Rosedale Federal Savings & Loan Association said Friday it will acquire the Baltimore-based parent of Chesapeake Bank of Maryland in a $64.4 million cash deal.
The merger agreement, approved by both companies’ boards, would give stockholders of CBM Bancorp, Chesapeake Bank’s holding company, $17.75 in cash for each share of CBM Bancorp common stock they own.
The merger will give Perry Hall-based Rosedale Federal, founded more than a century ago, additional size and scale and a larger footprint for growth, said Kevin Benson, the bank’s president and CEO, in an announcement Friday.
“Evaluating opportunities in our marketplace has been part of our strategic plan for some time; now we have the opportunity to seize on an interesting time for local banks,” Benson said.
Benson said the two banks align in terms of mortgage lending, deposits and branch locations.
Facing local banking consolidation and other industry headwinds, “it was the right time for us to consider a partner,” said Joseph Solomon, president of CBM Bancorp. “We both have a rich history in the Baltimore area.”
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Baltimore’s largest locally based bank, Howard Bank, agreed in July to be absorbed by F.N.B. Corp., the parent of First National Bank of Pennsylvania, in a deal valued at $418 million. That deal expanded Pittsburgh-based FNB’s foothold in the Baltimore market, which began with its 2012 acquisition of BankAnnapolis and 2014 deal for Baltimore County Savings Bank.
Solomon said Chesapeake Bank’s customers will benefit from Rosedale’s scope of services, community commitment and larger banking network.
CBM’s directors and executive officers have agreed to vote their shares in favor of the merger, which requires regulatory and stockholder approval and is expected to close during the first half of the year.
The deal will expand Rosedale Federal’s Maryland footprint.
The locally run, independent mutual savings and loan bank has 10 branches in Baltimore and Baltimore and Harford counties. Locations include Overlea, Perry Hall, White Marsh, Abingdon, Forest Hill, Bel Air, Rosedale, Dundalk and Towson, with another planned for Timonium.
Chesapeake Bank, a federally chartered stock savings association, got its start in 1913 as the New Eastern Avenue Permanent Savings and Loan Association. It has operated as a community-oriented bank offering loan and deposit products. It operates three branches, in Arbutus, Bel Air and Pasadena, with a corporate office in Carney in Baltimore County.
The bank operates by taking deposits from customers in its market area and using those funds and funds from operations and borrowings to originate loans secured by residential and nonresidential real estate.