Capital Bancorp, Inc. Announces Acquisition of Integrated Financial Holdings, Inc.

Further Diversifies CBNK with a Niche C&I Business that is Capital Efficient, High-Return and Generates Meaningful Fee Income

ROCKVILLE, Md., March 28, 2024 (GLOBE NEWSWIRE) -- 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.”