NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) comments on Old Line Bancshares, Inc. and DCB Bancshares, Inc. merger. The report makes the following key points:
- Old Line Bancshares, Inc. (NASDAQ: OLBK, “Old Line”) and DCB Bancshares, Inc. (DCB) announced the execution of a definitive merger agreement, with Old Line Bancshares, Inc. as the surviving entity.
- The deal is expected to close in mid-2017, and Old Line anticipates the merger to be immediately accretive to OLBK’s tangible book value and immediately accretive to its earnings, excluding the expenses of the transaction.
- After completion of the merger, Old Line’s branch network will expand to 27 locations serving nine counties in Maryland with pro-forma total assets of approximately $2 billion.
- In August 2016, KBRA assigned a senior unsecured debt rating of BBB, subordinated debt rating of BBB-, and short-term debt rating of K3 for Old Line Bancshares, Inc. In addition, KBRA assigned a deposit and senior unsecured debt rating of BBB+ and short-term debt and deposit ratings of K2, for the subsidiary bank, Old Line Bank. The Outlook on all long-term ratings is Stable.
- DCB Bancshares, Inc. appears to have sound overall financial condition. As of third quarter 2016 data, KBRA’s Subscription Rating Service rated DCB’s lead subsidiary, Damascus Community Bank, B on the financial strength rating scale.
- In KBRA’s view, the transaction is neutral to the ratings of Old Line in the short-term. The merger could potentially be a credit positive in the medium and long term as it naturally extends and enhances scale within OLBK’s existing operating footprint, adds a strong deposit franchise, and presents sizeable cost saving opportunities.
The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology published on February 19, 2016.
Please click here to view the report.
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