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Maryland banks to merge, pending approval by shareholders

Sandy Springs Bancorp, the largest bank based in Maryland, has announced plans to purchase CommerceFirst, a company also based in Maryland. While CommerceFirst is significantly smaller than Sandy Springs, it is well-known for offering commercial loans to small businesses, all of which are guaranteed by the U.S. Small Business Administration (SBA). Under the SBA's loan program, the bank was among Maryland's most active between 2010 and 2011.

According to the currently proposed sales terms, current CommerceFirst shareholders will have various options regarding how they wish to be paid. Each shareholder may choose between 0.8043 Sandy Springs shares or $13.60 in cash for each CommerceFirst share he or she owns. Shareholders will also be able to opt for a combination of stock and cash. The sales price of $13.60 represents a premium on CommerceFirst's current share price of $7.75.

In purchasing the smaller bank, Sandy Spring is set to acquire around $180 million in deposits, $181 million in loans and $205 million in assets. Before the merger, Sandy Springs had approximately $3.6 billion in total assets. Sandy Springs will add CommerceFirst's five branches to its 43 existing locations, most of which are found in Maryland.

The merger has already been approved by the executives of both banks. Before it can be finalized, it must be approved by shareholders from each company and pass a review conducted by Maryland banking regulators. The banks' plan is to complete the deal by the second quarter of 2012.

Other Maryland banks are reportedly considering acquisitions. Howard Bancorp has expressed interest in selling $5 million in stock, with the proceeds to be used to fund unspecified acquisitions. Meanwhile, Bay Bank hopes to have purchased a smaller bank by the end of 2012.

Source: Baltimore Business Journal, "Sandy Springs Bank to buy CommerceFirst in $25.4M deal," Gary Haver, Dec. 20, 2011

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