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Three banks slated to merge in Maryland

Maryland's Carrollton Bancorp has announced that it agreed to a proposed merger with Jefferson Bancorp. Carrollton Bancorp is the parent company for Carrollton Bank while Jefferson Bancorp owns FSB and Bay Bank.

Under the deal's sales terms, the three subsidiary banks will all merge, with the remaining entity being henceforth known as Bay Bank, FSB. Carrollton Bancorp with be the surviving holding company. Together, the two companies operate 12 bank branches in Maryland and surrounding areas.

According to the company, the estimated $25 million deal will take the form of a tax-free reorganization. The valuation of the merger represents $9.1 million in repayment in to the U.S. Treasury's Troubled Asset Relief Program and $15.4 million in consideration to shareholders with Carrollton.

Following the deal, Carrollton Bank's current CEO and president will become an Executive Vice President at the new company, making him responsible for overseeing the operation of much of the bank's "core businesses." The Board of Directors for the new bank will be composed of three directors from the previous Carrollton Board and six officials currently serving on Jefferson Bancorp's Board of Directors.

Before the proposed merger is finalized, the deal must be approved by Carrollton's shareholders and specific government regulatory agencies. It has already been approved by the boards of directors for both Carrollton Bancorp and Jefferson Bancorp. Assuming all needed approval is obtained in a timely manner; officials with the banks expect the deal to close in the third quarter of 2012.

Bay Bank's chairman issued a statement regarding news of the merger. He said, "It represents the execution of our state strategy to be opportunistic in our growth through mergers with like-minded Maryland banks." He continued, "We believe that our access to capital when couple with our highly experienced management team will allow us to grow to the scale necessary to meet the needs of our customers on a full service basis."

Source: RTT News, "Carrollton Bancorp Agrees to Merge With Jefferson Bancorp -- Quick Facts," April 9, 2012

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