Old Glory Bank and Digital Asset Acquisition Corp. Mutually Terminate Merger Agreement
Old Glory Bank's parent company and SPAC Digital Asset Acquisition Corp. have scrapped their merger plans, according to a Thursday securities filing. The Federal Reserve did not approve the transaction, and no termination fee was paid. The bank will remain private for now.
Deal Termination at a Glance
- Elmore City, Oklahoma-based Old Glory Holding Company and special-purpose acquisition company Digital Asset Acquisition Corp. have mutually terminated their merger agreement, as disclosed in a securities filing on Thursday.
- The merger agreement, struck in January, was intended to create cryptocurrency-focused OGB Financial Company, a Texas corporation listed on the Nasdaq. The deal had been projected to close in the first or second quarter.
- Neither party paid a termination fee, according to the filing.
Reason for Termination
An Old Glory spokesperson said Tuesday that the Federal Reserve did not approve the transaction.
“Our CEO [and co-founder Mike Ring] will sue them at the right time, on his dime (not the company's dime),” the spokesperson said in an email.
“The response from our 6,600 stockholders and 90,000 account holders has been very positive,” the spokesperson added. “We are going to stay private for now.”
The Fed declined to comment.
A Fed supervision and regulation letter on the application process notes that filers may opt to withdraw their application if the central bank has informed them that staff recommend the Fed board deny the proposal.
Background on Old Glory Bank
Old Glory Bank is a $279.4 million-asset lender focused on “serving the Freedom Economy” with its “pro-America online banking platform.” Co-founders include former Housing and Urban Development Secretary Dr. Ben Carson and former Trump administration press secretary Sean Spicer.
Single-branch Old Glory was established in 2022 – after the group bought First State Bank and renamed it – to serve those who’ve been debanked, Ring said last year during a Senate Banking Committee hearing.
When the merger was announced in January, Carson said the deal and Nasdaq listing would provide capital needed for the bank to grow.
Executives intended for Old Glory Bank “to be the first chartered bank to fully integrate crypto into daily banking,” Michael Staw, co-founder and chief innovation officer at the bank, said in the January release.
Financial Details and Regulatory Hurdles
In January, Digital Asset Acquisition Corp. had about $176 million in a trust account, and Old Glory Bank’s pre-money valuation was set to be $250 million, the companies said. The two intended to arrange further investment of at least $50 million for closing.
Old Glory reported a $4.4 million loss for the first quarter, after posting a $14.8 million loss for 2025.
According to a prospectus filed by Digital Asset Acquisition Corp. in July, Old Glory has operated under a Federal Deposit Insurance Corp. consent order since May 2024 “for not having sufficient capital.”
“Additionally, in connection with the audit of each of Old Glory’s financial statement[s] for the calendar year 2024 and 2025, our auditor has identified a ‘going concern risk,’ which generally means a company would not have sufficient funds to operate for 12 months, and management has identified certain material weaknesses in our internal controls,” the prospectus noted.
Old Glory has failed to maintain a tier 1 leverage ratio of at least 14% as required by the consent order, but the merger was set to solve those requirements, according to the prospectus. Bank executives said they believed they would be able to negotiate with regulators to have a “more reasonable” ratio “such as 7-9%.”
“If we do not consummate this Business Combination, then we will have to pursue an alternative outcome for the Bank, because we cannot continue to fail to meet our obligatory leverage ratios,” the lender said in the prospectus. “Such alternatives may include a sale or organized wind-down of the Bank. If we take neither of these alternative actions, we would expect other regulatory actions to be taken, including actions to enjoin ‘unsafe or unsound’ practices.”
As of June 29, the bank’s tier 1 leverage ratio was less than 4%. The bank’s liquidity ratio as of March 31 was 89%, according to the prospectus.
The bank needs to raise “a little capital” to boost its tier 1 leverage ratio above 4%, and replace the amount the SPAC deal would have brought in, “and we are currently engaged in those discussions,” the Old Glory spokesperson said in the Tuesday email.