The parent companies of Bay Bank and Carrollton
Bank said Monday that they planned to merge in a deal worth nearly $25 million in cash and stock.
Jefferson Bancorp Inc., the Lutherville-based owner of Bay Bank, will pay $15.4 million to Carrollton Bancorp
shareholders. It will also repay $9.1 million in Troubled Asset Relief Program funding to the U.S. Treasury.
Jefferson Bancorp formed Bay Bank after buying the assets and liabilities of Bay National
Bank, which failed two years ago and was taken over by regulators. A private equity fund, advised and managed by Hovde Private Equity Advisors LLC, invested $26 million in Jefferson to relaunch Bay Bank in 2010 and will invest $11 million for the Carrollton transaction.
"This is a good sign," said Mark Kaufman, Maryland's commissioner of financial regulation. "Bay [National] was a bank failure. [Private equity investors are] putting more money in to try to make it grow further."
Bay has assets of $130 million and two locations. Carrollton Bank, based in Columbia, has 10 locations and $365 million in assets. The two holding companies will merge under Carrollton Bancorp, while the banks will operate as Bay Bank. The deal is expected to close in the third quarter of this year.
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An earlier version of this story misstated the name the banks will operate under. The Sun regrets the error.
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