425: DAAQ to Merge with Old Glory Bank in Q2 2026

Digital Asset Acquisition Corp. (DAAQ) announced a planned business combination with Old Glory Bank, a digital-first financial institution targeting the freedom and crypto economy, with an expected close in Q2 2026.

Summary

• Digital Asset Acquisition Corp. (DAAQ) plans a business combination with Old Glory Holding Company (Old Glory Bank).
• The transaction is targeted to close in Q2 2026, subject to customary closing conditions.
• The business combination is expected to be funded by DAAQ's cash in trust and a $50 million PIPE raise, resulting in approximately $207 million net cash on the balance sheet at closing (assuming 0% redemptions).
• The transaction implies a pro forma enterprise value of approximately $441.8 million for the combined company.
• Existing Old Glory shareholders will roll over 100% of their equity, resulting in approximately 47% ownership in the combined company.
• Old Glory Bank, launched in April 2023, is an FDIC-insured digital-first bank with a physical branch in Elmore City, OK, focusing on "America first values" and serving underserved markets including the crypto community.
• The bank has grown online retail deposit accounts to approximately 79,000 and online business deposit accounts to approximately 4,000 by December 2025.
• Total deposits grew from $10 million in April 2023 to $247 million by December 2025.
• Old Glory Bank's cost of funds was 0.86% for Q3 2025, placing it among top-decile performers in funding efficiency for its peer group.
• The combined company plans to integrate stablecoin payments (OGBUSD under GENIUS Act) and crypto-backed credit, subject to regulatory requirements and capital.

Sentiment

Score: 7

Explanation: The filing presents a strong growth story for Old Glory Bank in a niche market, with significant deposit growth and efficient funding. The proposed business combination is positioned to resolve capital constraints and enable further expansion into crypto banking. However, the presence of a regulatory Consent Order, the high required Tier 1 Leverage Ratio, and the inherent risks associated with SPAC mergers and a rapidly growing, niche bank temper the overall sentiment. The forward-looking statements are optimistic but heavily qualified by regulatory approvals and market conditions.

Positives

• Rapid growth in deposit accounts, reaching approximately 79,000 retail and 4,000 business accounts by December 2025.
• Significant deposit expansion from $10 million in April 2023 to $247 million by December 2025.
• Low cost of funds at 0.86% for Q3 2025, indicating strong funding efficiency compared to peers.
• Unique market positioning targeting "America first values," the crypto economy, and underserved segments like "Protectors" and "Value-Driven SMBs."
• High customer engagement with 72% of customers logging in every 3.22 days and $1.5 billion in customer transactions.
• Low fraud and dispute losses of only $414k in 2025.
• Strong organic customer acquisition with less than 35% of customers from paid media.
• Influential co-founders and board members with backgrounds in government and media.
• The transaction is expected to provide approximately $210.6 million cash to the balance sheet, addressing current capital constraints and regulatory leverage ratio requirements.

Negatives

• Deposit growth has been moderated by capital constraints.
• The bank has a very small loan portfolio (currently less than 4% of assets), making net interest income dependent on Federal Reserve interest and securities.
• Reliance on earned media and social media for customer acquisition, which could be limited.
• Potential for dilution for existing Old Glory and DAAQ shareholders due to the business combination.
• The ability of DAAQ's remaining public shareholders to exercise redemption rights could limit the combined company's public float.
• DAAQ's Board and Sponsor have interests in the Potential Business Combination that may differ from public shareholders.

