Mason-Dixon Bancshares Corp. said yesterday that it has signed a letter of intent to acquire Bank Maryland Corp. of Towson.
Mason-Dixon, parent of Carroll County Bank and Trust Co., will pay $11.8 million in cash and give Bank Maryland shareholders 278,000 shares of Mason-Dixon stock, said company President Thomas K. Ferguson. The overall value of the deal is $26.3 million, or $13 per share of Bank Maryland stock.
Mr. Ferguson said the deal is expected to close by June 30, 1995, pending approval from stockholders and regulators.
Mr. Ferguson said his company saw two things in Bank Maryland that led to talks that began in August. First, Bank Maryland's presence at 11 branches in nine Maryland counties broadened the franchise of Carroll County Bank and Trust, which has 10 branches in Carroll County and one in Ellicott City. And, he said, Bank Maryland has strengths that Carroll County Bank and Trust can't currently match in small business lending.
"We're general practitioners," said Mr. Ferguson, whose bank's $500 million in assets is more than double the $191 million Bank Maryland manages. "We have a mix of residential mortgages, consumer [loans], and commercial, primarily commercial real estate."
He added that aligning with Carroll County will let Bank Maryland enter businesses where it has little or no presence, such as mortgage servicing and trust services.
Bank Maryland Chief Executive David Shumpert couldn't be reached after yesterday's late-afternoon announcement. In a written statement, he said the merger gives "the communities we serve a strong banking alternative to the large regional and national banks that have entered our state."
Mr. Ferguson said Bank Maryland will continue to operate independently of Carroll County Bank and Trust, with both banks reporting to Mason-Dixon, the holding company. He said Bank Maryland's managers are expected to remain.
Bank executives locally have thought Bank Maryland to be for sale for several months. Edwin F. Hale Sr., the Baltimore trucking entrepreneur who will step down as chief executive of Baltimore Bancorp when First Fidelity Bancorp. of Lawrenceville, N.J., completes its acquisition of that company, said in August that he had unsuccessfully tried to negotiate a deal to buy a 20 percent interest in the company. He said talks broke down over price.
Indeed, Bank Maryland stock traded over $14 a share when Mr. Hale was still in talks about buying the stake. Mr. Ferguson said his negotiations with Bank Maryland began in earnest during the third week in August, the same week Mr. Hale said publicly that his talks with Bank Maryland Chairman H.F. "Bert" Criste had broken off.