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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):
July 3, 2023 (July 1, 2023)
THE COMMUNITY FINANCIAL CORPORATION
(Exact
name of registrant as specified in its charter)
Maryland |
001-36094 |
52-1652138 |
(State or other jurisdiction of
incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
3035 Leonardtown Road, Waldorf, Maryland 20601
(Address of principal executive offices) (Zip Code)
(301) 645-5601
(Registrant’s telephone number, including area code)
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:
¨ 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 |
TCFC |
The NASDAQ Stock Market LLC |
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. ☐
Introductory Note.
This
Current Report on Form 8-K is being filed in connection with the transactions contemplated by that certain Agreement and Plan
of Merger, dated as of December 14, 2022 (the “Merger Agreement”), by and between The Community Financial Corporation
(“TCFC”), a Maryland corporation, and Shore Bancshares, Inc., a Maryland corporation (“SHBI”).
Effective July 1, 2023 (the
“Closing Date”), TCFC completed its merger of equals with SHBI pursuant to the terms of the Merger Agreement. At the
effective time of the Merger (the “Effective Time”), TCFC was merged with and into SHBI, with SHBI as the surviving
corporation, which was promptly followed by the merger of TCFC’s wholly-owned bank subsidiary, Community Bank of the Chesapeake,
a Maryland-chartered commercial bank (“CBC”), with and into Shore United Bank, N.A. (“Shore United”),
which is the wholly-owned subsidiary of SHBI, with Shore United as the surviving bank.
Pursuant to the terms of the
Merger Agreement, each share of TCFC common stock, par value $0.01 per share (“TCFC Common Stock”), outstanding immediately
prior to the Effective Time was converted into 2.3287 shares (the “Exchange Ratio”) of SHBI common stock, par value
$0.01 per share (“SHBI Common Stock”), with an amount in cash, without interest, to be paid in lieu of fractional shares
(the “Merger Consideration”).
At the Effective Time, and
pursuant to the Merger Agreement, (i) each award in respect of a share of TCFC Common Stock subject to vesting, repurchase or other lapse
restriction (a “TCFC Restricted Stock Award”) that was outstanding immediately prior to the Effective Time was automatically
converted into a restricted stock award (a “SHBI Restricted Stock Award”) in respect of that number of shares of SHBI
Common Stock, equal to the product of the total number of shares of TCFC Common Stock subject to the TCFC Restricted Stock Award multiplied
by the Exchange Ratio; (ii) each time-vesting restricted stock unit award in respect of a share of TCFC Common Stock (a “TCFC
RSU Award”) that was outstanding immediately prior to the Effective Time was automatically converted into a time-vesting restricted
stock unit award (a “SHBI RSU Award”) in respect of that number of shares of SHBI Common Stock, equal to the product
of the total number of shares of TCFC Common Stock subject to the TCFC RSU Award multiplied by the Exchange Ratio; and (iii) each performance-vesting
restricted stock unit award in respect of a share of TCFC Common Stock (a “TCFC PSU Award”) that was outstanding immediately
prior to the Effective Time was automatically converted into a SHBI RSU Award in respect of that number of shares of SHBI Common Stock
equal to the product of the total number of shares of TCFC Common Stock subject to the TCFC PSU Award multiplied by the Exchange Ratio.
The number of shares of TCFC Common Stock subject to a TCFC PSU Award immediately prior to the Effective Time was determined assuming
performance goals were satisfied based on target performance. Each outstanding share of SHBI Common Stock remained outstanding and was
unaffected by the Merger.
The total aggregate consideration delivered to holders of TCFC Common
Stock was approximately 13,296,910 shares of SHBI Common Stock. The issuance of shares of SHBI Common Stock in connection with the Merger
was registered under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Registration Statement
on Form S-4 (File No. 333-271273) initially filed by SHBI with the Securities and Exchange Commission (the “SEC”) on
April 14, 2023 and declared effective on May 8, 2023 (the “Registration Statement”). The joint proxy statement/prospectus
included in the Registration Statement (the “Joint Proxy Statement/Prospectus”) contains additional information about
the Merger Agreement and the transactions contemplated thereby.
The foregoing description
of the transactions contemplated by the Merger Agreement does not purport to be complete and is qualified in its entirety by reference
to the Merger Agreement, which was filed as Exhibit 2.1 to TCFC’s Current Report on Form 8-K filed with the SEC on December 14,
2022, and incorporated into this Item 2.01 by reference.
Item 2.01 |
Completion of Acquisition or Disposition of Assets. |
The
information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item
2.01.
Item 3.01 |
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
On
the Closing Date, TCFC notified the Nasdaq Stock Market LLC (“Nasdaq”) that the Merger had closed and requested that
Nasdaq (i) suspend trading of TCFC Common Stock after the close of trading on June 30, 2023 (ii) withdraw TCFC Common Stock from
listing on Nasdaq prior to the opening of trading on July3, 2023, and (iii) file with the SEC a notification on Form 25 of delisting
of TCFC Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
As a result, TCFC Common Stock is no longer listed on Nasdaq.