Risks

• Old Glory Bank needs the financing from this transaction to continue deposit growth and achieve profitability.
• Profitability depends substantially on Old Glory Bank's ability to open new bank accounts at a customer acquisition cost in accordance with historical success.
• A Consent Order from the FDIC and Oklahoma State Banking Department (FDIC-24-0016b) issued May 1, 2024, mandated the adoption and audit of written policies and required a Tier 1 Leverage Ratio of 14%, which management believes will be adjusted to 8% or 9% upon transaction consummation.
• Negative public opinion could damage Old Glory Bank's reputation and adversely affect its earning potential.
• Failure to maintain a consistently high level of consumer satisfaction and trust could materially and adversely affect Old Glory Bank's financial condition.
• Limitations on Old Glory Bank's ability to obtain new customers through earned and social media channels could adversely affect profitability.
• Fluctuations in interest rates by the Federal Reserve Board may reduce net interest income and negatively impact financial condition.
• The small loan portfolio makes net interest income dependent on interest from the Federal Reserve and its portfolio of treasuries and securities.
• Small and medium-sized businesses Old Glory Bank lends to may have fewer resources to weather economic downturns, impairing loan repayment ability if the loan portfolio substantially increases.
• Old Glory Bank is currently limited in the amount it can loan to a single borrower by its capital, but this limit is expected to be removed upon transaction consummation.
• Financial condition, earnings, and asset quality could be adversely affected if required to repurchase loans originated for sale by its residential lending department.
• Inability to reach a critical mass of bank account openings, debit card users, and a safe and sound loan portfolio to support full-service operations in all 50 states would prevent the company from achieving financial goals.
• Failure to meet stringent capital requirements could limit Old Glory Bank's activities if limits are not adjusted to industry standards.
• Noncompliance with consumer protection laws (CRA, fair lending) could lead to sanctions.
• Risks of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes.
• Technology disruptions or failures, including operational or security systems, could disrupt business, cause harm, and impact financial results.
• Cyberattacks and data/security breaches could seriously harm reputation and business.
• Collection, processing, storage, use, and disclosure of personal data could lead to liabilities due to governmental regulation or conflicting legal requirements.
• Conditions to complete the Potential Business Combination may not be satisfied or may be waived.
• Shareholder approval from DAAQ and Old Glory Bank is required, and there is no guarantee it will be obtained.
• DAAQ Sponsor LLC and affiliated shareholders have agreed to vote in favor of the combination regardless of public shareholder votes.
• DAAQ's Board has potential conflicts of interest in recommending the business combination.
• Future resales of the combined company's shares may cause the market price to drop significantly.
• No assurance that the combined company's stock price will not decline or be subject to significant volatility.
• Exercise of redemption rights by DAAQ's public shareholders could limit the combined company's public float.
• Business uncertainties and contractual restrictions will apply once documentation for the combination is executed.
• DAAQ's due diligence may not have identified all material issues or risks.
• No assurance that the combined company will comply with Nasdaq listing standards or that an active and liquid public market will develop.
• If analysts cease publishing research or change recommendations adversely, the price and trading volume could decline.
• The combined company may be unable to obtain additional financing for operations or growth.
• As an emerging growth company, the combined company may take advantage of certain disclosure exemptions, potentially making securities less attractive.
• Significant transaction costs will be incurred.
• The Sponsor and DAAQ's officers, directors, or affiliates may purchase Class A ordinary shares from public shareholders, reducing public float.

Future Outlook

The combined company plans to integrate crypto into daily banking post-De-SPAC, including a consolidated dashboard for banking and crypto, easy on/off blockchain access, issuing an Old Glory Bank Payment Stablecoin (OGBUSD) under the GENIUS Act, providing Stablecoin as a Service, and offering Liquidity Access Lines. These integrations are subject to regulatory requirements and minimum capital requirements, which are expected to be met upon the consummation of the De-SPAC transaction. Management anticipates that the transaction will address current capital constraints, allowing for continued deposit growth and a potential adjustment of the Tier 1 Leverage Ratio to industry standards (8% or 9% from the current 14%).

Management Comments

• Our team combines deep tradfi and digital-asset expertise to be a long-term partner in creating shareholder value.
• Old Glory Bank's 0.86% cost of funds places the bank among the top-decile performers in funding efficiency in its peer group.
• Consistent quarterly account growth across retail and small business segments is driving higher deposit balances.
• Deposits grew from $149M to $247M over the most recently completed five quarters, with recent growth moderated by capital constraints.
• The implementation of OGBs planned crypto banking integration is subject to regulatory requirements and minimum capital requirements, which such minimum capital requirements being satisfied upon consummation of this De-SPAC.
• Management believes [the Tier 1 Leverage Ratio] will be changed to an industry standard ratio of 8% or 9% upon the successful consummation of this transaction.
• Old Glory Bank is limited in the amount it can loan to a single borrower by the amount of its capital, but this limit will no longer be a market factor upon the consummation of this transaction.

