Capital Bancorp, Inc. ("CBNK” or “Capital") (NASDAQ: CBNK) and
Integrated Financial Holdings, Inc. (“IFH”) (OTCQX: IFHI) today
announced that they have entered into a definitive merger agreement
under which CBNK will acquire IFH in a cash and stock transaction
valued at $66 million, exclusive of the value of a dividend to be
received by IFH shareholders at or immediately prior to closing.
Under the terms of the merger agreement, IFH shareholders will,
subject to certain adjustments, receive $5.36 in cash and 1.115
shares of CBNK common stock for each share of IFH common stock.
Based on the closing price of Capital common stock of $20.00 on
March 26, 2024, the implied per share purchase price, inclusive of
the cash consideration, is $27.66. At or immediately prior to the
closing, IFH is expected to distribute its minority equity interest
in Dogwood State Bank to IFH shareholders in the form of a dividend
equal to approximately 0.469 shares of Dogwood State Bank for each
share of IFH common stock, a value of $7.69/share or approximately
$18 million based on the closing price of Dogwood State Bank on
March 26, 2024. At closing, Capital shareholders will own
approximately 84% and IFH shareholders will own approximately 16%
of the combined company.
This transaction adds another high-return vertical to Capital’s
business model, further complementing its existing set of
commercial and consumer businesses and contributing to a highly
diversified and differentiated earnings mix across various local,
regional and national businesses.
Creating a Nationwide Leader in Government Guaranteed
Lending and Servicing
The transaction will create a best-in-class nationwide lender in
government guaranteed lending across both U.S. Department of
Agriculture (“USDA”) and U.S. Small Business Administration (“SBA”)
government guaranteed lending. Including Windsor Advantage’s
industry leading government guaranteed servicing platform, Capital
is well positioned to capitalize on this growing niche.
“Capital has a track record of creating value by investing in
teams and lines of businesses that generate strong returns for
shareholders. This acquisition represents a continuation of our
strategy to build a highly diversified business that generates
best-in-class returns for our shareholders and allows us to better
serve our customers,” said Ed Barry, Chief Executive Officer of
Capital Bank. “IFH’s expertise originating and servicing USDA and
SBA loans fits well with our strategic objectives and will allow us
to serve a market with substantial need and growth potential.”
“We are excited for this partnership with Capital and for the
benefits that it brings to both banks. With a larger balance sheet
and our combined lending and deposit-gathering capabilities we
believe that we can secure and grow our position as a leader in
nationwide government guaranteed lending,” said Marc McConnell,
Chairman, President and CEO of IFH.
Financial and Strategic Benefits of the
Merger
1) |
Meaningfully grows commercial loan book: ~38% of
the pro forma loan book will consist of C&I and owner-occupied
CRE |
2) |
Balanced pro forma
business mix: ~70% contribution from commercial and ~30%
contribution from consumer on a net income basis based on
illustrative adjusted full year 2023 earnings |
3) |
Financially
compelling: expected to produce 17% EPS accretion in 2025
with manageable tangible book value dilution of ~5% earned back in
approximately ~1.8 years |
4) |
Significant accretion to
returns profile: expected to be ~260bps accretive to
CBNK’s already high return on tangible common equity in 2025 |
5) |
Increases Fee
Income: Pro forma fee income contribution will exceed ~20%
of total revenue |
6) |
Robust pro forma capital
ratios: Modest capital ratio dilution; Strong pro forma
capital generation; Pro forma tangible common equity / tangible
assets ratio of 11.0% |
Leadership
Upon closing of the transaction, Marc McConnell, Chairman,
President and CEO of IFH, will join the board of directors of
Capital Bancorp, Inc. and Capital Bank. A. Riddick Skinner, EVP of
Government Lending at IFH, will join Capital Bank as Head of
Government Guaranteed Lending Program. Melissa Marsal, EVP and
Chief Operating Officer of IFH, will join Capital Bank in a
leadership role. Mike Breckheimer, EVP and Chief Strategy Officer
at IFH, will join Capital Bank as Head of Windsor Advantage.
Approvals
The transaction with IFH has been unanimously approved by both
IFH’s and CBNK’s boards of directors and is expected to be
completed in the second half of 2024, subject to approval of
Capital’s and IFH’s shareholders, regulatory approvals and the
satisfaction of other customary closing conditions.