Additionally,
SHBI, as successor to TCFC, intends to file with the SEC as promptly as possible a certification on Form 15 requesting the termination
of registration of TCFC Common Stock under Section 12(g) of the Exchange Act and the suspension of TCFC’s reporting obligations
under Sections 13 and 15(d) of the Exchange Act.
The
information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item
3.01.
Item 3.03 |
Material Modification to the Rights of Security Holders. |
At
the Effective Time, each holder of a certificate or book-entry share representing any shares of TCFC Common Stock ceased to have any rights
with respect thereto, except the right to receive the Merger Consideration as described above and subject to the terms and conditions
set forth in the Merger Agreement.
The
information set forth in the Introductory Note, Item 3.01, Item 5.01, Item 5.02 and Item 5.03 of this Current Report on Form 8-K is
incorporated by reference into this Item 3.03.
Item 5.01 |
Changes in Control of Registrant. |
The
information set forth in the Introductory Note, Item 3.01, Item 3.03 and Item 5.02 of this Current Report on Form 8-K is incorporated
by reference into this Item 5.01.
Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
At
the Effective Time, in accordance with the terms of the Merger Agreement, each of TCFC’s directors and executive officers ceased
serving in such capacities and SHBI expanded the size of its board of directors to twenty (20) directors. As previously disclosed,
the eight directors designated by TCFC pursuant to the Merger Agreement, each of whom previously served as a member of the board of directors
of TCFC and CBC, and were appointed by the SHBI Board and the Shore United Board, in each case effective as of the Effective Time, are
as follows: Mary Todd Peterson, Rebecca M. McDonald to Class I, Michael B. Adams, James M. Burke, Austin J. Slater, Jr., Louis P. Jenkins,
Jr. to Class II and Joseph V. Stone, Jr. and E. Lawrence Sanders, III to Class III.
Item 5.03 |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Pursuant
to the terms of the Merger Agreement, as of the Effective Time, the Amended and Restated Articles of Incorporation of TCFC and the Amended
and Restated Bylaws of TCFC ceased to be in effect by operation of law. The Amended and Restated Articles of Incorporation of SHBI and
the Amended and Restated Bylaws of SHBI, as in effect immediately prior to the Effective Time, remained the Amended and Restated Articles
of Incorporation of SHBI (as successor to TCFC by operation of law) and the Amended and Restated Bylaws of SHBI, as amended, in each case
consistent with the terms of the Merger Agreement.
In
connection with the consummation of the Merger, SHBI filed Articles of Amendment with the Maryland State Department of Assessments and
Taxation for the purposes of amending its Amended and Restated Articles of Incorporation to increase the number of authorized shares of
SHBI Common Stock from 35,000,000 to 50,000,000 (the “Articles of Amendment”). The Articles of Amendment became effective
on July 1, 2023, immediately prior to the Effective Time.
Effective immediately prior
to the Effective Time, SHBI’s Amended and Restated By-Laws were amended to provide for the position of Vice Chairman of the SHBI
Board and set forth the duties and responsibilities of the Vice Chairman of the SHBI Board.
The foregoing descriptions
of the Amended and Restated Articles of Incorporation of SHBI, the Articles of Amendment of SHBI and SHBI’s Amended and Restated
By-Laws do not purport to be complete and are qualified in their entirety by reference to the full text of the Amended and Restated Articles,
Articles of Amendment and Second Amended and Restated By-Laws, copies of which are attached hereto as Exhibits 3.1, 3.2 and 3.3, respectively,
to this Current Report and incorporated into this Item 5.03 by reference.
The
information set forth in the Introductory Note of this Current Report on Form 8-K is also incorporated by reference into this
Item 5.03.
On
July 3, 2023, SHBI and TCFC issued a joint press release announcing the completion of the Merger. A copy of the press release is attached
as Exhibit 99.1 to this Current Report and is incorporated into this Item 8.01 by reference.
Item 9.01 |
Financial Statements and Exhibits. |
Exhibit No. |
|
Description |
|
|
2.1 |
|
Agreement
and Plan of Merger, dated as of December 14, 2022, by and between Shore Bancshares, Inc. and The Community Financial Corporation
(incorporated by reference to Exhibit 2.1 to TCFC’s Form 8-K filed with the SEC on December 14, 2022) |
|
|
3.1 |
|
Amended
and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Shore Bancshares, Inc.’s Form 8-K filed
on December 14, 2000) |
|
|
3.2 |
|
Articles
of Amendment of the Amended and Restated Articles of Incorporation of Shore Bancshares, Inc., effective as of July 1, 2023 |
|
|
3.3 |
|
Second
Amended and Restated By-Laws of Shore Bancshares, Inc., dated July 1, 2023 |
|
|
99.1 |
|
Joint
Press release, dated July 3, 2023 |
|
|
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. |
|
(as successor by merger to The Community Financial Corporation) |
|
|
|
|
|
|
|
|
Date: July 3, 2023 |
|
By: |
/s/ James M. Burke |
|
|
|
James M. Burke |
|
|
|
President and Chief Executive Officer |
Exhibit 3.2
Articles of Amendment of Shore Bancshares, Inc.