Industry Context

This announcement highlights a growing trend of financial institutions catering to specific ideological or niche markets, such as "America first values" and the crypto economy, which perceive themselves as underserved or "debanked" by traditional institutions. Old Glory Bank's strategy to integrate stablecoin payments and crypto-backed credit positions it at the intersection of traditional banking and the evolving digital asset landscape, aiming to capitalize on the demand for "cancel-proof" financial services and lower-fee, instant settlement payment solutions that bypass traditional networks. The focus on digital-first operations with cloud-enabled infrastructure aligns with broader fintech trends for efficiency and scalability.

Comparison to Industry Standards

• Old Glory Bank's cost of funds at 0.86% for Q3 2025 is stated to be among the top-decile performers in funding efficiency within its peer group (insured commercial banks with assets between $100 million and $300 million, 2 or fewer full-service banking offices, and not located in a metropolitan statistical area).
• The current Tier 1 Leverage Ratio requirement of 14% under the Consent Order is significantly higher than the industry standard Community Bank Leverage Ratio of 9% for banks with less than $10 billion in assets, which management expects to be adjusted post-transaction.
• The bank's current loan portfolio, less than 4% of assets, is notably small compared to typical commercial banks, which usually have a much larger proportion of assets in loans.

Corporate Governance

Legal Proceedings

• Old Glory Bank consented to the issuance of a Consent Order by the FDIC and the Oklahoma State Banking Department (FDIC-24-0016b) on May 1, 2024. This order did not require a fine or penalty, nor did it limit growth if adequately capitalized, but it mandated the adoption, operationalization, and audit of written policies and set a Tier 1 Leverage Ratio of 14%.

Stakeholder Impact

• Shareholders (DAAQ & Old Glory): Potential for dilution due to the business combination. Opportunity for long-term value creation through growth in a niche market and crypto integration. DAAQ's public shareholders face redemption risk.
• Customers (Old Glory Bank): Access to expanded digital banking services, including planned crypto integration, and continued focus on "America first values" and underserved communities. Potential for improved lending capacity post-merger.
• Employees (Old Glory Bank): Potential for growth and expansion of operations.
• Regulatory Authorities (FDIC, OSBD, SEC): Continued oversight, particularly regarding the Consent Order and the planned crypto banking integrations. The business combination requires various regulatory approvals.
• PIPE Investors: Opportunity to invest in a growing digital bank with a unique market position at an attractive entry point.

Next Steps

• DAAQ and Old Glory Bank are expected to prepare a registration statement on Form S-4 to be filed with the SEC by DAAQ.
• DAAQ will distribute preliminary and definitive proxy statements to its shareholders for a vote on the Potential Business Combination.
• The business combination is targeted to close in Q2 2026, subject to satisfaction of customary closing conditions and regulatory/governmental approvals.
• The combined company plans to launch OGBUSD (Old Glory Bank Payment Stablecoin) under the GENIUS Act on ERC 20 Standard.
• The combined company plans to provide Stablecoin as a Service.
• The combined company plans to offer Liquidity Access Lines.

Key Dates

Recommendation

The proposed business combination presents a compelling growth narrative for Old Glory Bank, particularly its rapid deposit growth, efficient funding, and strategic entry into the crypto banking space, catering to an underserved market. The transaction is expected to resolve critical capital constraints and normalize regulatory capital ratios, which are significant positives. However, the company is still in a rapid growth phase with a very small loan portfolio, making its net interest income highly dependent on external factors like Federal Reserve rates. The existence of a regulatory Consent Order, even if policies are satisfied and ratios are expected to normalize, indicates past compliance issues. Furthermore, SPAC mergers inherently carry risks, including potential shareholder redemptions, dilution, and the uncertainty of regulatory approvals and market acceptance of the combined entity's unique value proposition. While the long-term potential is notable, the immediate future involves significant execution risk and regulatory hurdles, suggesting a "hold" position until more clarity emerges on the successful consummation of the merger and the operational integration of its crypto strategy.

Keywords

Digital Asset Acquisition Corp., Old Glory Bank, SPAC merger, Fintech, Digital banking, Crypto banking, Stablecoin, America first values, Financial services, Community banking, FDIC insured, DAAQ, OGBUSD, De-SPAC, Financial technology, Banking services, Investment, SEC filing