Mason-Dixon Bancshares Acquires Sterling Bancorp in Multi-Million Dollar Deal

Mason-Dixon Bancshares, Inc., the parent company of Carroll County Bank and Trust Company, Bank of Maryland, and Rose Shanis Financial Services, LLC, has announced its agreement to acquire Baltimore-based Sterling Bancorp in a cash transaction worth $10.294 million. This acquisition marks a significant step towards Mason-Dixon's plan to focus its resources in its core market following the divestiture of its Eastern Shore branch by Bank of Maryland earlier this year. The deal, subject to regulatory approval and stockholder approval, is expected to close by December 31, 1998.

Key Takeaways:

• Mason-Dixon will pay $10.294 million in cash for all outstanding common shares of Sterling Bancorp and cancel all outstanding warrants and options.
• The acquisition is expected to result in cost savings of approximately $2 million, or 66% of Sterling Bancorp's 1998 projected general and administrative expenses.
• The merger of Sterling Bank and Trust Co. into Bank of Maryland is expected to be completed by mid-first quarter of 1999.
• Mason-Dixon expects to take an after-tax charge of approximately $400,000 for acquisition and merger-related expenses during the fourth quarter of 1998.
• The transaction is expected to begin being accretive to Mason-Dixon's earnings per share beginning with the second quarter of 1999.
• Sterling Bank and Trust Co. has branch locations in Baltimore City, Annapolis, Pikesville, and Timonium, with assets totaling $70 million.
• The acquisition will result in the consolidation of Sterling's Pikesville and Baltimore City branches into nearby Bank of Maryland branches, while retaining the Annapolis and Timonium branches.

Statistics:

• Total value of the transaction: $10,294,218
• Cost savings expected: approximately $2,000,000
• After-tax charge for acquisition and merger-related expenses: approximately $400,000
• Number of branches to be consolidated: 2
• Number of branches to be retained: 2
• Assets of Sterling Bank and Trust Co.: $70,000,000
• Number of banking offices operated by Mason-Dixon Bancshares: 19
• Number of consumer finance offices operated by Mason-Dixon Bancshares: 12
• Assets of Mason-Dixon Bancshares: approximately $1.1 billion

Sources:

• Mason-Dixon Bancshares, Inc. press release, October 16, 1998
• The Private Securities Litigation Reform Act of 1995
• Information available publicly regarding Mason-Dixon Bancshares and Sterling Bancorp at the time of the acquisition announcement.