Bay National Bank is selling its branch in Salisbury to Hebron Savings Bank.
The purchase price includes most of the branch’s deposits, and about 36 percent of the branch’s loan portfolio, according to a filing with the Securities and Exchange Commission by Bay National Corp. (NASDAQ: BAYN), which is Bay National Bank’s corporate parent.
Hebron Savings Bank will pay a 3 percent premium above the amount of the branch’s core accounts, which totaled $13.5 million as of March 31, according to the SEC filing. Core deposits include checking and savings accounts, but do not include certificates of deposits sold through brokers, which are likely to move from one bank to another in search of higher rates.
The sale is expected to be completed by Sept. 30, subject to regulatory approval, the two banks said.
Lutherville-based Bay National Bank is under orders from federal bank regulators to boost its capital levels. Its corporate parent posted a loss of $11.7 million, or $5.43 a share, in the fourth quarter, as it increased the amount of money set aside to cover possible losses in its loan portfolio. Bay National Corp. is also facing a possible delisting of its shares from the NASDAQ stock market, the company said in a recent regulatory filing.
Bay National Bank has assets of $292.9 million, as of Dec. 31., according to the Federal Deposit Insurance Corp.
Hebron Savings Bank, which operates 10 branches in Wicomico, Dorchester and Somerset counties, is $450 million in size.
“Bay National Bank’s excellent customer base was a significant attraction to our company in considering this transaction,” Gregory W. Johnson, Hebron Savings Bank’s CEO, said in a press release announcing the deal. “We are extremely pleased to welcome the customers of Bay National Bank to Hebron Savings Bank, and we feel privileged to have the opportunity to support their financial needs.”