK), currently trading at $1.52 with a market capitalization of $5.93 million, announced the completion of a significant private placement transaction today. According to InvestingPro data, the stock has surged nearly 30% in the past week, though it remains down about 30% year-to-date. The bank raised $57.75 million through the sale of common and preferred shares, coupled with the conversion of outstanding notes.
On March 20, 2025, Patriot National Bancorp issued 60,400,106 shares of its common stock at $0.75 per share, significantly below its current trading price. Additionally, it offered 90,832 shares of a newly created Series A Non-Cumulative Perpetual Convertible Preferred Stock with a liquidation preference of $60 per share. These preferred shares are convertible into approximately 7.27 million common shares. The stock currently trades at a Price/Book ratio of 0.33, indicating potential value opportunity according to InvestingPro’s valuation metrics.
In conjunction with the equity issuance, noteholders converted around $7 million of the bank’s subordinated and senior notes into 9,333,334 common shares. The transaction terms ensure that no single investor will control more than 9.99% of the company’s outstanding voting securities, adhering to regulatory ownership limits.
The bank also entered into a Registration Rights Agreement with the investors, obligating it to file for the resale of these registrable securities with the SEC.
This financial move comes after the Nasdaq Listing Qualifications Department granted Patriot National Bancorp an exception from shareholder approval rules under the "financial viability exception" provision.
Furthermore, the bank reported a change in its executive team. David Finn, the Executive Vice President and Chief Financial Officer, has tendered his resignation effective May 15, 2025. Finn is leaving to pursue other opportunities but will assist with the transition process until his departure.
The Series A Preferred Stock issuance modifies the rights of security holders, ranking senior to the common stock regarding dividend payments and distributions upon liquidation or dissolution of the company.
This strategic financial restructuring aims to bolster the bank’s capital structure and support its ongoing operations, particularly important given the company’s recent unprofitable period. The information disclosed is based on a press release statement filed with the SEC. InvestingPro analysis reveals additional insights about PNBK’s financial health and future prospects, with over 10 exclusive ProTips available for subscribers.
In other recent news, Patriot National Bancorp Inc. reported an expected net loss of approximately $9.5 million for the last quarter of 2024, contrasting with a net income of $0.9 million from the previous year. The company attributes this decline to a provision for credit losses related to two large commercial real estate loans. In a strategic move, Patriot National Bancorp has amended its articles of incorporation to introduce a new series of preferred stock, the Series A Non-Cumulative Perpetual Convertible Preferred Stock, although no shares are currently outstanding. Additionally, the bank received an exception from Nasdaq’s shareholder approval rules to maintain its listing, citing financial viability concerns.
The bank has also entered into a regulatory agreement with the Office of the Comptroller of the Currency, which requires several remedial actions to enhance compliance and risk management practices. As part of its strategic review, Patriot National Bancorp appointed Steven Sugarman as its new President and Board member, aiming to address regulatory concerns and explore capital-raising opportunities. Moreover, David Finn has been appointed as the Chief Financial Officer, bringing experience from First Citizens Bank and CIT Group (NYSE:CIT) Inc. The company is considering strategic alternatives, including a potential capital raise or merger, and has received non-binding term sheets for a possible $60 million investment. These developments are part of Patriot National Bancorp’s ongoing efforts to stabilize its financial position and explore growth opportunities.
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