Howard Bancorp, Inc. (HBMD) stock prices surged by 28.30% shortly after market trading commenced on July 13th, 2021, bringing the price per share up to USD$20.04 early on in the trading day.
Merger with FNB
July 13th, 2021 saw the company announce its signing of a definitive merger agreement that would see FNB acquire Howard Bancorp, including its wholly-owned banking subsidiary, Howard Bank. The all-stock transaction will see each share valued at USD$21.96, coming out to a fully diluted market value of roughly USD$418 million, reflecting the company’s closing stock price as of the market closing on July 12th, 2021.
Details of Merger
Based out of Baltimore, Howard boasts roughly USD$2.6 billion in total assets, USD$2 billion in total deposits, and USD$1.9 billion in total loans and leases as of March 31st, 2021. The company operates 13 full-service banking offices spread out across Baltimore and the greater Washington, D.C., area. The strategically significant merger is expected to facilitate the continuation of the company’s growth trajectory, as well as consolidating FNB’s historic presence in the Mid-Atlantic Region.
Scope of Acquisition
On a pro-forma basis, the proposed merger is expected to result in FB reporting roughly USD$41 billion in total assets, USD$32 billion in deposits, as well as USD$27 billion in total loans. As per the merger agreement, that has been unanimously approved by both companies’ Boards of Directors, shareholders of HBMD will be entitled to receive 1.8 shares of FNB common stock for each already owned share of Howard’s common stock.
Consolidated Market Presence
The exchange ratio is fixed, with the transaction expected to qualify as a tax-free exchange for HBMD’s stockholders. Concurrently with the parent company merger, HBMD will also merge with and into FNB’s subsidiary, First National Bank of Pennsylvania. Cumulatively, the combined entity will boast the sixth-largest deposit share in the Baltimore market, consolidating their strong presence in the market. Furthermore, it will present the companies with the opportunity to deliver an unprecedented experience for its customers, communities, and dedicated teams.
Future Outlook for HBMD
Armed with the fortuitous pending merger, the company is poised to capitalize on the expanded scope of opportunities it finds at its disposal. HBMD is keen to leverage its additional resources in a bid to facilitate significant and sustained increases in shareholder value over the long term.