Trustar Bank will acquire Forbright Bank’s Washington, D.C., area branches, giving the Great Falls, Virginia-based lender an extra $750 million in local deposits, the banks said Friday.
The transaction, expected to close in the fourth quarter, frees up Forbright to drill down on its national digital banking platform, middle-market commercial lending strategy and fee-based advisory business, the Chevy Chase, Maryland-based bank said.
“Our national businesses have reached the scale and momentum that allow us to focus our capital, technology, and management attention where our competitive advantages are strongest,” John Delaney, the Democratic former congressman who founded Forbright, said in a statement Friday.
The $8.5 billion-asset Forbright will hold onto its Chevy Chase headquarters but shed branches in Potomac and North Bethesda, Maryland, along with a customer service hub in McLean, Virginia.
Trustar will add those locations to its six-branch footprint. The $1.14 billion-asset lender launched in 2019 as the capital region’s first de novo since 2008.
“This is a unique, strategically-aligned opportunity to strengthen Trustar Bank’s presence in our core markets, and add valuable deposits and relationships, positioning Trustar for growth,” the bank’s CEO, Shaza Andersen, said Friday. “This transaction will efficiently add scale to our franchise and create long-term value for our shareholders.”
The purchase price represents a $19 million deposit premium, Trustar noted, adding that it expects the tie-up to be accretive to 2027 earnings.
“We look forward to welcoming Forbright customers and employees to the Trustar family and to providing our comprehensive range of banking products and services at these new locations,” Andersen said. “Our team places a high value on personal connections and trust, and we are focused on ensuring a seamless transition while building on the valued relationships Forbright Bank has established.”
Forbright, meanwhile, emphasized that none of its national lending or national digital deposits were involved in the transaction.
“The results across our nationwide businesses are accelerating, and the structural shifts in banking are real and durable,” Forbright CEO Don Cole said in a statement Friday. “Our job is to position Forbright to be in front of these trends, not to spread ourselves across non-core businesses. This transaction is about becoming more focused, more efficient, and better positioned for long-term growth.”
The bank’s language was more pointed.
“Every minute spent chasing distractions is a minute not building things that create disproportionate value,” the bank wrote in its press release. “The Bank focuses energy on areas where expertise matters, relationships endure, and where it can create tenable and lasting differentiation.”
Forbright, a private lender that offers environmentally conscious online banking and direct lending products, launched in 2003 as Congressional Bank. It rebranded to its current name in 2022.
Since then, however, it has weathered at least two consent orders from regulators. The Federal Deposit Insurance Corp. ordered Forbright in May 2024 to limit its asset growth and adjust its funding model after the agency deemed the bank’s “reliance on noncore funding” as a liquidity risk.
The noncore funding came from brokered sweep deposits, a type of deposit sourced from uninvested cash in customer accounts. Brokered sweep deposits are sometimes seen as “hot money” because they migrate toward higher interest rate yields and are less “sticky” than typical retail deposits.
Around the same time, the FDIC downgraded Forbright’s Community Reinvestment Act rating.
In an earlier December 2022 action, the FDIC and Maryland Office of Financial Regulation ordered Forbright to address anti-money laundering, counterterrorism financing controls, board oversight and third-party risk management.
The 2022 and 2024 orders were terminated last year.
