<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 28, 1999
Suburban Bancshares, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-16595 54-1319411
(State or other jurisdiction (Commission File Number) (IRS Employer Identification Number)
of incorporation)
</TABLE>
7505 Greenway Center Drive Greenbelt, Maryland 20768-0298
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 301.474.6694
<PAGE> 2
Item 5. Other Events.
On September 28, 1999, Suburban Bancshares, Inc. ("Suburban"), the bank
holding company for Suburban bank of Maryland, Greenbelt, Maryland, entered into
a Plan and Agreement to Merge (the "Merger Agreement"), pursuant to which
Suburban will be merged into Columbia Bancorp, Inc., the bank holding company
for Columbia Bank, Columbia, Maryland (the "Merger"). Columbia will be the
surviving company resulting from the Merger. In connection with the merger,
Suburban Bank will merge with Columbia Bank, with Columbia Bank surviving the
merger. The Merger is intended to be a tax-free reorganization for federal
income tax purposes and to be accounted for as a pooling-of-interests.
Under the Merger Agreement, each share of Suburban common stock
outstanding immediately prior to the effective time of the Merger will be
converted into 0.2196 shares of Columbia common stock (rounded to the nearest
hundredth of a share, with cash being paid in lieu of fractional share
interests). The conversion ratio is subject to increase, but not decrease, to
the extent necessary to cause the value of the Columbia shares into which each
share of Suburban common stock shall have been converted to be $3.00 per share
(based on the mean of the daily high and low trade prices of Columbia common
stock for the 10 trading days ending on the trading date that is three days
before the Effective Date, or, if there are no trades, the daily high bid and
low asked prices, reported on NASDAQ), provided that the adjusted conversion
ratio may not exceed 0.2338 shares of Columbia common stock per share of
Suburban common stock. Options to purchase Suburban common stock outstanding at
the effective time of the Merger will be converted as to each whole share
subject to such option into a proportionally adjusted option to purchase, for
the same aggregate exercise price, the number of whole shares of Suburban common
stock subject to the option multiplied by the conversion ratio.
Consummation of the Merger is subject to various conditions, including
(i) the approval of the shareholders of Suburban and Columbia, (ii) the approval
of the appropriate state and federal bank regulators and other governmental
agencies, (iii) the receipt of a letter from Columbia's independent auditors
that the Merger will qualify for pooling-of-interests accounting treatment, (iv)
the receipt of an opinion of counsel that the Merger will be treated for federal
tax purposes as a tax free reorganization for federal income tax purposes, and
(v) other customary conditions to closing.
In connection with the Merger Agreement, Suburban and Columbia entered
into an option agreement which provides Columbia with the right to purchase up
to 19.9% of Suburban's common stock at an exercise price per share of $2.313
(subject to adjustment in certain circumstances), upon the occurrence of certain
events described in the option agreement. Suburban and Columbia also entered
into a substantially identical option agreement which provides Suburban the
right to purchase up to 9.9% of the Columbia common stock at an exercise price
per share of $13.063 (subject to adjustment in certain circumstances), upon the
occurrence of certain events described in the option agreement. The options were
granted by each of Suburban and Columbia as a condition to the other party's
entering into the Merger Agreement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. Not applicable.
(b) Pro Forma Financial Information. Not Applicable.
(c) Exhibits. (1) Press release dated September 28, 1999
<PAGE> 3
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SUBURBAN BANCSHARES, INC.
By: /s/ Winfield M. Kelly, Jr.
-----------------------------------
Winfield M. Kelly Jr., Chairman of
the Board and Chief Executive
Officer
Dated: September 29, 1999
<PAGE> 1
Exhibit (1)
PRESS RELEASE
FOR IMMEDIATE RELEASE - SEPTEMBER 28, 1999
FOR MORE INFORMATION, CONTACT:
John M. Bond, Jr. - President and Chief Executive Officer, Columbia Bancorp
(410) 465-4800
Stephen A. Horvath - President and Chief Operating Officer, Suburban Bancshares
(301) 474-6694
COLUMBIA BANCORP AND SUBURBAN BANCSHARES, INC.