Advisors
Stephens Inc. served as financial advisor and Squire Patton
Boggs (US) LLP served as legal advisor to CBNK. Raymond James &
Associates, Inc. served as financial advisor and Wyrick Robbins
Yates & Ponton LLP served as legal advisor to IFH.
About Integrated Financial Holdings, Inc.
Integrated Financial Holdings, Inc. is a financial holding
company based in Raleigh, North Carolina. Integrated Financial
Holdings had assets of approximately $548 million at December 31,
2023. The company is the holding company for West Town Bank &
Trust, an Illinois state-chartered bank. West Town Bank & Trust
provides banking services through its full-service office located
in the greater Chicago area. IFH is also the parent company of
Windsor Advantage, LLC, a loan service provider that offers
community banks and credit unions with a comprehensive outsourced
U.S. Small Business Administration 7(a) and U.S. Department of
Agriculture lending platform. IFH is registered with and supervised
by the Federal Reserve. West Town Bank & Trust’s primary
regulators are the Illinois Department of Financial and
Professional Regulation and the FDIC.
About Capital Bancorp, Inc.
Capital Bancorp, Inc., Rockville, Maryland is a registered bank
holding company incorporated under the laws of Maryland. Capital’s
wholly-owned subsidiary, Capital Bank, N.A., is the fourth largest
bank headquartered in Maryland at December 31, 2023. Capital
Bancorp has been providing financial services since 1999 and now
operates bank branches in four locations in the greater Washington,
D.C. and Baltimore, Maryland markets. Capital Bancorp had assets of
approximately $2.2 billion at December 31, 2023 and its common
stock is traded in the NASDAQ Global Market under the symbol
“CBNK.” More information can be found at Capital’s website
www.CapitalBankMD.com under its investor relations page.
Forward-Looking Statements
This release includes “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, with respect to Capital’s and IFH’s beliefs, goals,
intentions, and expectations regarding the proposed transaction and
anticipated financial results; our estimates of future costs and
benefits of the actions we may take; our ability to achieve our
financial and other strategic goals; the expected timing of
completion of the proposed transaction; the expected costs of the
transaction; the expected cost savings, synergies and other
anticipated benefits from the proposed transaction; and other
statements that are not historical facts.
Forward‐looking statements are typically
identified by such words as “believe,” “expect,” “anticipate,”
“intend,” “outlook,” “estimate,” “forecast,” “project,” “should,”
“will,” and other similar words and expressions, and are subject to
numerous assumptions, risks, and uncertainties, which change over
time. These forward-looking statements include, without limitation,
those relating to the terms, timing and closing of the proposed
transaction.
Additionally, forward‐looking statements speak
only as of the date they are made; Capital and IFH do not assume
any duty, and do not undertake, to update such forward‐looking
statements, whether written or oral, that may be made from time to
time, whether as a result of new information, future events, or
otherwise, except as required by law. Furthermore, because
forward‐looking statements are subject to assumptions and
uncertainties, actual results or future events could differ,
possibly materially, from those indicated in such forward-looking
statements as a result of a variety of factors, many of which are
beyond the control of Capital and IFH. Such statements are based
upon the current beliefs and expectations of the management of
Capital and IFH and are subject to significant risks and
uncertainties outside of the control of the parties. Caution should
be exercised against placing undue reliance on forward-looking
statements. The factors that could cause actual results to differ
materially include, but are not limited to, the following: the
occurrence of any event, change or other circumstances that could
give rise to the right of one or both of the parties to terminate
the definitive Merger Agreement between Capital and IFH; the
outcome of any legal proceedings that may be instituted against
Capital or IFH; the possibility that the proposed transaction will
not close when expected or at all because required regulatory,
shareholder or other approvals are not received or other conditions
to the closing are not satisfied on a timely basis or at all, or
are obtained subject to conditions that are not anticipated (and
the risk that required regulatory approvals may result in the
imposition of conditions that could adversely affect the combined
company or the expected benefits of the proposed transaction); the
ability of Capital and IFH to meet expectations regarding the
timing, completion and accounting and tax treatments of the
proposed transaction; the risk that any announcements relating to
the proposed transaction could have adverse effects on the market
