Independence Federal Savings Bank (IFSB) in Washington, D.C., is taking a second shot at buying Colombo Bancshares in Rockville, Md., three years after the companies called off plans to merge.
Technically, the $69 million-asset Independence would be considered the acquirer; Colombo shares would be converted to the right to receive Independent common stock. Financial terms were not disclosed, though the company will adopt the $135 million-asset Colombo's name, operate out of Rockville and be led by the seller's board management team.
Morton Bender, a real estate investor in Washington who holds majority stakes in the banks, will invest an undisclosed amount to recapitalize the company as part of the deal. Bender is the only investor to own preferred stock in the companies and, under terms of the deal, those shares would also be converted to rights to obtain Independence common stock.
Independence agreed to buy Colombo in 2009, but the agreement was terminated after more than a year of regulatory delays. Independence, one of the most-troubled banks in the Washington area, has been shrinking its balance sheet and shedding problem loans under pressure from regulators.
"This merger is a combination of two banks with very similar philosophies, cultures and core values," Elliott Hall, Independence's chairman, said in a press release. "With the infusion of additional capital we are excited to have the resources to continue to serve the people of the District of Columbia."
The companies said they expect to complete the merger in the fourth quarter. The combined would have three branches in Washington and four in Maryland.