Shore Bancshares, Inc.,
a Maryland corporation, (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
| 1. | Section (a) of Article FIFTH of the Corporation’s Amended and Restated Articles of
Incorporation is hereby amended and restated in its entirety as follows: |
(a) The total number of shares
of stock of all classes which the Corporation has authority to issue is 50,000,000 shares of capital stock (par value $.01 per share),
amounting in aggregate par value to $500,000. All of such shares are initially classified as “Common Stock”. The Board of Directors
may classify and reclassify any unissued shares of capital stock by setting or changing in any one or more respects the preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such
shares of capital stock. A majority of the entire Board of Directors, without action by the stockholders, may amend the Charter to increase
or decrease the aggregate number of shares of stock or the number of shares of stock of any class that the Corporation has authority to
issue.
| 2. | The amendment to the Corporation’s Amended and Restated Articles of Incorporation was approved by
a majority of the Corporation’s Board of Directors as required by Section 2-105(a)(13) of the Maryland General Corporation
Law. |
| 3. | The Corporation has only one class of shares of authorized common stock. |
| 4. | Immediately before the amendment, the Corporation had authority to issue 35,000,000 shares of capital
stock, par value $.01 per share, amounting in aggregate par value to $350,000. |
| 5. | As amended, the total number of shares of capital stock which the Corporation has authority to issue is
50,000,000, $.01 par value per share, amounting in aggregate par value to $500,000. |
| 6. | These Articles of Amendment shall become effective on July 1, 2023 at 12:01 a.m. upon the acceptance
for record by the State Department of Assessments and Taxation of Maryland. |
* * *
[Signature Page Follows]
IN
WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed in its name on its behalf by its President
and attested to by its Secretary on this 1st day of July, 2023.
|
SHORE BANCSHARES, INC. |
|
|
|
|
|
By: |
/s/ Lloyd L. Beatty, Jr. |
|
|
Lloyd L. Beatty, President and Chief |
|
|
Executive Officer |
ATTEST: |
|
|
|
|
|
/s/ Andrea E. Colender |
|
Andrea E. Colender, Corporate Secretary |
|
[Signature Page to Articles of Amendment]
Exhibit 3.3
SHORE BANCSHARES, INC.
SECOND AMENDED AND RESTATED BY-LAWS
(As of July 1, 2023)
ARTICLE I
STOCKHOLDERS
SECTION 1.
Annual Meeting. A meeting of the stockholders of the Corporation for the election of directors and for the transaction of
any other business of the Corporation shall be held annually at such date and time as the Board of Directors may determine.
SECTION 2.
Special Meetings. Special meetings of the stockholders may be called at any time for any purpose or purposes by the Chairman,
the Vice Chairman, the President, or by a majority of the Board of Directors. Subject to the procedures set forth in Article II,
Section 4 and this Section, special meetings of the stockholders shall be called by the Secretary upon the request in writing of
holders of a majority of all the shares outstanding and entitled to vote on the business to be transacted at such meeting. Such request
shall state the purpose or purposes of the meeting and the matters proposed to be acted upon at it. The Secretary shall provide an estimate
of the cost of preparing and mailing and, upon payment of such cost; the notice of the meeting shall be mailed by the Corporation. Business
transacted at all special meetings of stockholders shall be confined to the purpose or purposes stated in the notice of the meeting. The
Board of Directors shall have the sole power to fix the date and time of the special meeting Nominations of persons for election to the
Board of Directors and the proposal of business to be considered by the stockholders may be made at a special meeting of stockholders
(a) only pursuant to the Corporation's notice of meeting and, (b) in the case of nominations of persons for election to the
Board of Directors, (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation (A) who
was a stockholder of record at the time of giving notice provided for in Article II, Section 4, (B) who is entitled to
vote at the meeting and (C) who complied with the notice procedures set forth in Article II, Section 4.
SECTION 3. Place
of Holding Meetings. All meetings of stockholders shall be held at the principal office of the Corporation or elsewhere in the United
States as designated by the Board of Directors.
SECTION 4.
Notice of Meetings: Waiver of Notice. Written notice of each meeting of the stockholders shall be mailed, postage pre-paid
by the Secretary, to each stockholder entitled to vote thereat at the stockholder's post office address, as it appears upon the books
of the Corporation, at least ten (10) days but not more than ninety (90) days before, the meeting. Each such notice shall state the
place, day, and hour at which the meeting is to be held and, in the case of any special meeting, shall state briefly the purpose or purposes
thereof. Notwithstanding the foregoing provisions, each person who is entitled to notice waives notice if he or she before or after the
meeting signs a waiver of the notice which is filed with the records of stockholders' meetings, or is present at the meeting in person
or by proxy.
