Mercantile Bankshares Corp. continued yesterday to add to its system of community banks by announcing an agreement to buy the Sparks State Bank, a five-branch Baltimore County operation with nearly $190 million in assets.
Mercantile, parent of the Mercantile-Safe Deposit & Trust Co. and 20 other banking units, has agreed to pay 2.33 shares for each of the 771,300 shares of Sparks that will be outstanding after Dec. 31. That is when Sparks plans to pay a 20 percent stock dividend to its shareholders.
At Mercantile's closing stock price yesterday of $19.125 a share, the deal would be worth about $34 million, or about 1.7 times Sparks' book value, which is roughly the value of its assets minus its liabilities.
"Mercantile has a long history of permitting its banking affiliates to operate in the best interest of the communities they serve, while offering to those communities the advantages which are derived from affiliation with a much larger banking organization," Sparks Chairman Charles E. Ensor Sr. said in a statement.
Last month, Mercantile, with $5.6 billion in assets, completed the $42 million purchase of Fredericksburg National Bancorp Inc., a Fredericksburg, Va., banking company with seven branches and million in assets.