Carrollton Bancorp (CRRB), Jefferson Bancorp to Merge in $25M Deal
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Jefferson Bancorp, Inc., parent company for Bay Bank, FSB and Carrollton Bancorp (Nasdaq: CRRB), parent company for Carrollton Bank, today announced the execution of a definitive agreement for merger of Jefferson Bancorp, Inc., and Carrollton Bancorp (“Carrollton”). The subsidiary banks, Bay Bank, FSB and Carrollton Bank will also merge, with Bay Bank, FSB being the surviving entity. The transaction is currently valued at approximately $25 million in stock and cash, representing $15.4 million in consideration to Carrollton shareholders and repayment of $9.1 million in TARP funding to the US Treasury. The transaction will combine the strengths of the two organizations in the Maryland market with a combined 12 bank branches in the Baltimore/Washington market.
On a pro forma consolidated basis, the new Carrollton will have approximately $472.3 million in total assets, $382.8 million in gross loans, and $412.9 million in total deposits, after purchase accounting adjustments. The combined bank will have tangible common equity in excess of 10% and reduced levels of non-performing assets relative to capital as compared to Carrollton on a stand-alone basis. Furthermore, the revenue synergies and cost savings in the transaction are expected to demonstrably improve profitability and return on capital as compared to Carrollton on a stand-alone basis. The new Carrollton Board of Directors will consist of six existing Jefferson directors and three directors from the legacy Carrollton Board.
The transaction, which has been approved by both Carrollton’s and Jefferson’s boards of directors, is expected to close in the third quarter of 2012. The transaction is subject to certain customary conditions, including the approval by Carrollton’s shareholders and regulatory approvals.
Monocacy Financial Advisors, LLC acted as financial advisor to Carrollton and K&L Gates is acting as Carrollton’s legal counsel. Arnold & Porter LLP is acting as legal counsel to Jefferson.
On a pro forma consolidated basis, the new Carrollton will have approximately $472.3 million in total assets, $382.8 million in gross loans, and $412.9 million in total deposits, after purchase accounting adjustments. The combined bank will have tangible common equity in excess of 10% and reduced levels of non-performing assets relative to capital as compared to Carrollton on a stand-alone basis. Furthermore, the revenue synergies and cost savings in the transaction are expected to demonstrably improve profitability and return on capital as compared to Carrollton on a stand-alone basis. The new Carrollton Board of Directors will consist of six existing Jefferson directors and three directors from the legacy Carrollton Board.
The transaction, which has been approved by both Carrollton’s and Jefferson’s boards of directors, is expected to close in the third quarter of 2012. The transaction is subject to certain customary conditions, including the approval by Carrollton’s shareholders and regulatory approvals.
Monocacy Financial Advisors, LLC acted as financial advisor to Carrollton and K&L Gates is acting as Carrollton’s legal counsel. Arnold & Porter LLP is acting as legal counsel to Jefferson.
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