Shore Bancshares, Inc. completed the acquisition of Severn Bancorp, Inc. for approximately $170 million million.
Pursuant to the terms of the merger agreement, SHBI is required to appoint Severn, four individuals who are members of the Severn Board of Directors immediately prior to the effective time of the transaction, each of whom must be mutually agreeable to SHBI and Severn and one of whom shall be Alan Hyatt, the Chairman, President and Chief Executive Officer of Severn, as Directors of SHBI and Shore United, with Alan Hyatt being appointed as the Chairman of the SHBI board of directors and Shore United Board of Directors. Each individual will be assigned to a SHBI Board of Directors class and shall serve for a term that coincides with the remaining term of that class and until his or her successor is elected and qualified. Each of SHBI and Severn and their respective Boards of Directors shall, if any state antitakeover statute or similar statute becomes applicable to this agreement and the transaction, take all action reasonably necessary to ensure that the transaction may be consummated. Post-closing of the merger the Directors of the surviving bank shall be the persons serving as directors of Shore United Bank, National Association immediately prior to the effective time and four new Directors who shall be appointed pursuant to the terms of the merger agreement. Scott Beatty will continue as Chief Executive Officer of the combined company. Severn Directors, executive officers and certain shareholders have entered into agreements with Shore pursuant to which they have committed to vote their shares of Severn common stock in favor of the merger of Severn with and into Shore. Shore directors and executive officers have entered into agreements with Severn pursuant to which they have committed to vote their shares of Shore common stock in favor of the issuance of shares of Shore to Severn shareholders in the merger.
The transaction is subject to following conditions such as the approval of the merger agreement by Severn's shareholders and the approval of the issuance of shares of SHBI common stock by SHBI's shareholders; the receipt of all necessary regulatory approvals by Shore United for the approval of the Office of the Comptroller of the Currency to convert to a national banking association and the transaction; the effective registration of the shares of SHBI common stock with the Securities and Exchange Commission to be issued to Severn's shareholders and the approval of such shares for listing on the Nasdaq Global Market. The transaction was unanimously approved by the Board of Directors of Shore Bancshares and Severn Bancorp. The board recommends the shareholder to vote in favor of the transaction on the shareholder meeting to be held on October 22, 2021. Shore United Bank and Severn Savings Bank Receive Shareholder Approval for Merger. The closing of the bank merger will take place immediately following the merger. As of September 27, 2021, Shore Bancshares has received regulatory approval from the Office of the Comptroller of the Currency to convert Shore United Bank to a national bank and, for Severn Savings Bank, FSB to be merged with and into Shore United Bank, National Association. Severn and Shore shareholders approved the transaction at special meetings of their respective shareholders held on October 22, 2021. The transaction is expected to close in third quarter of 2021. The parties expect to complete the merger during the fourth quarter of 2021. As of October 22, 2021, the transaction is expected to close on October 31, 2021. Shore expects the transaction to be over 30% accretive to EPS in 2022, based on anticipated cost savings of approximately 35% and will increase Shore's total assets to approximately $2.9 billion on a pro forma basis as of December 31, 2020.
Janney Montgomery Scott LLC acted as financial advisor to Shore in the transaction and delivered a fairness opinion to the Board of Directors of Shore. Kevin Houlihan and William Levay, Holland & Knight LLP served as legal counsel to Shore. Piper Sandler & Co. acted as financial advisor to Severn and delivered a fairness opinion to the Board of Directors of Severn. Benjamin Azoff and Gary Lax of Luse Gorman, PC served as legal counsel to Severn. Broadridge Corporate Issuer Solutions, Inc. is the transfer agent and registrar for Shore's common stock. Alliance Advisors, LLC is the proxy solicitation agent for Shore and Severn. Janney will receive a fee of 0.75% of the aggregate purchase price. At the time of announcement of the merger, Janney's fee was approximately $1.1 million. Janney also received a $100,000 fee from SHBI upon rending its opinion, which opinion fee will be credited in full, upon request of SHBI, towards the advisory fee. Piper Sandler will receive a fee for its services, which fee is equal to 1.0% of the aggregate purchase price. At the time of announcement of the Merger, Piper Sandler's fee was approximately $1.5 million. Piper Sandler also received a $125,000 fee from Severn upon rending its opinion, which opinion fee will be credited in full towards the advisory fee.
Shore Bancshares, Inc. (NasdaqGS:SHBI) completed the acquisition of Severn Bancorp, Inc. (NasdaqCM:SVBI) for approximately $170 million million on March 3, 2021.