Frederick-based F&M; Bancorp, parent of Farmers & Mechanics National Bank, agreed yesterday to buy Monocacy Bancshares Inc. for 2.22 million shares of stock as F&M; expands in Maryland.

F&M;, which has total assets of about $1.07 billion, is acquiring Taneytown-based Monocacy, parent company of Taneytown Bank & Trust, to move into a contiguous region of the state.

Monocacy has 11 community bank branches and assets of $294 million.

The final price of the transaction will be between $76.4 million and $103.4 million, depending on the price of F&M; stock. Based on yesterday's closing price, the purchase price is $82.7 million.

F&M; said the transaction should close late this year or early next year, and it expects the merger to add to earnings by the end of 1999.

F&M; has been building its franchise with acquisitions of Hagerstown-based Keller-Stonebraker Insurance Inc. this year, and Home Federal Savings Bank of Hagerstown in November 1996.

F&M;'s stock fell $1.75 to $35.50. Monocacy last traded Thursday at $32 a share.

Pub Date: 9/05/98