SECTION 5.
Quorum. The presence in person or by proxy of the holders of record of a majority of the shares of the capital stock of the
Corporation issued and outstanding and entitled to vote thereat shall constitute a quorum at all meetings of the stockholders, except
as otherwise provided by law, by the Charter or by these By-laws. Whether or not a quorum shall be in attendance at the time for which
the meeting shall have been called, the meeting may be adjourned from time to time by a majority vote of the stockholders present or represented
to a date not more than 120 days after the original date, without any notice other than by announcement at the meeting. At any adjourned
meeting at which a quorum shall attend, any business may be deferred and transacted which might have been transacted if the meeting had
been held as originally called.
SECTION 6.
Organization. Meetings of stockholders shall be presided over by the Chairman of the Board of Directors or, if the Chairman
is not present, the Vice Chairman of the Corporation, or if the Vice Chairman is not present, by the President or a Vice President, or,
if none of said officers is present, by a chairman to be elected at the meeting. The Secretary of the Corporation, or if the Secretary
is not present, any Assistant Secretary shall act as Secretary of such meetings; in the absence of the Secretary and any Assistant Secretary,
the presiding officer may appoint a person to act as Secretary of the meeting.
SECTION 7.
Voting. Unless the Charter provides otherwise, at all meetings of stockholders, every stockholder entitled to vote thereat
shall have one (1) vote for each share of stock standing in the stockholder's name on the books of the Corporation on the date for
the determination of stockholders entitled to vote at such meeting. Such vote may be either in person or by proxy appointed by an instrument
in writing subscribed by such stockholder or the stockholder's duly authorized attorney, bearing a date not more than eleven (11) months
prior to said meeting, unless said instrument provides for a longer period. Such proxy shall be dated, but need not be sealed, witnessed
or acknowledged. All elections shall be had and all questions shall be decided by a majority of the votes cast at a duly constituted meeting,
except as otherwise provided by law, in the Charter or by these By-laws. Notwithstanding, a plurality of all the votes cast at a meeting
at which a quorum is present is sufficient to elect a director.
SECTION 8.
Advance Notice Provisions for Business to be Transacted at Annual Meeting. No business may be transacted at an annual meeting
of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or
at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the
annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly
brought before the annual meeting by any stockholder of the Corporation (i) who is stockholder of record on the date of the giving
of the notice provided for in this Section and on the record date for the determination of stockholders entitled to vote at such
annual meeting and (ii) who complies with the notice procedures set forth in this Section. A stockholder's notice must be delivered
to or mailed and received by the Secretary at the principal executive offices of the Corporation not less than 60 days nor more than 90
days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the
annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the preceding
year's annual meeting, notice by the stockholder must be so delivered not earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day prior to such annual meeting or the tenth day following
the day on which public announcement of the date of such meeting is first made. A stockholder's notice to the Secretary must be in writing
and set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business
desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name
and address of such stockholder as they appear on the Corporation's books and of the beneficial owner, if any, on whose behalf the proposal
is made, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record
by such stockholder and such beneficial owner, (iv) a description of all arrangements or understandings between such stockholder
and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material
interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy
at the annual meeting to bring such business before the meeting. No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the procedures set forth in Article II, Section 4 or in
this Section, provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures,
nothing in Article II, Section 4 nor in this Section shall be deemed to preclude discussion by any stockholder of any such
business. If the chairman of an annual meeting determines that business was not properly brought before the annual meeting in accordance
with the foregoing procedures, the chairman of the meeting shall declare to the meeting that the business was not properly brought before
the meeting and such business shall not be transacted No adjournment or postponement of a meeting of stockholders shall commence a new
period for the giving of notice of a stockholder proposal hereunder.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1.
General Powers. The property and business of the Corporation shall be managed by the Board of Directors of the Corporation.
The Board of Directors shall annually elect a Chairman of the Board of Directors from among its members and shall designate, when
present, either the Chairman of the Board of Directors, Vice Chairman or the President to preside at its meetings.
SECTION 2. Number
of Directors. The Corporation shall have at least one director. The Corporation shall have the number of directors provided in the
Charter until changed as herein provided. Two-thirds of the entire Board of Directors may alter the number of directors set by the Charter
to not exceeding 25 nor less than the minimum number then permitted herein, but the action may not affect the tenure of office of any
director.
SECTlON
3. Election and Term of Office. The Board of Directors shall be divided into classes as described in the
Charter. Each Director shall hold office until the expiration of the term for which the Director is elected, except as otherwise stated
in these By-laws, and thereafter until his or her successor has been elected and qualifies. If the number of Directors is changed, any
increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly equal as
possible, and any additional Director of any class shall, subject to Article II, Section 5 of these By-Laws and to any requirements
or restrictions imposed by the Maryland General Corporation Law, hold office for a term that shall coincide with the remaining term of
that class, but in no case shall a decrease in the number of Directors shorten the term of any incumbent Director. Election of Directors
need not be by written ballot, unless required by these By-Laws.
