Atlanfed Bancorp Inc. of Baltimore has signed a letter of inten to pay $3.8 million for Capital Bankshares Inc., the Timonium parent of Capital Savings Bank.
Atlanfed, parent of Atlantic Federal Savings Bank, will pay $13.50 a share for Capital's more than 281,000 shares, according to Michael P. Gavin, president of Atlantic Federal and executive vice president of Atlanfed.
Capital has four branches in the Baltimore area and about $62 million in assets, according to Mr. Gavin. The company earned $484,000 in the fiscal year that ended June 30.
"We're acquisition-minded," Mr. Gavin explained. "They have a couple markets we haven't served, and they're in markets we do serve, so it increases market share."
Mr. Gavin said Capital's chairman, president and chief executive, Michael Glenn, would become vice president of Atlantic Federal. The companies haven't examined in detail how many employees, if any, would be affected by a merger, Mr. Gavin said.
Atlanfed, with $244 million in assets, has seven branches in the Baltimore area, two offices in Elkton and one in Hagerstown. The company earned $993,000 in the six months ended Sept. 30.
Mr. Gavin said a definitive agreement was being negotiated and that he expected it to be finished within three weeks. Both companies' boards of directors have OK'd the deal, but approval must be obtained from the federal Office of Thrift Supervision, the Securities and Exchange Commission and Capital's shareholders.