LINKBANCORP, parent company of LINKBANK, and Partners Bancorp, a financial services company with two wholly-owned operating subsidiaries, The Bank of Delmarva and Virginia Partners Bank, entered into a definitive agreement under which the companies will combine in an all-stock combination, valued at approximately $167.8 million, based on LINK’s 10 day volume-weighted average price of $8.08 as of Feb. 21.

Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Partners shareholders will receive 1.15 shares of LINK stock for each Partners share they own. Upon completion of the transaction, Partners shareholders will own approximately 56% and LINK shareholders, inclusive of shares issued in a concurrent private placement of common stock, will own approximately 44% of the combined company. In connection with the transaction LINK has completed a private placement common stock offering resulting in $10 million in gross proceeds. Once the merger transaction is completed, the combined organization will be a leading Mid-Atlantic community banking franchise with nearly $3 billion in assets and an expected $300+ million market capitalization.

The combined bank holding company will operate under the LINKBANCORP, Inc. name, and the combined bank subsidiary will operate as LINKBANK. Each of Partners’ subsidiary banks will merge with and into LINKBANK. The combined company will operate under LINK’s regional focused business model and Partners executives will lead the Delmarva/Maryland, Northern Virginia and Fredericksburg regions for the combined entity. The corporate headquarters of the combined bank holding company and combined bank entity will be located in Camp Hill, Pennsylvania, and will retain a major operating presence in both Salisbury, Maryland and Fredericksburg, Virginia.

“This is an exciting combination that accelerates our strategic objectives to create the leading community bank headquartered in the Mid-Atlantic markets,” John W. Breda, president, CEO and director of Partners Bancorp, said. “Importantly, LINK shares our values and relationship-based and regional-focused business model. Our combined size and resources will significantly enhance our scale and ability to help customers through higher lending limits and greater investment in technology, and will increase career opportunities for employees. I very much look forward to partnering with the LINK team to grow our combined organization.”

“This is a transformational partnership that will enhance what both banks are able to do for our team members, clients, investors and communities, while driving significant value for our shareholders,” Andrew S. Samuel, CEO and vice chairman of LINKBANCORP, said. “This merger significantly accelerates each entity’s size, profitability, and operating leverage. We look forward to bringing our companies together to better serve all stakeholders and achieve our mission of positively impacting lives.”

The merger is expected to close in the third quarter of 2023, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by the shareholders of each company.

Stephens is serving as exclusive financial advisor to LINK, and has rendered a fairness opinion to the board of directors of LINK. Luse Gorman, PC is serving as legal advisor to LINK.

Piper Sandler & Co. is serving as exclusive financial advisor to Partners Bancorp, and has rendered a fairness opinion to the board of directors of Partners. Troutman Pepper Hamilton Sanders is serving as legal advisor to Partners Bancorp.