SCHEDULE: Patriot National Bancorp Insider Increases Stake to 8.3% Through Preferred Stock Conversion

Steven Sugarman and related entities have increased their beneficial ownership in Patriot National Bancorp Inc. to 8.3% following the automatic conversion of Series A Preferred Stock into non-voting common stock.

Summary

• Steven Sugarman, President and CEO, and director of Patriot National Bancorp Inc., along with his spouse Ainslie Sugarman and the Steven and Ainslie Sugarman Living Trust (collectively, the "Reporting Persons"), have updated their beneficial ownership.
• On July 3, 2025, 25,000 shares of Series A Preferred Stock held by the Trust automatically converted into 2,000,000 shares of non-voting common stock.
• Each share of non-voting common stock is convertible into one share of voting common stock, subject to a limitation that no holder can beneficially own more than 9.99% of the issued and outstanding voting securities.
• The Reporting Persons now collectively beneficially own 7,019,978 shares of Patriot National Bancorp Inc. common stock.
• This aggregate amount represents 8.3% of the 84,783,830 shares of Voting Common Stock outstanding as of the close of business on July 3, 2025.

Sentiment

Score: 7

Explanation: The filing indicates an increase in insider ownership by the CEO and related entities, which is generally viewed positively as it suggests confidence in the company's future. The transaction is a pre-determined conversion, not a new investment, but it solidifies the insider's stake. There are no explicit negative financial outcomes or new risks introduced beyond the existing beneficial ownership limitation.

Positives

• Increased insider ownership by the CEO and director, Steven Sugarman, and his family, potentially signaling confidence in the company's future.
• The conversion of preferred stock into common stock simplifies the capital structure by reducing the amount of preferred equity.

Negatives

• The newly converted common stock is initially non-voting, and its conversion to voting common stock is subject to a 9.99% beneficial ownership limitation, which could restrict the immediate voting power of the increased stake.

Risks

• The 9.99% beneficial ownership limitation on the conversion of non-voting common stock to voting common stock could limit the influence of the Reporting Persons despite their significant stake.

Future Outlook

The Reporting Persons state they have no present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) (j) of Item 4 of the form of Schedule 13D, beyond the reported transaction.

Management Comments

• The Reporting Persons are filing this Amendment to report the transaction set forth in Item 3 above.

Industry Context

This filing is a routine disclosure of a change in beneficial ownership by an insider, common in the financial services industry. It reflects an internal capital structure adjustment and an increase in a key executive's stake, which can be viewed as a sign of confidence in the banking sector, particularly for regional banks like Patriot National Bancorp.

Comparison to Industry Standards

• The 8.3% beneficial ownership stake held by Steven Sugarman and related entities is a significant insider position, aligning with or exceeding typical insider stakes seen in smaller to mid-sized regional banks, where management often holds substantial equity.
• The conversion of preferred stock to common stock is a standard financial maneuver, often undertaken to simplify capital structures or increase liquidity for the converted shares, similar to actions taken by other financial institutions like First Republic Bank (prior to its acquisition) or SVB Financial Group (prior to its collapse) in managing their capital stacks, though the specific context and outcomes differ.

Corporate Governance

Related Party Transactions

• The transaction involves the Steven and Ainslie Sugarman Living Trust, Steven Sugarman (President and CEO, and director of the Issuer), and Ainslie Sugarman (spouse of Steven Sugarman), indicating a related party transaction through the conversion of preferred stock held by the Trust.

Stakeholder Impact

• Shareholders: The increase in insider ownership may be viewed positively, signaling management's commitment. The conversion from preferred to common stock could also simplify the capital structure.
• Management: Steven Sugarman and Ainslie Sugarman, as trustees and beneficiaries, solidify their stake in the company, aligning their interests further with other shareholders.

Next Steps

• The non-voting common stock held by the Trust remains convertible into voting common stock, subject to the 9.99% beneficial ownership limitation.

Key Dates

Recommendation

Keywords

Patriot National Bancorp, Steven Sugarman, Schedule 13D, beneficial ownership, preferred stock conversion, common stock, insider ownership, SEC filing, financial reporting, corporate governance