Dive Brief:

• Camp Hill, Pennsylvania-based LinkBank has agreed to buy Salisbury, Maryland-based $1.7 billion-asset Partners Bancorp in an all-stock deal worth roughly $167.8 million, the companies said last week.
• The transaction, expected to close in the third quarter, comes three months after Partners and Red Bank, New Jersey-based OceanFirst Financial terminated a planned merger, valued at $186 million, citing regulatory delays.
• The combined company will have roughly $2.8 billion in assets, $2.2 billion in loans and $2.3 billion in deposits and position LinkBank to extend its footprint into Delaware, Maryland, New Jersey and Virginia, the Pennsylvania-based bank said.  

Dive Insight:

In a quick turnaround, Partners found its buyer in LinkBank at a slightly lower price than its 2021 valuation with OceanFirst.

The merger will add 21 branches to $1.2 billion-asset LinkBank’s presence. The combined bank will operate under the LinkBank name, the statement said.

Termed a “merger of equals,” the combined company will be based in Camp Hill, but will have major operations in Salisbury and Fredericksburg, Virginia.

John W. Breda, Partners’ CEO, will serve as head of the combined company’s Delmarva market unit, according to the banks’ statement.

“This is an exciting combination that accelerates our strategic objectives to create the leading community bank headquartered in the Mid-Atlantic markets,” Breda said. “Our combined size and resources will significantly enhance our scale and ability to help customers through higher lending limits and greater investment in technology, and will increase career opportunities for employees.”

LinkBank estimates it will save $13.8 million before tax through the deal. About half of that will be realized by the end of 2023, the company told Banking Dive in an email.  

Andrew Samuel, LinkBank’s CEO, will serve as chief executive of the combined entity, and the company’s 22-member board of directors will comprise 12 from LinkBank and 10 from Partners.

Joseph C. Michetti Jr., LinkBank’s chairman, will serve as chairman of the combined company. Partners’ chair, Jeffery F. Turner, will be vice chairman.

“We have a high hurdle for M&A,” Samuel told American Banker last week, noting the transaction will place LinkBank in major markets such as the Washington, D.C., metro area and Baltimore.

The merger comes during a lull in bank deals. Just six were announced in January in the U.S., according to S&P Global Market Intelligence data. That is the lowest monthly number since the COVID-19 pandemic gathered steam in 2020.

Samuel, however, remained optimistic. LinkBank has almost doubled its size over the past 18 months under his leadership, according to American Banker.

“This is a transformational partnership that will enhance what both banks are able to do for our team members, clients, investors and communities, while driving significant value for our shareholders,” Samuel said. “This merger significantly accelerates each entity’s size, profitability, and operating leverage.”

Partners’ low-cost deposit base and its experienced commercial lending teams in the market were among its selling points, LinkBank said.

LinkBank said it anticipates some branch consolidations in the future but has not identified those yet.

Partners shareholders will receive 1.15 shares of LinkBank stock for every Partners share they own, according to the banks’ statement. Once the transaction is complete, Partners shareholders will own about 56% of the combined company, and LinkBank shareholders, 44%.

The deal’s $167.8 million value derives from LinkBank’s 10-day volume-weighted average price of $8.08 as of Feb. 21.