McLean banking company Cardinal Financial Corp. sold more than $37 million worth of company shares last week in its second stock offering since going public in 1998.
“These funds will carry us for a while,” said Robert Cern, chief financial officer and executive vice president of Cardinal Financial.
Mr. Cern said the money will be used for additional branches and general corporate purposes, though he would not say how or when that expansion would take place.
The parent company for Cardinal Bank, which has 19 branches in Northern Virginia and Fredericksburg, netted $41.7 million from its first common stock sale in December 2003.
Cardinal Financial earlier this month said it will buy Wilson/Bennett Capital Management Inc., an Alexandria asset management firm, for $6.6 million in cash and stock. The transaction is expected to be completed in about two months.
Company shares closed at $8.84 yesterday on the Nasdaq Stock Market,up slightly from a week earlier at $8.80.
Analyst Matthew Schultheis predicted that Cardinal Financial will continue focusing on increasing its bank business this year, with overall banking loans expected to rise by 25 percent to 30 percent in 2005.
By 2006, that growth likely will slow down and Cardinal Financial will shift its focus to operations and maintaining its expanded presence, said Mr. Schultheis with Washington investment bank Ferris, Baker Watts Inc.
Cardinal Financial’s total assets shot up 83 percent in the first quarter ended March 31 to $1.27 billion from $693.5 million in the 2004 comparable quarter.
Profits for the recent quarter more than doubled to $1.6 million (9 cents per diluted share) from $719,000 (4 cents) a year earlier. Diluted earnings include the value of convertible warrants and stock options.
Mr. Schultheis, who rated the stock as “neutral,” said his main concern with Cardinal Financial was its residential mortgage lending company, George Mason Mortgage LLC.
“If there is a hiccup in [George Mason Mortgage’s] operations or in the mortgage market, that could have a big effect on Cardinal’s operations for a period of time,” he said.
The subsidiary, which was credited for increasing sales and loans, brought in two-thirds of the income for the quarter, the company said. Cardinal Financial bought George Mason Mortgage for $17 million from Charleston, W.Va., banking company United Bankshares Inc. last July.
Mr. Schultheis does not own any Cardinal Financial stock but Ferris, Baker Watts has a business interest in the company.
Baltimore brokerage firm Legg Mason Wood Walker Inc. projected in January that Cardinal Financial would emerge as a dominant bank in the Washington metropolitan area.
Legg Mason analyst Bryce Rowe, who rated the company as a “buy,” would not discuss Cardinal Financial, citing a “quiet period.” Mr. Rowe does not own any stock, but Legg Mason was a co-underwriter for the recent stock sale.