For the deal to fly, Congressional will have to amend its articles of incorporation to up the number of authorized shares of its common stock from 5 million to 20 million shares. All facets of the deal are subject to shareholder and regulatory approval.
“From an asset quality perspective, Congressional is the cleanest bank in Maryland,” Delaney said. “I’d like to help make it into a value-add lender for the local community, a model for what a community bank should do.”
Proceeds from the securities purchase will be used to fund the expansion of Congressional Bank, which has $251 million in assets and four branches in the Washington area.
Former Colombo Bank chief executive John R. Lane founded the institution in 2003 with $10 million, raised in 38 days. Congressional turned a profit of $188 million in the first quarter, a 66 percent increase from the same period a year earlier, according to SNL Financial. The bank has a $163 million loan book, showing $2 million in non-accruing loans, or those where interest is no longer being collected.
“They’re already well-capitalized,” said local banking analyst Bert Ely. “The question in my mind is, are they planning to go out and make acquisitions?”
Delaney would not discuss Congressional’s strategy, and Lane was not available for comment.
This is not Delaney’s first foray into banking. In July 2008, he led CapitalSource, the Chevy Chase commercial lending firm where he serves as executive chairman, in acquiring troubled community bank Fremont Investment & Loan in California. Delaney turned the 22-branch network, with $5.6 billion in deposits, into CapitalSource Bank, where he serves as chairman.
Delaney and Fish have a long history together. In addition to their roles at Alliance Partners, the duo co-founded CapitalSource in 2000. Fish resigned in 2008, leaving Delaney at the helm. Since then, the executive chairman has been transforming CapitalSource into an independent regional bank.