UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): October 22, 2021
SHORE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 000-22345 | 52-1974638 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 18 E. Dover St., Easton, Maryland | 21601 | |||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (410) 763-7800
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| x | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.01 per share | SHBI | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| ITEM 5.07. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
On October 22, 2021, Shore Bancshares, Inc., a Maryland corporation (the “Company”), held a special meeting of its shareholders (the “Special Meeting”) to consider and vote upon (i) a proposal to approve the merger of Severn Bancorp, Inc., a Maryland corporation (“Severn”), with and into the Company, with the Company as the surviving corporation (the “Proposed Transaction”), and the issuance of shares of the Company’s common stock to the shareholders of Severn pursuant to that certain Agreement and Plan of Merger, dated as of March 3, 2021 (the “Merger Agreement”), by and between the Company and Severn, and (ii) a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Special Meeting to approve the Proposed Transaction and the issuance of shares of the Company’s common stock in connection with the Proposed Transaction. As described below, there were sufficient shares of the Company’s common stock present in person or by proxy and voted at the Special Meeting in favor of the first proposal, and as a result, the adjournment proposal was not considered or voted upon at the Special Meeting. The following are the voting results of the Special Meeting.
On September 3, 2021, the record date for the Special Meeting, there were 11,752,990 shares of the Company’s common stock issued, outstanding and entitled to vote. Shareholders holding 8,672,494 shares of Company common stock were present at the Special Meeting, in person or represented by proxy.
| 1. | Approval of the Proposed Transaction and the Issuance of Shares of the Company’s Common Stock* |
| For | Against | Abstain | Broker Non-Votes |
| 8,063,999 | 606,879 | 1,615 | - |
*The affirmative vote of at least a majority of the outstanding shares of Company common stock was required to approve this proposal. Abstentions and broker non-votes were not counted as votes cast, but were treated as present for quorum purposes.
| ITEM 7.01. | REGULATION FD DISCLOSURE. |
On October 22, 2021, the Company was informed by Severn that Severn’s shareholders approved (i) the Merger Agreement and the Proposed Transaction (the "Merger Proposal"), and (ii) the compensation payable to the named executive officers of Severn in connection with the Proposed Transaction (the "Compensation Proposal"), at a special meeting of its shareholders held on October 22, 2021.
On October 22, 2021, the Company and Severn issued a joint press release announcing that, at special meetings of their respective shareholders held on October 22, 2021, the Company's shareholders approved the Proposed Transaction and the issuance of shares of the Company’s common stock to Severn shareholders pursuant to the Merger Agreement, and Severn's shareholders approved the Merger Proposal and the Compensation Proposal. Subject to customary closing conditions, the Proposed Transaction is expected to be consummated effective as of October 31, 2021. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”).
Information contained in Item 7.01 of this Current Report, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, as amended, nor shall such information and exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
(d) Exhibits
Exhibit
Number
| 99.1 | Press release, dated October 22, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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.
| SHORE BANCSHARES, INC. | ||
| Dated: October 22, 2021 | By: | /s/ Lloyd L. Beatty, Jr. |
| Lloyd L. Beatty, Jr. | ||
| President and Chief Executive Officer | ||
Exhibit 99.1
Shore Bancshares, Inc. and Severn Bancorp, Inc. Announce Receipt of Shareholder Approval for Merger
Easton, Maryland and Annapolis, Maryland, October 22, 2021 – Shore Bancshares, Inc. (NASDAQ: SHBI) (the “Company” or “Shore”), the holding company of Shore United Bank, and Severn Bancorp, Inc. (NASDAQ: SVBI) (“Severn”), the holding company of Severn Savings Bank, FSB, announced today that, at special meetings of their respective shareholders held on October 22, 2021, Shore's shareholders approved the merger of Severn with and into Shore, with Shore as the surviving corporation (the “Merger”), and the issuance of shares of Shore’s common stock to the shareholders of Severn pursuant to that certain Agreement and Plan of Merger, dated as of March 3, 2021 (the “Merger Agreement”), by and between the Company and Severn, and Severn’s shareholders approved the Merger Agreement, the Merger, and the compensation payable to the named executive officers of Severn in connection with the Merger.
