Trustar Bank, headquartered in Great Falls, Virginia, announced on Friday that it will acquire the Washington, D.C. area branches of Forbright Bank, a move that will bring approximately $750 million in local deposits to the former. The two banks confirmed the transaction in a joint statement released that day.

The transaction is expected to close in the fourth quarter. Forbright Bank stated that this move will allow it to concentrate resources on developing its national digital banking platform, middle-market commercial lending strategy, and fee-based advisory business. The bank, headquartered in Chevy Chase, Maryland, made these remarks in the related announcement.

"Our national business has reached a considerable scale and growth momentum, which enables us to focus our capital, technology, and management energy on areas where we have the strongest competitive advantages," said John Delaney, founder of Forbright Bank and former Democratic congressman, in a statement on Friday.

Forbright Bank, with total assets of $8.5 billion, will retain its Chevy Chase headquarters but will divest branches in Potomac and North Bethesda, Maryland, as well as a customer service center in McLean, Virginia.

Trustar Bank will incorporate these locations into its existing network of six branches. The bank, with total assets of $1.14 billion, was established in 2019 and is the first newly chartered bank institution in the capital region since 2008.

"This is a unique and strategically fitting opportunity to strengthen Trustar Bank's position in its core market and add valuable deposits and customer relationships that lay the foundation for Trustar's growth," said the bank's CEO, Shaza Andersen, on Friday. "This transaction will efficiently scale our operations and create long-term value for shareholders."

Trustar Bank noted that the purchase price includes a $19 million deposit premium and expects the transaction to be accretive to earnings in 2027.

"We look forward to welcoming Forbright's customers and employees into the Trustar family and offering our full range of banking products and services at these new locations," Andersen added. "Our team places a high value on personal connections and trust, and we will focus on ensuring a smooth transition while strengthening the valuable customer relationships Forbright Bank has built."

Meanwhile, Forbright Bank emphasized that its national lending business and national digital deposit business are not part of this transaction.

"The performance of our national business is accelerating, and the structural changes in banking are real and lasting," said Don Cole, CEO of Forbright Bank, in a statement on Friday. "Our responsibility is to position Forbright at the forefront of these trends rather than spreading resources across non-core businesses. This transaction is about making us more focused, more efficient, and better prepared for long-term growth."

The bank's language in the press release was more direct: "Every minute spent chasing distractions is one less minute spent building something that creates disproportionate value. Banks should focus their efforts on areas where specialized expertise matters, customer relationships endure, and solid, lasting differentiation can be established."

Forbright Bank is a private bank offering environmentally conscious online banking and direct lending products. It was established in 2003 under the name Congressional Bank and was renamed to its current name in 2022.

However, since the name change, the bank has experienced at least two consent orders issued by regulators. In May 2024, the Federal Deposit Insurance Corporation (FDIC) ordered it to limit asset growth and adjust its funding model after determining that its "reliance on non-core funding" posed a liquidity risk.

The aforementioned non-core funding comes from brokered deposits—a type of deposit sourced from cash not invested in customer accounts. Brokered deposits are sometimes viewed as "hot money" because they flow to higher-yielding products and are less sticky than ordinary retail deposits.

Around the same period, the FDIC downgraded Forbright Bank's Community Reinvestment Act rating.

Earlier, in December 2022, the FDIC and the Maryland Office of Financial Regulation had ordered Forbright Bank to remediate issues related to anti-money laundering, anti-terrorism financing controls, board oversight, and third-party risk management.

The 2022 and 2024 consent orders were terminated last year.