Shore Bancshares in Easton, Md., has agreed to buy Severn Bancorp in Annapolis, Md.
The $1.9 billion-asset Shore said in a press release Wednesday that it will pay $146 million in cash and stock for the $953 million-asset Severn. The deal, which is expected to close in the third quarter, priced Seven at 126.2% of its tangible book value.
Severn has seven branches, $679 million of loans and $807 million of deposits.
“We will now have a presence in Anne Arundel County which is a wonderful market and fills in a gap in our footprint,” Scott Beatty, Shore’s president and CEO, said in the release. “The merger also brings new products and talent to our organization.”
Shore said it expects the deal will be more than 30% accretive to its 2022 earnings per share, including plans to cut about 35% of Severn’s annual noninterest expenses.
Shore said it should take less than four years to earn back any dilution to its tangible book value. The company said it expects to incur $8.3 million in merger-related expenses.
Alan Hyatt, Severn’s president and CEO, will become Shore’s chairman. Three other Severn directors will join Shore’s board.
Janney Montgomery Scott and Holland & Knight advised Shore. Piper Sandler and Luse Gorman advised Severn.
