Maryland bank holding firms Community Financial, Shore Bancshares to merge

The Community Financial Corporation (TCFC), the holding company of Community Bank of the Chesapeake, will merge with and into Shore Bancshares, the holding company of Shore United Bank, in an all-stock deal valued at around $254.4 million.

The transaction between the two Nasdaq-listed firms is expected to create a bank holding company with around $6 billion in assets and a market capitalization of about $650 million.

The combined company will be named Shore Bancshares, Inc. while the combined bank will run under the Shore United Bank, N.A. name.

Under the terms of the agreement, The Community Financial Corporation common shareholders are entitled to 2.3287 shares of Shore Bancshares common stock. Current Shore Bancshares shareholders and The Community Financial Corporation shareholders will own around 60% and 40%, respectively, of the outstanding shares of the combined business.

The new entity with over 40 branches is expected to have a commanding market share in Maryland markets and an increasing presence in Delaware and Virginia.

Lloyd L Beatty — Shore Bancshares President and CEO said: “This combination creates a solid and very promising future for the combined organization.

“We are bringing together two well-known financial services brands that focus on providing remarkable client experiences, helping individuals and businesses reach their financial goals.

“The shareholders of Shore and TCFC should benefit from the pro forma profitability metrics that should continue to drive shareholder value.”

Piper Sandler & Co. acted as financial advisor to The Community Financial Corporation while Keefe, Bruyette & Woods, A Stifel Company served as financial advisor to Shore Bancshares.

Kilpatrick Townsend & Stockton and Holland & Knight acted as legal counsels to The Community Financial Corporation and Shore Bancshares, respectively.

Anticipated to close late in the second quarter or early in the third quarter of 2023, the merger deal is subject to regulatory approvals, Shore Bancshares and The Community Financial Corporation’s shareholders’ approval, and customary closing conditions.