Camden National Corporation, the parent company of Camden National Bank, and SBM Financial,the parent company of The Bank of Maine, signed an agreement under which The Bank of Maine will merge into Camden National Bank.
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The combined organization will operate under the Camden National Bank name and brand and be led by Gregory A. Dufour, president and chief executive officer of Camden National Corporation and Camden National Bank.
Consideration will be paid to SBM Financial, Inc. stockholders in a combination of stock and cash valued at approximately $135 million based on Camden National's closing price of $38.60 on March 27, 2015. Under the terms of the agreement, 80% of SBM Financial, Inc. common shares will be converted into Camden National common stock and the remaining 20% will be exchanged for cash.
SBM Financial, Inc. stockholders will have the option to elect to receive either 5.421 shares of Camden National common stock or $206 in cash for each SBM Financial, Inc. common share, subject to proration to ensure that in the aggregate 80% of SBM Financial, Inc. shares will be converted into stock.
With estimated cost savings of 37% of The Bank of Maine's pre-tax non-interest expenses and an anticipated closing date in the third quarter of 2015, the transaction is expected to be mid-teens accretive to Camden National's earnings per share starting in 2016. Camden National will maintain its strong capital position with a pro forma tangible equity to tangible assets ratio of 7.0%.
The transaction is intended to qualify as reorganization for federal income tax purposes. As a result, the shares of SBM Financial, Inc., exchanged for Camden National stock will be transferred on a tax-free basis. The definitive agreement has been approved by the boards of directors of both Camden National and The Bank ofMaine.
The completion of the transaction is subject to stockholder and regulatory approvals for both companies. After the transaction is completed, Camden National will add two of The Bank of Maine directors to its board of directors. ■