Mercantile Bankshares Corp. said yesterday that it has reached a definitive agreement to acquire the Bank of Fruitland in a stock swap valued at $36 million.
The acquisition beefs up Mercantile's presence along the Eastern Shore. Bank of Fruitland has $146 million in assets and operates seven branches, four of them in Salisbury. The bank will be merged into Mercantile's Peninsula Bank, which has 24 offices on Maryland's Eastern Shore.
"This is a nice fill-in to shore up the presence we have through Peninsula Bank," said David E. Borowy, head of investor relations at Baltimore-based Mercantile, Maryland's largest independently owned banking company, with $8 billion in assets.
Peninsula Bank is based in Princess Anne and has $514 million in assets. It is Mercantile's second-largest affiliated bank behind Mercantile-Safe Deposit & Trust Co., which operates in Baltimore and has more than $3.1 billion in assets. Mercantile operates 21 banking affiliates in Maryland, Virginia and Delaware. Mercantile's shares rose 62.5 cents yesterday to close at $34.75.
Directors of both companies approved the deal, which calls for Mercantile to exchange 2.5 shares of its common stock for each share of Fruitland Bank common stock. Fruitland Bank has 440,000 shares outstanding. The transaction is subject to the approval of regulators and Fruitland Bank stockholders, the companies said.