Sandy Spring Bancorp and CommerceFirst Bancorp, of Annapolis, have announced the execution of a definitive merger agreement. It calls for Sandy Spring to acquire CommerceFirst and its wholly-owned subsidiary, CommerceFirst Bank, in a transaction valued at approximately $25.4 million in stock and cash.
Sandy Spring’s acquisition of CommerceFirst will add approximately $205 million in total assets, $181 million in gross loans and $180 million in total deposits, before purchase accounting adjustments. It will also expand Sandy Spring’s presence in Anne Arundel, Howard and Prince George’s counties in central Maryland, where CommerceFirst Bank operates five full service branches.
Under the terms of the agreement, Sandy Spring will acquire all of the shares of CommerceFirst common stock for a combination of 50% Sandy Spring common stock and 50% cash. The stock consideration will be at a fixed exchange ratio of 0.8043 Sandy Spring shares for each CommerceFirst share and the cash consideration will be $13.60 per share, in each case subject to possible adjustment.
The aggregate merger consideration will consist of approximately 732,000 shares of Sandy Spring common stock and $12.4 million in cash. CommerceFirst shareholders will be permitted to elect Sandy Spring common stock or cash, or a combination of each; subject to proration procedures to preserve the aggregate 50% stock and 50% cash consideration mix.
“CommerceFirst has done an excellent job of effectively serving small and mid-sized businesses, a prime market segment for Sandy Spring. In particular, they are a recognized leader in local SBA lending, and we look forward to adding these strengths to our own,” said Daniel Schrider, president and CEO of Sandy Spring Bancorp. CommerceFirst’s president and CEO, Rick Morgan, will join Sandy Spring as market president for the greater Annapolis region and will help build upon both banks’ presence in the Prince George’s County market.
“We are thrilled to have someone of Rick’s reputation on our team to lead the newly combined market,” said Schrider. “His business acumen and expertise in small business lending will benefit us greatly as we grow our franchise and gain market share.”
The transaction, which has been approved by both CommerceFirst’s and Sandy Spring’s board of directors, is expected to close in the second quarter of 2012.