SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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) October 16, 1998
MASON-DIXON BANCSHARES, INC.
(Exact name of Registrant as specified in Charter)
Maryland 0-20516 52-1764929
(State or other Jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification
No.)
45 W. Main Street, Westminster, MD 21157
(Address of Principal Executive Offices/Zip Code)
Registrant's telephone number, including area code: (410) 857-3401
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
On October 16, 1998, Mason-Dixon Bancshares, Inc. announced an
agreement to acquire Sterling Bancorp, a Maryland corporation and parent company
to Sterling Bank and Trust Co., a Maryland commercial bank. A copy of the press
release is attached to this Current Report on Form 8-K as Exhibit 99.1.
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.
MASON-DIXON BANCSHARES, INC.
Date: October 16, 1998 By: /s/ Thomas K. Ferguson
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Thomas K. Ferguson
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
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99.1 Press Release
Exhibit 99.1
NEWS FROM MASON-DIXON BANCSHARES, INC.
FOR RELEASE IMMEDIATE For Further Information Contact:
Thomas K. Ferguson
President and CEO
410-857-3400
Mark A. Keidel
Chief Financial Officer
410-857-3453
MASON-DIXON BANCSHARES AGREES TO ACQUIRE STERLING BANCORP
Westminster, MD (10/16/98) - Thomas K. Ferguson, President and Chief Executive
Officer of Mason-Dixon Bancshares, Inc. (NASDAQ:MSDX) and Mark H. Anders,
President and Chief Executive Officer of Sterling Bancorp, announced today the
companies have reached an agreement for Mason-Dixon to acquire Baltimore-based
Sterling Bancorp. Sterling Bancorp is the parent company of Sterling Bank and
Trust Co., a $70 million dollar asset commercial bank with branch locations in
Baltimore City, Annapolis, Pikesville and Timonium.
Mason-Dixon will pay $10.294 million in cash, subject to adjustment under
certain circumstances, in exchange for all of the outstanding common shares of
Sterling and cancellation of all outstanding warrants and options. Shortly after
the acquisition, Sterling Bank and Trust Co. will be merged into Mason-Dixon's
affiliate, Bank of Maryland. Sterling's Pikesville and Baltimore City branches
will be consolidated into nearby Bank of Maryland branches while the Annapolis
and Timonium branches will be retained. Mason-Dixon expects cost savings of
approximately $2 million, or 66% of Sterling Bancorp's 1998 projected general
and administrative expenses as a result of branch and back office consolidation.
The acquisition of Sterling Bancorp, which is subject to regulatory approval, as
well as approval of the stockholders of Sterling Bancorp, is expected to close
by December 31, 1998. The merger of Sterling Bank and Trust Co. into Bank of
Maryland is expected to be consummated by mid first quarter of 1999. Assuming
integration of Sterling's operations in accordance with Mason- Dixon's plans,
the transaction is expected to begin to be accretive to earnings per share
beginning with the second quarter of 1999. Mason-Dixon expects to take an after
tax charge of approximately $400,000 for acquisition and merger related expenses
during the fourth quarter of 1998.
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"We view this acquisition as a first step toward our plan of focusing our
resources in our core market, following the Eastern Shore branch divestiture by
our affiliate, Bank of Maryland, earlier this year," Ferguson said.
Anders stated that "Sterling is excited about joining forces with Mason-Dixon.
Mason-Dixon is a growing regional institution which can offer our customers
expanded products, services and locations."
Mason-Dixon Bancshares, Inc., headquartered in Westminster, is the parent
company of Carroll County Bank and Trust Company, Bank of Maryland and Rose
Shanis Financial Services, LLC. Its subsidiaries operate 19 banking and 12
consumer finance offices primarily in Central Maryland. With assets of
approximately $1.1 billion, it is the sixth largest independent bank holding
company headquartered in Maryland.
TRANSACTION DETAILS
Price All cash in exchange for all outstanding shares of Sterling
Bancorp and cancellation of all outstanding stock warrants
and options. Total value of transaction is $10,294,218
($21.54 per share) accounted for as a purchase.
Price/Book 146% of Sterling Bancorp's book value as of June 30, 1998.
Cost Savings/ Cost savings of approximately $2 million is expected as a
Charges result of branch and back office consolidation. Mason-Dixon
expects to take an after tax charge in the fourth quarter of
1998 of approximately $400,000 for acquisition and merger
related expenses.
Target Closing The Company's acquisition of Sterling Bancorp is expected to
close by year end 1998, and the merger of Sterling Bank and
Trust Co. into Bank of Maryland, and related systems
conversions, are expected to be completed in mid first
quarter 1999. The transaction is expected to begin to be
accretive to Mason-Dixon's earnings beginning with the
second quarter 1999.
This press release contains forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995. Such statements are not
historical facts and include expressions about the Company's confidence and
strategies, and expectations about the projected closing date, cost savings and
Company earnings. These statements may be identified by such forward-looking
terminology as "expect", "believe", "anticipate", or by expressions of
confidence such as "continuing" or "strong" or similar statements or variations
of such terms. Such forward- looking statements involve certain risks and
uncertainties. These include, but are not limited to whether the expected cost
savings and revenue enhancements from the acquisition and merger can be realized
as anticipated, greater than expected deposit attrition, customer loss, or
revenue loss following the acquisition, general economic conditions and
competition in the geographic and business areas in which the Company and its
subsidiaries operate, inflation, fluctuations in
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interest rates, legislation, and governmental regulation. Actual results may
differ materially from such forward-looking statements. The Company assumes no
obligation for updating any such forward-looking statements at any time.
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