Shore Bancshares in Easton, Md., has agreed to buy Community Financial in Waldorf, Md.
The $3.4 billion-asset Shore said in a press release that it will pay $254.4 million in stock for the $2.4 billion-asset parent of Community Bank of the Chesapeake. Shore shareholders will own 60% of the combined company.
The deal is expected to close in the second or third quarter.
Community Financial has 12 branches, four loan production offices, $1.7 billion of loans and $2.1 billion of deposits.
The transaction is expected to be more 40% accretive to Shore’s 2024 earnings per share. It will take a little more than two years to earn back a projected 13.9% dilution to Shore’s tangible book value.
The acquisition “creates a solid and very promising future for the combined organization,” Scott Beatty, Shore’s president and CEO, said in the release.
“We are bringing together two well-known financial services brands that focus on providing remarkable client experiences, helping individuals and businesses reach their financial goals,” Beatty added. “The combined bank will remain committed to our employees and the relationships that they have developed over decades of serving our communities.”
Jimmy Burke, Community Financial’s president and CEO, will serve as Shore’s president and CEO. Austin Slater Jr., Community Financial’s chairman, will become vice chairman. Eight Community Financial directors will join Shore’s board.
Shore expects to incur $16 million of merger-related expenses. It plans to cut about 11% of the combined bank’s noninterest expenses.
Piper Sandler and Kilpatrick Townsend & Stockton advised Community Financial. Keefe, Bruyette & Woods and Holland & Knight advised Shore.