SECTION 4. Nomination
of Directors. Nomination for election of members of the Board of Directors may be made by the Board of Directors or by any stockholder
of any outstanding class of capital stock of the Corporation entitled to vote for the election of Directors and who complies with the
notice provisions in this Section. Notice by a stockholder of intention to make any nominations shall be made in writing and shall be
delivered or mailed to the Secretary at the principal executive offices of the Corporation (a) in the case of an annual meeting,
not less than 120 days nor more than 180 days prior to the date of the meeting of stockholders called for the election of Directors which,
for purposes of this provision, shall be deemed to be on the same date as the annual meeting of stockholders for the preceding year; provided,
however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the
anniversary date of the preceding year's annual meeting, notice by the stockholder must be so delivered not earlier than the 180th day
prior to such annual meeting and not later than the close of business on the later of the 120th day prior to such annual meeting or the
tenth day following the day on which public announcement of the date of such annual meeting is first made; and (b) in the case of
a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth day
following the day on which notice of the date of the special meeting was mailed or public announcement of the date of the special meeting
was made, whichever first occurs. Such notification shall contain the following information (a) the name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the number of shares of capital stock of the Corporation
owned by each proposed nominee; (d) the name and residence address of the notifying stockholder; ( e) the number of shares
of capital stock of the Corporation owned by the notifying stockholder; (f) the consent in writing of the proposed nominee as to
the proposed nominee's name being placed in nomination for Director; (g) a description of all arrangements or understandings between
such notifying stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are
to be made by such notifying stockholder, (h) a representation that such notifying stockholder intends to appear in person or by
proxy at the meeting to nominate the persons named m its notice; and (i) all information relating to such proposed nominee that would
be required to be disclosed by Regulation 14A under the Securities Exchange Act of 1934, as amended, and Rule 14a-11 promulgated
thereunder, assuming such provisions would be applicable to the solicitation of proxies for such proposed nominee. Nominations not made
in accordance herewith shall be disregarded and, upon the chairman's instructions, the teller shall disregard all votes cast for each
such nominee.
SECTION 5.
Vacancies; Removal of Director. A vacancy on the Board of Directors may be filled only in accordance with the provisions
of the Charter, Any director or the entire Board of Directors may be removed only in accordance with the provisions of Maryland law.
SECTION 6.
Place of Meeting. The Board of Directors may hold their meetings and have one or more offices, and keep the books of the
Corporation, either within or outside the State of Maryland, at such place or places as they may from time to time determine by resolution
or by written consent of all the directors. The Board of Directors may hold their meetings by conference telephone or other similar electronic
communications equipment in accordance with the provisions of Maryland General Corporation Law
SECTION 7.
Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from
time to time be determined by resolution of the Board, provided that notice of every resolution of the Board fixing or changing the time
or place for the holding of regular meetings of the Board shall be mailed to each director at least three (3) days before the first
meeting held in pursuance thereof. The annual meeting of the Board of Directors shall be held immediately following the annual stockholders'
meeting at which a Board of Directors is elected. Any business may be transacted at any regular meeting of the Board.
SECTION 8.
Special Meetings. Special meetings of the Board of Directors shall be held whenever called by direction of the Chairman,
or the Vice Chairman, and must be called by the Chairman, the Vice Chairman, the President or the Secretary upon written request of a
majority of the Board of Directors, by mailing the same at least two (2) days prior to the meeting, or by personal delivery, facsimile
transmission, telegraphing or telephoning the same on the day before the meeting, to each director; but such notice may be waived by any
director. A special meeting of the Board of Directors shall be held on such date and at any place as may be designated from time to time
by the Board of Directors. Unless otherwise indicated in the notice thereof, any and all business may be transacted at any special meeting.
At any meeting at which every director shall be present, even though without notice, any business may be transacted and any director may
in writing waive notice of the time, place and objects of any special meeting.
SECTION 9.
Quorum. A majority of the whole number of directors shall constitute a quorum for the transaction of business at all meetings
of the Board of Directors, but, if at any meeting less than a quorum shall be present, a majority of those present may adjourn the meeting
from time to time, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the
Board of Directors, except as may be otherwise specifically provided by law or by the Corporation's Charter or by these By-laws.
SECTION 10. Compensation
of Directors. Directors may receive a fixed sum and expenses for attendance at regular and special meetings and committee meetings,
or any combination of the foregoing as may be determined from time to time by the Board of Directors, and nothing contained herein shall
be construed to preclude any Director from serving the Corporation in any other capacity and receiving compensation therefore.
SECTION 11.
