DMG Bancshares Acquires Liberty Bancorp for $31.2MM

DMG Bancshares, the parent company of California First National Bank, and Liberty Bancorp signed a definitive merger agreement under which DMG will acquire Liberty in an all-cash transaction with a base consideration of approximately $31.2 million, or $35.19 per Liberty share for all Liberty shareholders. In addition to the base consideration, cash consideration of up to approximately $2.9 million, or $3.31 per Liberty share for all Liberty shareholders, may become payable to Liberty shareholders at or following the closing depending on the occurrence of certain events.

Liberty’s primary subsidiary, Liberty Bank, was founded in 1982 and serves the business communities of the San Francisco Peninsula and San Lorenzo Valley in California. Headquartered in San Francisco, Liberty Bank had $293 million in total assets, $216 million in total loans and $254 million in total deposits as of Dec. 31, 2021.

Following the merger, DMG will have total assets approaching $500 million with four locations operating under the name Liberty Bank.

“I am pleased to announce that Liberty has agreed to join DMG to create a stronger combined business banking platform with greater scale,” Don Griffith, chairman and CEO of DMG Bancshares, said. “Liberty is a respected banking institution which has focused on serving the needs of small and medium-sized businesses in the vibrant San Francisco Bay Area economy. This acquisition adds to our momentum in creating a premier business bank in California. We are eager to welcome the talented employees and loyal customers of Liberty into DMG, and we look forward to our combined success going forward.”

“We are very excited to join DMG and believe this combination will deliver significant value to our shareholders and great opportunities for our clients and employees,” Bruce Farrell, president, CEO and director of Liberty, said. “We believe this is a natural fit which increases lending capabilities, expands capital resources and provides a more expansive product offering to the San Francisco Peninsula business community.”

“Liberty is a great fit for us,” Deborah Marsten, president, chief operating officer and director of DMG, said. “I think our corporate culture and approach to business banking will be highly complementary. The greater San Francisco Bay Area is an excellent business banking market area and this combination will provide us with the operational scale to take advantage of significant growth opportunities.”

The boards of directors of both DMG and Liberty unanimously approved the definitive merger agreement. The merger is subject to regulatory approvals, approval by Liberty shareholders and certain other customary closing conditions and is expected to close in the summer of 2022.

Piper Sandler served as financial advisor and provided a fairness opinion to Liberty’s board, and Aldrich & Bonnefin served as legal counsel to Liberty. Skadden, Arps, Slate, Meagher & Flom served as legal counsel to DMG.

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