GOP's preferred bank, Chain Bridge, valued at $138 mln in lukewarm NYSE debut (updated)

Chain Bridge Bancorp

04/10/2024 15:57

(Updates valuation and shares in headline and paragraph 1, adds
analyst comments in paragraphs 4-5 and 7-9)
    By Niket  Nishant
       Oct 4 (Reuters) - Republican Party's top bank, Chain
Bridge Bancorp  CBNA.N , was valued at $138 million after its
shares fell 2% in their NYSE debut on Friday, marking a grim
start to its stint as a public company.
    The IPO was relatively rare from the banking industry,
coming at a time when the market has been dominated by entrants
from the technology and biotech space.
    While some analysts had lauded timing the IPO just a month
ahead of the presidential election, the lukewarm reception
highlights the challenges of attracting investors to a less
recognizable conservative-leaning brand.
    "An increasing number of issuers have explicitly positioned
themselves as conservative alternatives to major incumbent
businesses," said Angelo Bochanis, data and index associate at
Renaissance Capital, citing firms like Trump Media & Technology
Group  DJT.O  and Rumble  RUM.O .
    "However, Chain Bridge isn’t consumer-facing in the same way
that many of these names are."
    

    Chain Bridge's fortunes are closely tied to the Republican
Party, with the bank warning in its paperwork that any negative
event impacting the party could lead to significant deposit
outflows.
    "Chain Bridge is an economic enterprise, but the principal
risks are non-economic," said Joe Endoso, CEO of private
investment platform Linqto. 
    Still, Endoso said the stock may trade well later, given its
potential appeal to Republican retail investors and its strong
asset quality.
    "They're targeting a group of people that are not just
making an investment, but making a statement. And it's not a bad
business," he said.
    Chain Bridge has had 12 years of no non-performing loans, at
a time when worries about potential borrower defaults have
battered many players in the banking industry.
    The McLean, Virginia-based bank was founded by Peter
Fitzgerald, the former Republican U.S. Senator from Illinois. He
retired in 2005 and was succeeded to the Senate seat by former
U.S. President Barack Obama.
    With just one branch and 84 employees, it has beaten bigger
financial rivals to become a must-have partner for political
work. It has worked with the campaign of every Republican Party
presidential nominee since John McCain in 2008.
    The bank's stock opened flat at $22 per share, before
falling to $21.57. It had raised $40.7 million in its IPO on
Thursday, pricing shares at $22, below the $24 to $26 range it
initially targeted.

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Republican Party's lender of choice pulls off rare U.S. banking
sector IPO    https://tmsnrt.rs/4eQy1wI
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 (Reporting by Niket Nishant in Bengaluru; Editing by Krishna
Chandra Eluri and Vijay Kishore)
 ((Niket.Nishant@thomsonreuters.com;))