Advisory Directors. The Board of Directors may by resolution appoint advisory directors to the Board of Directors, who may
also serve as directors emeriti, and shall have such authority and receive such compensation and reimbursement as the Board of Directors
shall provide. Advisory directors or directors emeriti shall not have the authority to participate by vote in the transaction of business.
SECTION 12.
Committees. The Board of Directors may appoint from among its members an Executive Committee, an Audit Committee, a Compensation
Committee, a Nominating Committee, and other committees composed of one or more directors and delegate to these committees any of the
powers of the Board of Directors, except the power to authorize dividends on stock, elect directors, issue stock other than as provided
in the next sentence, recommend to the stockholders any action which requires stockholder approval, amend these By-Laws, or approve any
merger or share exchange which does not require stockholder approval. If the Board of Directors has given general authorization for the
issuance of stock providing for or establishing a method or procedure for determining the maximum number of shares to be issued, a committee
of the Board of Directors, in accordance with that general authorization or any stock option or other plan or program adopted by the Board
of Directors, may authorize or fix the terms of stock subject to classification or reclassification and the terms on which any stock may
be issued, including all terms and conditions required or permitted to be established or authorized by the Board of Directors.
SECTION 13.
Committee Procedure. Each committee may fix rules of procedure for its business. A majority of the members
of a committee shall constitute a quorum for the transaction of business and the act of a majority of those present at a meeting at which
a quo mm is present shall be the act of the committee. The members of a committee present at any meeting, whether or not they constitute
a quorum, may appoint a director to act in the place of an absent member. Any action required or permitted to be taken at a meeting of
a committee may be taken without a meeting, if a unanimous written consent which sets forth the action is signed by each member of the
committee and filed with the minutes of the committee.
SECTION 14.
Emergency. In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs
and business of the Corporation by its directors and officers as contemplated by the Charter and these By-Laws, any two or more available
members of the then incumbent Executive Committee shall constitute a quorum of that Committee for the full conduct and management of the
affairs and business of the Corporation in accordance with the provisions of Article II, Section 13. In the event of the unavailability,
at such time, of a minimum of two members of the then incumbent Executive Committee, the available directors shall elect an Executive
Committee consisting of any two members of the Board of Directors, whether or not they be officers of the Corporation, which two members
of the Board of Directors, whether or not they be officers of the Corporation, which two members shall constitute the Executive Committee
for the full conduct and management of the affairs of the Corporation in accordance with the foregoing provisions of this Section. This
Section shall be subject to implementation by resolution of the Board of Directors passed from time to time for that purpose, and
any provisions of these By-Laws (other than this Section) and any resolutions which are contrary to the provisions of this Section or
to the provisions of any such implementary resolutions shall be suspended until it shall be determined by any Interim Executive Committee
acting under this Section that it shall be to the advantage of the Corporation to resume the conduct and management of its affairs
and business under all the other provisions of these By-Laws.
ARTICLE III
OFFICERS
SECTION 1.
Election, Tenure, and Compensation. The officers of the Corporation shall be a President, one or more Vice-Presidents
(if so elected by the Board of Directors), a Secretary, and a Treasurer. The Board of Directors may elect such other officers as it may
from time to time consider necessary or appropriate for the proper conduct of the business of the Corporation. The Board may also have
a Chairman and Vice Chairman of the Board. The officers shall be elected annually by the Board of Directors at its first meeting following
the annual meeting of the stockholders and shall have such powers and duties as may be set forth in these By-Laws or conferred upon or
assigned to them from time to time by the Board of Directors. The Chairman or Vice Chairman, if one or both are elected, shall be a director
and the other officers may, but need not be, directors. Any two or more of the above officers, except those of Chairman and Vice Chairman
and President and Vice President, respectively, may be held by the same person, but no officer shall execute, acknowledge, or verify any
instrument in more than one capacity if such instrument is required by law or by these By-Laws to be executed, acknowledged or verified
by any two or more officers. The compensation or salary paid all officers of the Corporation shall be fixed by resolutions adopted by
the Board of Directors.
Except where otherwise expressly
provided in a contract duly authorized by the Board of Directors, all officers of the Corporation shall be subject to removal at any time
by the affirmative vote of a majority of the Board of Directors. All employees and agents of the Corporation shall hold such positions
at the discretion of the Board of Directors or of the officers appointing them.
SECTION 2.
Powers and Duties of the Chairman and the Vice Chairman. The Chairman, if one be elected, shall preside at all meetings of
the stockholders and of the Board of Directors. The Chairman shall be ex-officio a member of all the standing committees of the Board
of Directors. The Chairman shall do and perform such other duties as may from time to time be assigned to the Chairman by the Board of
Directors. The Vice Chairman, if one be elected, in the absence of the Chairman, shall assume the duties of the Chairman and preside at
all meetings of the stockholders and of the Board of Directors, and shall perform such other duties and have such other powers as are
from time to time assigned to him or her by the Chairman or the Board of Directors.
SECTION 3.
