Patriot National Bancorp, Inc., the parent company of Patriot Bank, N.A., and American Challenger Development Corp., have entered into a definitive agreement under which Patriot will acquire American Challenger via a reverse subsidiary merger, with American Challenger surviving as a wholly owned subsidiary of Patriot.

The companies say the merger will create a purpose-driven, digital-first national bank with highly efficient operations to generate industry leading financial performance and a technology driven banking experience that will offer competitive rates and a premium customer experience.

Patriot also entered into separate definitive agreements with certain investors, consisting of a private placement in an aggregate principal amount of approximately $540 million of newly issued Patriot voting and non-voting common stock priced at $17.69 per share, warrants for the purchase of non-voting common stock of Patriot, and preferred stock of Patriot Bank. 

Patriot intends to raise an additional principal amount of at least $350 million, for a total capital raise of at least $890 million, and intends to negotiate and enter into definitive agreements with other investors for the purchase of subordinated debt securities and preferred stock of Patriot in addition to further sales of Patriot common stock and warrants for the purchase of Patriot non-voting common stock. 

Following the Merger, Patriot Bank will adopt the American Challenger business plan and will operate as two divisions – the Patriot Bank Division, which will continue to operate Patriot Bank’s existing business, and the American Challenger Division, which will execute the high-growth American Challenger business plan.

American Challenger says it is reimagining what it means to be a bank and has built the infrastructure necessary to deliver better rates and a truly differentiated customer experience.

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