Community bank Patriot National has hit a regulatory roadblock in its plans to launch a Small Business Administrative platform, but reports in American Banker on Thursday (March 13) said the financial institution remains undeterred by the challenge.
The publication said Patriot National’s plans to acquire the SBA lending business of Hana Financial, announced last year, have hit a snag from the Office of the Comptroller of the Currency, which signed a formal agreement that sees the OCC requiring Patriot to make changes in board oversight and auditing processes.
That decision does not represent an outright rejection of the $83 million acquisition, however, according to Buckley Attorney Daniel Stipano.
“You have to look at the basis of the action and the bank’s progress in complying with it,” he told the publication. “A formal agreement is a serious action, but it’s not as serious as a cease-and-desist order.”
The takeover of Hana would propel the community bank into the SBA lending space, but bank President Richard Muskus, Jr. noted that Patriot is continuing to focus on what reports described as an “organic” approach to SBA lending.
“We want this SBA business to have a major, positive effect on our business model and continue to grow accordingly and become a name-brand SBA lender nationwide,” he told the publication.
Hana is one of the largest SBA lenders, facilitating $96.6 million in SBA 7(a) loans in fiscal year 2018.
“We’re in a very active market, metro New York and New England, so prior to launching SBA, we often would see these types of opportunities, but we weren’t able to take advantage of them,” added Muskus. “In the event we acquire Hana or any other type of SBA business, that will be an add-on.”
The company did not offer an outlook on when a Hana deal might be able to move forward, however.
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