Powers and Duties of the President. The President shall, unless the Board of Directors so empowers another person, be the
chief executive officer of the Corporation and shall supervise the carrying out of the policies adopted or approved by the Board of Directors.
The President shall have general executive powers and duties, including, without limitation, general charge and control of the Corporation’s
business affairs and properties and general powers and duties of supervision and management usually vested in the office of President
of a corporation. The President shall also have such specific powers and duties as may be conferred upon or assigned to the President
from time to time by the Board of Directors. The President may sign and execute all authorized bonds, contracts, obligations and other
instruments and documents in the name of the Corporation.
SECTION 4.
Powers and Duties of the Vice President. The Board of Directors may elect one or more Vice Presidents. Any Vice President
(unless otherwise provided by resolution of the Board of Directors) may sign and execute all authorized bonds, contracts, or other obligations
in the name of the Corporation. Each Vice President shall have such other powers and shall perform such other duties as may be assigned
to the Vice President by the Board of Directors or by the Chairman or the President. In case of the absence or disability of the President,
the duties of that office shall be performed by any Vice President, and the taking of any action by such Vice President in place of the
President shall be conclusive evidence of the absence or disability of the President.
SECTION 5.
Secretary. The Secretary shall give, or cause to be given, notice of all meetings of stockholders and directors and all other
notices required by law or by these By-laws, and in case of the Secretary's absence or refusal or neglect to do so, any such notice may
be given by any person thereunto directed by the Chairman or the President, or by the directors or stockholders upon whose written requisition
the meeting is called as provided in these By-laws. The Secretary shall record all the proceedings of the meetings of the stockholders
and of the directors in books provided for that purpose, and shall perform such other duties as may be assigned to him by the directors,
the Chairman, or the President. The Secretary shall have custody of the seal of the Corporation and shall affix the same to all instruments
requiring it, when authorized by the Board of Directors, the Chairman, or the President, and attest the same. In general, the Secretary
shall perform all the duties generally incident to the office of Secretary, subject to the control of the Board of Directors, the Chairman,
and the President.
SECTION 6.
Treasurer. The Treasurer shall have custody of all the funds and securities of the Corporation, and shall keep full and accurate
account of receipts and disbursements in books belonging to the Corporation, The Treasurer shall deposit all moneys and other valuables
in the name and to the credit of the Corporation in such depository or depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such
disbursements. The Treasurer shall render to the Chairman, the President and the Board of Directors, whenever any of them so requests,
an account of all transactions as Treasurer and of the financial condition of the Corporation. The Treasurer shall give the Corporation
a bond, if required by the Board of Directors, in a sum, and with one or more sureties, satisfactory to the Board of Directors, for the
faithful performance of the duties of the office and for the restoration to the Corporation in case of the Treasurer's death, resignation,
retirement or removal from office of all books, papers, vouchers, moneys, and other properties of whatever kind in the Treasurer's possession
or under the Treasurer's control belonging to the Corporation. The Treasurer shall perform all the duties generally incident to the office
of the Treasurer, subject to the control of the Board of Directors, the Chairman, and the President.
SECTION 7.
Assistant Secretary. The Board of Directors may appoint an Assistant Secretary or more than one Assistant Secretary. Each
Assistant Secretary shall (except as otherwise provided by resolution of the Board of Directors) have power to perform all duties of the
Secretary in the absence or disability of the Secretary and shall have such other powers and shall perform such other duties as may be
assigned by the Board of Directors, the Chairman, or the President. In case of the absence or disability of the Secretary, the duties
of the office shall be performed by any Assistant Secretary, and the taking of any action by any such Assistant Secretary in place of
the Secretary shall be conclusive evidence of the absence or disability of the Secretary.
SECTION 8.
Assistant Treasurer. The Board of Directors may appoint an Assistant Treasurer or more than one Assistant Treasurer. Each
Assistant Treasurer shall (except as otherwise provided by resolution of the Board of Directors) have power to perform all duties of the
Treasurer in the absence or disability of the Treasurer and shall have such other powers and shall perform such other duties as may be
assigned by the Board of Directors, the Chairman or the President. In case of the absence or disability of the Treasurer, the duties of
the office shall be performed by any Assistant Treasurer, and the taking of any action by any such Assistant Treasurer in place of the
Treasurer shall be conclusive evidence of the absence or disability of the Treasurer.
ARTICLE IV
CAPITAL STOCK
SECTION 1.
Issue of Certificates of Stock. The certificates for shares of the stock of the Corporation shall be of such form not inconsistent
with the Charter, or its amendments, as shall be approved by the Board of Directors. All certificates shall be signed by the Chairman,
the Vice Chairman, the President or by any Vice President and counter-signed by the Secretary, an Assistant Secretary, Treasurer or Assistant
Treasurer, and sealed with the seal of the Corporation. All certificates for each class of stock shall be consecutively numbered. The
name of the person owning the shares issued and the address of the holder, shall be entered in the Corporation's books. All certificates
surrendered to the Corporation for transfer shall be canceled and subject to SECTION 3 of ARTICLE IV, no new certificates representing
the same number of shares shall be issued until the former certificate or certificates for the same number of shares shall have been so
surrendered, and canceled, unless a certificate of stock be lost or destroyed, in which event another may be issued in its stead upon
proof of such loss or destruction and the giving of a satisfactory bond of indemnity not exceeding an amount double the value of the stock.
