Old Line Bancshares in Bowie, Md., has agreed to buy Bay Bancorp in Columbia, Md.
The $2.1 billion-asset Old Line said in a press release Wednesday that it will pay $129 million in stock for the $646 million-asset Bay. The deal, which is expected to be completed in the second quarter, priced Bay at 191.9% of its tangible book value.
Old Line said it expects the deal to be immediately accretive to its earnings, excluding $9 million in total merger-related expenses. It should take less than two years to earn back any dilution to Old Line’s tangible book value.
“This partnership expands and strengthens our presence in the Baltimore market following on our initial entry in December 2015,” James Cornelsen, Old Line’s president and CEO, said in the release. “We look forward to building a strong and lasting partnership that will make Old Line … the premier bank in the Baltimore-Washington corridor.”
Old Line plans to cut $9.6 million in annual expenses as part of the deal, closing at least three branches.
Joseph Thomas, Bay’s president and CEO, and director Eric Hovde will join Old Line’s board. Another Bay director is expected to join them.
FIG Partners and Baker, Donelson, Bearman, Caldwell & Berkowitz advised Old Line. Hovde Group and Gordon Feinblatt advised Bay, while RP Financial provided a fairness opinion.
Old Line recently bought DCB Bancshares in Damascus, Md., for $41 million. Bay would be its fifth bank acquisition since 2011.