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DMG Bancshares, Inc. to Acquire Liberty Bancorp

March 01, 2022, 07:10 AM
Filed Under: Mergers & Acquisitions

DMG Bancshares, Inc. and Liberty Bancorp jointly announced the signing of 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. Headquartered in South 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, will have total assets approaching $500 million with four locations operating under the name, Liberty Bank, N.A.

“I am pleased to announce that Liberty has agreed to join DMG to create a stronger combined business banking platform with greater scale,” said Don Griffith, Chairman and Chief Executive Officer of DMG Bancshares, Inc. “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.” Mr. Griffith continued, “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.”

Bruce Farrell, President, Chief Executive Officer & Director of Liberty, added, “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. 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.”

Deborah Marsten, President, Chief Operating Officer and Director of DMG, added, “Liberty is a great fit for us. 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 definitive merger agreement has been unanimously approved by the boards of directors of both DMG and Liberty. 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.

Transaction Advisors

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

DMG is the parent company of California First National Bank (CalFirst), a full-service commercial bank supporting businesses and entrepreneurs with an expertise in commercial real estate. The bank operates out of its Irvine, CA, office and provides service to the greater Orange County and Los Angeles County markets. DMG was capitalized in early 2021 with capital commitments of $170 million. The executive officers and majority of the staff are all alumni of and were instrumental in the success of Grandpoint Bank which operated in Los Angeles from 2010 until it was sold in 2018.

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