Arrival in the Maryland capital. Next stops, Baltimore and Washington.

F.N.B. Corp. (FNB) in Hermitage, Pa., said late Monday it had agreed to buy Annapolis Bancorp (ANNB), which owns the Bank of Annapolis, for $51 million in stock.

The deal would provide the $12 billion-asset F.N.B.  an entrée into Maryland and position it for further expansion in the Middle Atlantic region.

"The favorable demographics and long-term growth potential of Annapolis Bancorp's core markets, as well as additional opportunities in the greater Baltimore and Washington, D.C., areas, provide a compelling platform to leverage our successful business model," Vincent J. Delie Jr., the chief executive of F.N.B., said in a press release.

F.N.B. has branches in Pennsylvania, Ohio and West Virginia. It also has consumer finance offices in Kentucky and Tennessee.

F.N.B. has been growing. It acquired Parkvale Financial in Monroeville, Pa., in January and Comm Bancorp in Clarks Summit, Pa., a year earlier. Delie succeeded Stephen Gurgovits as chief executive in January. 

Annapolis Bancorp has $437 million in assets, $343 million in deposits and eight branches in Anne Arundel and Queen Anne's counties.

F.N.B. expects to complete the acquisition in April, pending approval from regulators and Annapolis Bancorp’s shareholders.

Annapolis Bancorp would repay the Treasury Department the $4.1 million it still owes under the Troubled Asset Relief Program before the merger is complete, or it would be paid off as part of the closing. The company received $8.2 million under Tarp in January 2009, repaying half of it in April this year.

Under the terms of the merger agreement, Annapolis Bancorp shareholders would receive 1.143 shares of F.N.B. common stock for each of their shares – equal to $12.09 a share. The exchange ratio is fixed, and the transaction is expected to qualify as a tax-free exchange, the press release said. The deal includes an incentive provision: F.N.B would pay an additional 36 cents a share if Annapolis Bancorp is able to “resolve an agreed-upon credit matter.”

RBC Capital Markets advised F.N.B., and Sandler O’Neill and Partners advised Annapolis Bancorp. Reed Smith was F.N.B’s legal counsel, and Patton Boggs LLP was the law firm for Annapolis Bancorp, the release said.

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