Patriot National Bancorp and the aspiring neobank American Challenger Development Corp. have terminated their proposed merger.
The deal was called off due to “the parties’ expected inability to satisfy certain of the closing conditions to the merger and recapitalization,” according to a press release Thursday from American Challenger.
Under the deal, the holding company of the $975 million-asset Patriot Bank in Stamford, Connecticut, would have been tasked with executing a capital raise of at least $875 million to facilitate the neobank’s business plan, according to the press release.
With the deal canceled, American Challenger, which is also based in Stamford, said that it has recruited the help of Citigroup as a strategic advisor to oversee its exploration of a possible sale.
Patriot said in a separate press release that the two parties remain in discussions about a modified deal, despite uncertainty about whether a new agreement can be put in place.
The deal’s termination marks the latest pivot for American Challenger, which describes itself as offering a platform that’s ready to launch a national retail deposit, lending and commercial operation.
American Challenger earlier sought to get its own bank charter, obtaining initial conditional approval from the Office of the Comptroller of the Currency to launch a de novo institution in December 2020.
Patriot National Bancorp was exploring a digital pivot, and American Challenger Development Corp. had been seeking a bank charter in its quest to become open an all-digital bank. They decided it was quicker to join forces.
Last November, Patriot said that it would pay $119 million in cash and stock for American Challenger.
In an
In June, Patriot received conditional approval from the OCC to implement American Challenger’s business plan.
