This study models a distressed bank under Central Bank of Nigeria (CBN) regulatory pressure where baseline valuation decays exponentially with multiplicative seasonality effect. Three analytical paths and theoretical expected means were simulated showing up and down horizontal trend lines instead of exponential growth. Sensitivity analysis for volatility and drift shows both plots look alike with up and down horizontal movements, unlike growth banks where volatility dominates. Results show distressed pattern trapped sideways oscillation with slow decay, indicating that both growth rate and volatility cannot rescue the bank under regulatory overhang. Implication is range-bound trading rather than buy-and-hold .The results provide insight into how regulatory policy propagates across banks, how diversification benefits change across regimes, and how risk managers can stress-test portfolios under policy uncertainty.