After the termination of its planned merger with Patriot Bank, Stamford-based American Challenger Corp. could put itself up for sale.
American Challenger has hired Citi as a strategic adviser for a possible sale, the company said in a statement yesterday afternoon.
The challenger bank’s new plans came after Patriot National Bancorp, Patriot Bank’s parent company, said Wednesday that the companies had mutually agreed to terminate their merger agreement.
The two Stamford-based companies had announced merger plans in November 2021, originally planning a reverse subsidiary merger. The merger agreement was amended earlier this year to have Patriot as the surviving entity. The deal had called for Patriot to raise $875 million in capital.
The companies mutually determined that they could not satisfy all closing conditions of the merger agreement as it was structured, and the boards of each company unanimously decided to terminate the merger agreement.
American Challenger said yesterday that its digital bank technology and operations platform were ready to launch. The platform is designed for retail lending and deposits, as well as commercial operations, the statement said.
Among possible acquisition targets are domestic and foreign banks. American Challenger said these banks could use its technology to launch a nationwide digital bank in the U.S. Banks could also replace existing bank technology through American Challenger’s core migration tool, the statement said.
“The company’s modern, cloud-based, proprietary technology generates significant operating efficiencies that it believes will allow any bank to reduce the cost-to-income ratio for its digital operations to below 30 percent,” the statement said.
Separately, Patriot Bank said in a securities filing yesterday that it has terminated investment agreements tied to the merger, including agreements with investment funds involved in a private placement of approximately $540 million.