price of the common stock of Capital; the possibility that the
anticipated benefits of the proposed transaction will not be
realized when expected or at all, including as a result of the
impact of, or problems arising from, the integration of the two
companies or as a result of the strength of the economy and
competitive factors in the areas where Capital and IFH do business;
certain restrictions during the pendency of the proposed
transaction that may impact the parties’ ability to pursue certain
business opportunities or strategic transactions; the possibility
that the transaction may be more expensive to complete than
anticipated, including as a result of unexpected factors or events;
diversion of management’s attention from ongoing business
operations and opportunities; the possibility that the parties may
be unable to achieve expected synergies and operating efficiencies
in the Merger within the expected timeframes or at all and to
successfully integrate IFH’s operations and those of Capital; such
integration may be more difficult, time consuming or costly than
expected; revenues following the proposed transaction may be lower
than expected; IFH’s and Capital’s success in executing their
respective business plans and strategies and managing the risks
involved in the foregoing; the dilution caused by Capital’s
issuance of additional shares of its capital stock in connection
with the proposed transaction; effects of the announcement,
pendency or completion of the proposed transaction on the ability
of IFH and Capital to retain customers and retain and hire key
personnel and maintain relationships with their suppliers, and on
their operating results and businesses generally; risks related to
the potential impact of general economic, political and market
factors on the companies or the proposed transaction and other
factors that may affect future results of IFH and Capital; the
effects of inflation on IFH, Capital and the proposed transaction;
the impact of changing interest rates on IFH and Capital; and the
other factors discussed in the “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” sections of Capital’s Annual Report on Form 10‐K for
the year ended December 31, 2023 and in other reports Capital files
with the SEC.
Additional Information and Where to Find It
In connection with the proposed transaction,
Capital will file a registration statement on Form S-4 with the
SEC. The registration statement will include a joint proxy
statement of Capital and IFH, which also constitutes a prospectus
of Capital, that will be sent to Capital’s and IFH’s shareholders
seeking certain approvals related to the proposed transaction.
The information contained herein does not
constitute an offer to sell or a solicitation of an offer to buy
any securities or a solicitation of any vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. INVESTORS AND SECURITY HOLDERS OF CAPITAL AND
IFH AND THEIR RESPECTIVE AFFILIATES ARE URGED TO READ, WHEN
AVAILABLE, THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY
STATEMENT/PROSPECTUS TO BE INCLUDED WITHIN THE REGISTRATION
STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO
BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION,
AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT IFH, CAPITAL
AND THE PROPOSED TRANSACTION. Investors and security holders will
be able to obtain a free copy of the registration statement,
including the joint proxy statement/prospectus, as well as other
relevant documents filed by Capital with the SEC containing
information about IFH and Capital, without charge, at the SEC’s
website (http://www.sec.gov). In addition, copies of
documents filed with the SEC by Capital will be made available free
of charge in the “Investor Relations” section of Capital’s
website, https://www.capitalbankmd.com, under the heading “SEC
Filings;” and investors may obtain free copies of the joint proxy
statement/prospectus (when available) by contacting Integrated
Financial Holdings, Inc., Attn: Steven E. Crouse, 8450 Falls of
Neuse Road, Suite 202, Raleigh, NC 27615, telephone: (919)
861-8018.
Participants in
Solicitation
IFH, Capital, and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies in respect of the proposed
transaction under the rules of the SEC. Information regarding
Capital’s directors and executive officers is available in its
definitive proxy statement, which was filed with the SEC on April
4, 2023, and certain other documents filed by Capital with the SEC.
Other information regarding the participants in the solicitation of
proxies in respect of the proposed transaction and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC. Free copies of these documents, when available, may be
obtained as described in the preceding paragraph.
FINANCIAL CONTACT: Jay Walker (301) 468-8848 x1223
MEDIA CONTACT: Ed Barry (240) 283-1912
WEB SITE: www.CapitalBankMD.com
Grafico Azioni Capital Bancorp (NASDAQ:CBNK)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Capital Bancorp (NASDAQ:CBNK)
Storico
Da Set 2023 a Set 2024