Shareholders of Patriot National Bancorp Inc. in Stamford, Conn., have approved a deal to recapitalize the company.

The $866 million-asset company said that the shareholders supported increasing the number of common shares from 60 million to 100 million.

Of the 40 million new shares, 33.3 million are expected to be sold to PNBK Holdings LLC, a holding company backed by New York investor Michael Carrazza.

Patriot and Carrazza signed a letter of intent for the latter's $50 million investment in July 2009 and signed a definitive agreement in December.

The deal is expected to give Carrazza an 88% stake in Patriot, making it highly dilutive for the other shareholders.

Carrazza, however, included a sweetener in the deal to reward existing shareholders if credit quality improves.

"We are very excited that Patriot shareholders demonstrated such overwhelming support for the [PNBK] transaction," Carrazza said in a press release Wednesday.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.