ODNB Financial Corporation and National Capital Bancorp, Inc. announced a merger of equals on Monday that will create a top-tier community bank headquartered in Washington DC with approximately $2.4 billion in total assets. The transaction will see NACB merge into ODNB, with the combined holding company renamed National Capital Bancorp, Inc.
Merrill described the deal as a strategic combination, saying NACB brings one of the strongest deposit bases in the Washington DC region to complement ODNB's growth rate. The renamed holding company will inherit the National Capital identity, while ODNB shareholders will hold the majority of the combined equity. The bank will operate as The National Capital Bank of Washington, and the deal is valued at about $97.8 million; ODNB, based in Tysons Corner, Virginia, had about $1.6 billion in assets and NACB about $735 million.
DEAL TERMS AND OWNERSHIP SPLIT
Under the agreement, NACB shareholders may elect to receive either 100% stock, at an exchange ratio of 5.2390 ODNB shares per NACB share, or 100% cash at $83.00 per NACB share, or a mixed 90/10 stock-and-cash consideration. The cash component of the merger consideration is capped at 10% of the total, and is also limited to $1.0 million (12,048 shares) per NACB shareholder, subject to proration.
Following completion, ODNB shareholders are expected to own approximately 65% to 68% of the combined company, with NACB shareholders holding the remaining 32% to 35%. The precise split will depend on the election mix and any proration required to enforce the 10% cash cap set out in the agreement.
The merger agreement was unanimously approved by the boards of both companies.
COMMUNITY BANK SCALE IN THE CAPITAL
At approximately $2.4 billion in combined assets, the new National Capital Bancorp will be the seventh-largest bank headquartered in the Washington DC metropolitan area, with 10 branches across Washington DC, Virginia, Maryland, Pennsylvania and Florida. Anderson said greater scale, expanded resources, higher loan limits and broader geographic reach would leave the combined bank better positioned to serve customers.
The combined company expects to list its common stock on Nasdaq or the New York Stock Exchange under the ticker symbol NACB.
ODNB chairman and chief executive Mark Merrill will be chief executive of the combined company, NACB chairman and chief executive Randy Anderson Jr will become non-executive chairman, and ODNB president Jack Infield will be president of the holding company. The combined board will have 10 directors from ODNB and seven from NACB.
Completion of the merger will be subject to regulatory approvals and the votes of shareholders at both companies. Directors of both companies have agreed to vote their shares in favour of the merger.
The companies expect the deal to close in the fourth quarter of 2026. "This strategic combination creates a strong and promising future for our organization, our customers, and our shareholders," Merrill said.