WesBanco, Inc. (Nasdaq:WSBC) and Old Line Bancshares, Inc. (Nasdaq:OLBK) jointly announced today that they have executed a definitive Agreement and Plan of Merger providing for the merger of Old Line with and into WesBanco. Christopher V. Criss, Chairman of the Board, and Todd F. Clossin, President and Chief Executive Officer, of WesBanco and Craig E. Clark, Chairman of the Board, and James W. Cornelsen, President and Chief Executive Officer, of Old Line, made the joint announcement.
Under the terms of the Agreement and Plan of Merger, which has been approved by the board of directors of both companies, WesBanco will exchange shares of its common stock for all of the outstanding shares of Old Line common stock, in an all-stock transaction. Old Line stockholders will be entitled to receive 0.7844 of a share of WesBanco common stock for each share of Old Line common stock they own upon the effective time of the merger, for an aggregate merger consideration valued at approximately $500 million, or $29.22 per share, based on WesBanco's closing stock price of $37.25 as of July 22, 2019. The transaction values Old Line at a price to June 30, 2019 tangible book value per share of 177.0%, and a price to mean analyst estimated 2019 earnings per share of 13.4 times. The merger is expected to qualify as a tax-free reorganization.
Todd F. Clossin, President and Chief Executive Officer of WesBanco, stated, "We are pleased to welcome the customers and employees of Old Line to the WesBanco family. This is an exciting time in the measured and thoughtful evolution and strategic diversification of WesBanco. The merger with Old Line is an example of the continued solid execution on our long-term growth strategies, as it brings together two high-quality institutions with disciplined risk cultures and a strong customer focus. During the last three years, we have significantly diversified our institution into new, high-growth markets with great demographics that will now span six states across the Midwest, Mid-South, and, now, the Mid-Atlantic region as a top ten financial institution in the state of Maryland. WesBanco prides itself on delivering large bank capabilities with a community bank feel, which is one of the key reasons we were recently named the #7 best bank in America by Forbes magazine. We look forward to providing our newest markets and customers with a broader array of banking services, including expanded commercial and mortgage lending capabilities, as well as trust and wealth management services."
Excluding certain merger-related charges, the transaction is anticipated to be 4.3% accretive to earnings in 2020, and 6.2% accretive to earnings in 2021, once anticipated cost savings of approximately 31% are phased-in fully. Estimated tangible book value dilution at closing of 3.8% is expected to be earned back in approximately 3.3 years using the "cross-over" method, including estimated pre-tax merger-related charges of approximately $30 million. The acquisition is subject to the approvals of the appropriate regulatory authorities and approvals by the shareholders of both WesBanco and Old Line. It is expected that the transaction should be completed during the next two to three quarters.
Upon completion of the merger, WesBanco will add two Old Line directors, anticipated to be James W. Cornelsen and Gregory S. Proctor, Jr., to its board of directors, with other current Old Line directors comprising an Advisory Board for the Mid-Atlantic Market, led by Mr. Cornelsen. In addition, Mark A. Semanie, Old Line's current Executive Vice President and Chief Operating Officer, will join WesBanco as Market President of the Mid-Atlantic Market.
"We are excited to announce our merger with WesBanco and become an integral part of its nearly 150 year history as a community bank," said Mr. Cornelsen. "WesBanco's strong track record of operating performance, merger success, and customer-centric focus makes them the ideal partner for Old Line. The combination of our two strong institutions will provide additional high quality products and services for our customers, as well as growth opportunities for our employees. In addition, I look forward to continuing my relationship as a member of the WesBanco Board of Directors and as Chairman of the Mid-Atlantic Market for WesBanco to help ensure a smooth transition in the local market."
At June 30, 2019, WesBanco had consolidated assets of approximately $12.5 billion, deposits of $8.7 billion, loans of $7.7 billion, and shareholders' equity of $2.1 billion.
At June 30, 2019, Old Line had consolidated assets of approximately $3.1 billion, deposits of $2.4 billion, loans of $2.4 billion, and shareholders' equity of $0.4 billion.
When the transaction is consummated, WesBanco will have approximately $15.6 billion in total assets and will provide banking and financial services through 236 financial centers in six states. The transaction will expand WesBanco's franchise by 37 offices located throughout Maryland, primarily in the Washington D.C. and Baltimore, MD MSAs.
As a condition to WesBanco's willingness to enter into the Merger Agreement, all of the directors and all of the executive officers of Old Line have entered into voting agreements with WesBanco pursuant to which they have agreed to vote their shares in favor of the merger. The anticipated two to three quarter time period leading to the consummation of the merger has officials of both organizations optimistic that organizing around customer service and product delivery can be accomplished with as little employee disruption as possible.
Financial advisors involved in the transaction were D.A. Davidson & Co., representing WesBanco, and Keefe, Bruyette & Woods, Inc., representing Old Line.
Legal representations in the transaction include Phillips Gardill Kaiser & Altmeyer PLC and K&L Gates LLP for WesBanco, and Baker, Donelson, Bearman, Caldwell & Berkowitz, PC for Old Line.
About Old Line Bancshares, Inc.:
Old Line Bancshares is the parent company of Old Line Bank, a Maryland-chartered trust company with the powers of a commercial bank, headquartered in Bowie, Maryland, approximately 10 miles east of Andrews Air Force Base and 20 miles east of Washington, D.C. The Bank has 37 branches located in its primary market area of the suburban Maryland(Washington, D.C. suburbs, Southern Maryland and Baltimore suburbs) counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Harford, Howard, Frederick, Montgomery, Prince George's and St. Mary's, and Baltimore City. It also targets customers throughout the greater Washington, D.C. and Baltimore metropolitan areas. Old Line's common stock trades on the Nasdaq Capital Market under the symbol "OLBK".
About WesBanco, Inc.:
Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $12.5 billion (as of June 30, 2019). WesBanco is a diversified and well-balanced financial services institution, with a community bank at its core, built upon a strong legacy of credit and risk management. WesBanco has meaningful market share across its key geographies maintained by its commitment to dedicated customer service and solid fee-based businesses. It also provides wealth management services through a century-old trust and wealth management business, with approximately $4.5 billion of assets under management (as of June 30, 2019), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds. WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 199 financial centers in the states of Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia. In addition, WesBanco operates an insurance agency, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc. WesBanco's common stock trades on the Nasdaq Global Select Market under the symbol "WSBC".
