30 Jun, 2026
Old Dominion, National Capital MOE may signal start of DC bank M&A wave
ODNB Financial Corp. and National Capital Bancorp Inc.'s merger could be the start of a Washington, DC-area M&A wave, executives said.
The merger of equals (MOE) is the city's first bank deal since 2020 when Broadway Financial Corp. and CFBanc Corp. also announced an MOE. But it might not take six years for another deal in the district, where four banks are headquartered, or the broader DC MSA, where 17 banks remain, according to Old Dominion's and National Capital's CEOs.
"I'd be shocked if we're the only one. Because everybody is talking to everybody," National Capital CEO and Chairman
Like the city itself, bank M&A in the broader DC metro area has been slow in recent years, with only four announcements between 2020 and 2025. Old Dominion and National Capital mark the fifth DC MSA bank deal since 2020.
Old Dominion Chairman and CEO Mark Merrill agreed that this deal "may be the first of more to come in the community banks size — under $10 billion — in the market."
The potential for an uptick in bank M&A coincides with ongoing stress in the area as government cuts and shutdowns rocked the region and impacted the office and multifamily segments. Both Old Dominion and National Capital have experienced a rise in nonperforming loans in the past year.
Old Dominion National Bank's nonperforming loan (NPL) ratio has sat north of 1% in the past four quarters after hovering around 0% for at least the past six quarters prior. The uptick is related to one mixed-use property loan, Merrill said, brushing off systemic issues and noting that the bank's government contracting business has grown in cyber, defense and IT since cuts were announced.
The National Capital Bank of Washington's NPL ratio was 2.24% at March 31, up from 0% at year-end 2024.
Anderson acknowledged issues in Washington, saying, "we're not alone" and citing multifamily loans as a particular area of concern. National Capital's loan portfolio comprised 8.8% multifamily at the end of the first quarter, and the pro forma combined company would maintain the same percentage, according to a deal presentation.
However, the struggling Washington economy was not the main driver for the merger "by any stretch of the imagination," Anderson said. "While we were doing just fine, I felt like we were at a turning point where we needed to come up with a strategy that would allow us to build on the things that made the bank great, but also deal with the fact that we needed to get bigger."
National Capital's growth has been fairly stagnant over the past decade, with its total assets growing 85% between 2016 and 2025, while Old Dominion's have shot up 1,914% during that time.
After closing the deal, the combined banks intend to grow at an annual rate of 8% to 10%, Merrill said, primarily organically. Executives do not have a set plan for future buys as they focus on closing the merger, but opportunistic acquisitions remain on the table.
"What we're looking to do here would be kind of take the combined company and kind of continue to grow organically. That is our focus. Are we going to be opportunistic as it relates and acquisitive as it relates to deals? Yes, but we don't need to," Merrill said. "And we felt that this was more of a growth play. ... We're combining banks at $2.5 billion to create a $5 billion company over the next five years. That's our goal."
With Old Dominion's $1.62 billion in assets and National Capital's $735.3 million in assets, the deal looks, on its face, like a traditional acquisition.
But the executives were unsatisfied with traditional merger dynamics and structured it as an MOE. National Capital's holding company will merge into Old Dominion's, but will be renamed to National Capital Bancorp Inc. National Capital Bank will be the surviving bank subsidiary as Old Dominion will merge into it.
Anderson will serve as nonexecutive Chairman and Merrill as CEO of the combined holding company and bank, while creating a 17-member board made up of seven National Capital directors and 10 directors from Old Dominion. The bank will be headquartered in Washington, while the holding company will remain in Tysons Corner, Virginia.
"In the process of negotiating the deal, what we determined early on was we wanted to take the best elements of both companies. And so in the spirit of taking the best elements of both companies, the merger of equals goes together with that concept," Merrill said.
The deal is the second US bank MOE announced so far this year, already tying 2025's total but lagging that year's deal value significantly.