ANNOUNCE DEFINITIVE MERGER AGREEMENT
Columbia, Maryland, September 28, 1999 - Columbia Bancorp (Nasdaq - CBMD),
headquartered in Columbia, Maryland, and Suburban Bancshares, Inc. (Nasdaq SBNK)
headquartered in Greenbelt, Maryland, announced jointly today that they have
signed a definitive merger agreement.
The definitive merger agreement provides for the merger of Suburban into
Columbia. Columbia will exchange between 2,482,000 and 2,642,000 shares of its
common stock for all outstanding shares of Suburban. Based upon the closing
price of Columbia shares on September 27, 1999 of $12.875, the transaction has a
value of approximately 2.63 million Columbia common shares worth $33.9 million,
or $3.00 per share of Suburban. The deal value represents a 37% premium to
market for shareholders of Suburban based on the closing price of $2.188 at
September 27, 1999. The merger is intended to be a tax-free exchange for
Suburban shareholders and will be accounted for as a pooling of interests.
Upon completion of the merger, which is subject to approval by
shareholders of both companies and by regulatory agencies, Suburban's
subsidiary, Suburban Bank of Maryland, will merge into Columbia's subsidiary,
The Columbia Bank. Although the two banks serve adjoining counties in the
Baltimore-Washington Corridor, there is very little market overlap and all
branch locations will remain open. Following the merger, The Columbia Bank will
operate twenty-three branches (nine in Howard County, six in Baltimore County,
five in Prince George's County, and three in Montgomery County).
"We are very pleased to be joining forces with Suburban, an institution
with deep roots in the suburban Washington markets of Maryland" commented John
M. Bond, Jr., President and CEO of Columbia. "This merger will further enhance
our presence in the prosperous Baltimore-Washington Corridor and provide
excellent opportunities for continued rapid growth." Since opening in 1988,
Columbia has maintained a compound annual growth rate of 30%.
Winfield Kelly, Chairman and CEO of Suburban, noted, "The combination of
Suburban's strong commercial banking franchise coupled with the additional
capabilities of Columbia in consumer banking and residential lending will
provide the foundation for continued aggressive growth in the Washington
suburban market."
Following the merger, Mr. Kelly will serve as Chairman, James R. Moxley,
Jr. as Vice Chairman, Herschel L. Langenthal as Chairman of the Executive
Committee and Mr. Bond as President and CEO of Columbia. Mr. Stephen A. Horvath,
President and Chief Operating Officer of Suburban Bancshares, will serve as
Executive Vice President of the Washington Region for The Columbia Bank.
<PAGE> 2
Columbia and Suburban anticipate substantial merger cost savings
resulting from combined operations and increased revenue from offering
Columbia's broader product line in markets served by Suburban.
The following chart compares Columbia and Suburban at June 30, 1999.
<TABLE>
<CAPTION>
Pro-forma
(Dollars in thousands) Columbia Suburban Combined
---------------------- -------- -------- --------
<S> <C> <C> <C>
Total Assets $457,255 $222,575 $679,830
Loans 293,959 135,195 429,154
Deposits 356,627 186,578 543,205
Equity 39,021 20,354 59,555
</TABLE>
This news release contains, among other things, certain forward-looking
statements regarding the combined company following the merger. Such
forward-looking statements involve certain risks and uncertainties, including a
variety of factors that may cause the combined company's actual results to
differ materially from the anticipated results or other expectations expressed
in such forward-looking statements.
Columbia Bancorp, headquartered in Columbia, Maryland, is a bank holding
company and parent company of The Columbia Bank, a commercial bank. The Columbia
Bank currently operates fourteen banking offices and will open a fifteenth
banking office in the fourth quarter 1999. The Columbia Bank provides a full
range of financial services to consumers and businesses. Columbia Bancorp's
Common Stock is traded on the National Market tier of The Nasdaq Stock
Market(SM) under the symbol "CBMD".
Suburban Bancshares, headquartered in Greenbelt, Maryland, is a bank
holding company and parent company of Suburban Bank of Maryland, a commercial
bank. Suburban Bank of Maryland operates eight banking offices. Suburban
Bancshares' Common Stock is traded on the Small Cap tier of The Nasdaq Stock
Market(SM) under the symbol "SBNK".