The Company previously announced the receipt of all required bank regulatory approvals for the consummation of the Merger and the merger of Severn Savings Bank, FSB, Severn’s wholly-owned bank subsidiary, with and into Shore United Bank, with Shore United Bank as the surviving institution. Subject to customary closing conditions, the transaction is expected to be consummated effective as of October 31, 2021.
Lloyd L. Beatty, Jr., President and Chief Executive Officer of Shore, commented, “We are pleased to have received the approval of our shareholders for our acquisition of Severn and the issuance of shares of our common stock to Severn’s shareholders in connection with our acquisition, and the approval of the proposed transaction by Severn’s shareholders. We believe that these voting results are an affirmation of our belief that the combination of Shore and Severn will create one of the most attractive commercial banks in and beyond Maryland with significant opportunities to enhance the banking experience for the combined institution’s customers and drive increased value for our shareholders.”
About Shore Bancshares, Inc.
Shore Bancshares, Inc. is the largest independent financial holding company headquartered on the Eastern Shore of Maryland. It is the parent company of Shore United Bank. The Bank operates 22 full-service branches in Baltimore County, Howard County, Kent County, Queen Anne’s County, Talbot County, Caroline County, Dorchester County and Worcester County in Maryland, Kent County, Delaware and Accomack County, Virginia. The Company engages in trust and wealth management services through Wye Financial Partners, a division of Shore United Bank.
About Severn Bancorp, Inc.
Severn Bancorp, Inc. is a savings and loan holding company chartered as a corporation in the state of Maryland in 1990. It conducts business primarily through three subsidiaries, Severn Savings Bank, FSB, Mid-Maryland Title Company, Inc. and SBI Mortgage Company. Founded in 1946, Severn Savings Bank is a full-service community bank offering a wide array of personal and commercial banking products as well as residential and commercial mortgage lending. It has seven branches located in Annapolis, Crofton, Edgewater, Glen Burnie, Lothian/Wayson’s Corner, and Severna Park.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release may be considered forward-looking statements regarding the Company, including its wholly-owned subsidiary Shore United Bank, and the Company’s proposed acquisition of Severn and Severn Savings Bank, FSB. These forward-looking statements may include: statements regarding the acquisition, the consideration payable in connection with the acquisition, and the ability of the parties to consummate the acquisition. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “pro forma” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that the Company anticipated in its forward-looking statements and future results could differ materially from historical performance. Factors that could cause or contribute to such differences include, but are not limited to, the possibility: that expected benefits of the acquisition may not materialize in the timeframe expected or at all, or may be more costly to achieve; that prior to the completion of the acquisition or thereafter, Shore’s and Severn’s respective businesses may not perform as expected; that the parties are unable to successfully implement integration strategies; reputational risks and the reaction of the companies’ employees or customers to the transaction; diversion of management time on acquisition-related issues; that the COVID-19 pandemic, including uncertainty and volatility in financial, commodities and other markets, and disruptions to banking and other financial activity, could harm Shore’s and Severn’s business, financial position and results of operations, and could adversely affect the timing and anticipated benefits of the proposed acquisition; and those factors and risks referenced from time to time in Shore’s and Severn’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including Shore’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, its Quarterly Reports on Form 10-Q for the periods ended March 31, 2021 and June 30, 2021, and its other filings with the SEC, and in Severn’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, its Quarterly Reports on Form 10-Q for the periods ended March 31, 2021 and June 30, 2021, and its other filings with the SEC. SEC filings are available free of charge on the SEC’s website at www.sec.gov. For any forward-looking statements made in this press release or in any documents, Shore and Severn claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Except to the extent required by applicable law or regulation, the Company disclaims any obligation to revise or publicly release any revision or update to any of the forward-looking statements included herein to reflect events or circumstances that occur after the date on which such statements were made.
For additional information or questions, please contact:
Lloyd L. “Scott” Beatty, Jr.
President and Chief Executive Officer
Shore Bancshares, Inc.
(410) 763-7800
Edward C. Allen
Chief Financial Officer
Shore Bancshares, Inc.
(410) 763-7800
Alan Hyatt
Chairman, President and Chief Executive Officer
Severn Bancorp, Inc.
410-260-2000
Vance Adkins
Chief Financial Officer
Severn Bancorp, Inc.
410-260-2000