• The OCC has ended its formal enforcement agreement with Patriot Bank after determining remediation was successful
• The original action required improvements across governance, AML, capital planning and risk management
• Patriot CEO Steven Sugarman said the decision allows the bank to focus fully on disciplined growth
• The bank expects regulatory costs to fall after spending more than $5 million on remediation
• Risk professionals view the decision as evidence that sustained governance improvements can restore regulatory confidence

The Office of the Comptroller of the Currency's decision to terminate its formal enforcement agreement with Patriot Bank is being viewed across the banking sector as a notable example of how good governance can restore regulatory confidence after a period of heightened supervisory scrutiny.

The OCC ended the enforcement action effective June 30, concluding that "the safety and soundness of the Bank and its compliance with the laws and regulations does not require the continued existence of the agreement."

The move brings to an end roughly 18 months of enhanced oversight following a January 2025 formal agreement that cited the Stamford, Connecticut-based lender for financial losses and regulatory deficiencies, including unsafe or unsound practices.

The original agreement required Patriot Bank to strengthen strategic planning, capital planning, Bank Secrecy Act and anti-money laundering controls, payment activities oversight, credit administration and concentration risk management.

The bank was also required to establish a compliance committee responsible for reporting regularly to the OCC on remediation progress.

For risk professionals, the OCC's decision highlights an important regulatory principle: enforcement actions are designed not simply to punish institutions, but to drive meaningful improvements in governance and operational resilience.

Patriot President and Chief Executive Officer Steven Sugarman described the decision as a significant milestone in the bank's recovery.

"Achieving this milestone enables Patriot's team to fully focus on building America's premier bank serving high-net-worth families," Sugarman said. "We seek to grow with discipline, profitability and strategic focus as we expand our franchise into key new markets."

The bank estimates it spent more than $5 million addressing regulatory requirements through external advisers, consultants, additional staffing and remediation programs.

Sugarman said those elevated costs should now "decline sharply," while lower regulatory fees, improved funding access and greater flexibility around deposits are also expected to strengthen the bank's operating position.

The announcement was welcomed by investors, with Patriot National Bancorp shares rising sharply after the news.

The bank has also reported improving financial performance, with assets increasing to approximately $1.3 billion and a return to quarterly profitability after posting losses during the period covered by the enforcement agreement.

Industry observers say the development reinforces the value regulators place on demonstrable remediation rather than simply imposing punitive sanctions.

The OCC routinely terminates enforcement actions only after determining that institutions have substantially addressed the deficiencies identified in earlier supervisory findings.

For chief risk officers, the Patriot case also serves as a reminder that regulatory intervention increasingly spans multiple disciplines.

The original findings extended beyond financial performance to encompass governance, financial crime controls, capital management and strategic oversight, reflecting supervisors' growing emphasis on enterprise-wide risk management rather than isolated compliance failures.

The decision comes at a time when U.S. banking regulators are seeking to balance strong prudential supervision with efforts to reduce unnecessary regulatory burden.

Recent actions affecting capital requirements for smaller institutions have similarly suggested a greater willingness to tailor supervisory expectations according to a bank's size, complexity and demonstrated risk profile.

For Patriot Bank, the termination removes an important operational constraint. For the wider industry, it offers a practical example of how comprehensive remediation, sustained board oversight and investment in risk management can eventually restore regulatory trust.