Patriot National Bancorp shareholders face an 87% loss over the past three years despite a 48% rebound in the last quarter.

Patriot National Bancorp's share price has dropped 87% in the last three years, with a recent 48% gain in the last quarter. The company's revenue has shrunk by 26% per year, and its earnings have been inconsistent. Insiders have made significant purchases in the last year, but the business's ability to sustain a turnaround remains uncertain.

Patriot National Bancorp (NASDAQ: PNBK), a small community bank based in Stamford, Connecticut, has experienced significant financial turmoil in recent years. The bank's stock price has dropped by 87% over the past three years, with a recent 48% gain in the last quarter. This volatility has been accompanied by a 26% annual reduction in revenue and inconsistent earnings.

The company's troubles can be traced back to several large losses, particularly in the fourth quarter of 2024 when it reported a loss of $2.40 per share due to increased provisions for credit losses on commercial real estate loans. This was preceded by a significant loss of $6.78 per share in the third quarter of 2024, caused by a $25.1 million allowance for deferred tax assets. The company's financial struggles have led to a series of capital raises and a change in leadership.

In response to its financial difficulties, Patriot National has undertaken a series of efforts to raise capital and reduce debt. In March 2025, the company completed a private placement valued at over $50 million, issuing over 60 million new shares of common stock at $0.75 per share. Additionally, debt was restructured and converted into another 9.3 million shares. In June 2025, the company completed another offering for an additional 8.5 million shares at $1.25 per share, raising an additional $10.5 million for the company.

The bank's new CEO, Stephen Sugarman, joined the company in April 2025. Sugarman, a real estate specialist with degrees from Dartmouth and Yale Law School, was previously the CEO of Banc of California from 2012 to 2017, during which the stock for Banc of California gained over 72.5%. Sugarman and other new executives have taken significant stakes in the company, with Sugarman adding over 7 million shares to his personal holdings in March 2025 at $0.75 per share.

Despite these efforts, Patriot National Bancorp remains under regulatory supervision. The Office of the Comptroller of the Currency (OCC) designated Patriot Bank as being in a "troubled condition" due to unsafe or unsound practices. The bank has agreed to submit regular reports on corrective actions, maintain a minimum common equity tier 1 capital ratio of at least 10%, and submit a comprehensive strategic plan addressing issues related to risk management, capital planning, and operational development.

While the company has made progress in reducing its exposure to commercial real estate loans and improving its credit metrics, there is still much work to be done. The bank's non-performing assets to total assets ratio increased to 2.89% by June 30, 2025, and the ratio of non-performing loans to total net loans increased to 4.18%.

The recent 48% gain in the stock price may indicate that investors are hopeful about the company's turnaround efforts. However, the company's ability to sustain this turnaround remains uncertain, and further challenges may lie ahead.