Both such proof and such bond shall be in a form approved by the general counsel of the Corporation and by the Transfer Agent of the Corporation
and by the Registrar of the stock.
SECTION 2.
Transfer of Shares. Subject to SECTION 3 of this ARTICLE IV, shares of the capital stock of the Corporation shall
be transferred on the books of the Corporation only by the holder thereof in person or by the holder's attorney upon surrender and cancellation
of certificates for a like number of shares as hereinbefore provided.
SECTION 3.
Uncertificated Stock. Notwithstanding any other provision of these By-laws, the Board of Directors may adopt a system of
issuance, recordation and transfer of shares of stock of the Corporation by electronic or other means not involving any issuance of certificates,
including provisions for notice to purchasers in substitution for any required statements on certificates, and as may be required by applicable
corporate securities laws, which system has been approved by the United States Securities and Exchange Commission. Any system so adopted
shall not become effective as to issued and outstanding certificated shares until the certificates therefor have been surrendered to the
Corporation.
SECTION 4.
Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares of stock
as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share
in the name of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the Laws
of Maryland.
SECTION 5. Closing
Transfer Books. The Board of Directors may fix the period, not exceeding twenty (20) days, during which time the books of the Corporation
shall be closed against transfers of stock, or, in lieu thereof, the Directors may fix a date not less than ten (10) days nor more
than sixty (60) days preceding the date of any meeting of stockholders or any dividend payment date or any date for the allotment of rights,
as a record date for the determination of the stockholders entitled to notice of and to vote at such meeting or to receive such dividends
or rights as the case may be; and only stockholders of record on such date shall be entitled to notice of and to vote at such meeting
or to receive such dividends or rights as the case may be.
SECTION 6.
Lost Stock Certificates. The Board of Directors may determine the conditions for issuing a new stock certificate in place
of one which is alleged to have been lost, stolen, or destroyed, or the Board of Directors may delegate such power to any officer or officers
of the Corporation. In their discretion, the Board of Directors or such officer or officers may require the owner of the certificate
to give bond, with sufficient surety, to indemnify the Corporation against any loss or claim arising as a result of the issuance of a
new certificate. In their discretion, the Board of Directors or such officer or officers may refuse to issue such new certificate save
upon the order of some court having jurisdiction in the premises.
SECTION 7.
Exemption from Control Share Acquisition Statute. The provisions of Sections 3-701 to 3-709 of the Maryland General Corporation
Law shall not apply to any share of the capital stock of the Corporation. Such shares of capital stock are exempted from such Sections
to the fullest extent permitted by Maryland law.
ARTICLE V
BANK ACCOUNTS AND LOANS
SECTION 1.
Bank Accounts. Such officers or agents of the Corporation as from time to time shall be designated by the Board of Directors
shall have authority to deposit any funds of the Corporation in such banks or trust companies as shall from time to time be designated
by the Board of Directors and such officers or agents as from time to time authorized by the Board of Directors may withdraw any or all
of the funds of the Corporation so deposited in any bank or trust or trust company, upon checks, drafts or other instruments or orders
for the payment of money, drawn against the account or In the name or behalf of this Corporation, and made or signed by such officers
or agents; and each bank or trust company with which funds of the Corporation are so deposited is authorized to accept, honor, cash and
pay, without limit as to amount, all checks, drafts or other instruments or orders for the payment of money, when drawn, made or signed
by officers or agents so designated by the Board of Directors until written notice of the revocation of the authority of such officers
or agents by the Board of Directors shall have been received by such bank or trust company. There shall from time to time be certified
to the banks or trust companies in which funds of the Corporation are deposited, the signature of the officers or agents of the Corporation
so authorized to draw against the same. In the event that the Board of Directors shall fail to designate the persons by whom checks, drafts
and other instruments or orders for the payment of money shall be signed, as hereinabove provided in this Section, all of such checks,
drafts and other instruments or orders for the payment of money shall be signed by the Chairman, the President or a Vice President and
counter-signed by the Secretary or Treasurer or an Assistant Secretary or an Assistant Treasurer of the Corporation.
SECTION 2.
Loans. Such officers or agents of the Corporation as from time to time shall be designated by the Board of Directors shall
have authority to effect loans, advances or other forms of credit at any time or times for the Corporation from such banks, trust companies,
institutions, corporations, firms or persons as the Board of Directors shall from time to time designate, and as security for the repayment
of such loans, advances, or other forms of credit to assign, transfer, endorse, and deliver, either originally or in addition or substitution,
any or all stock, bonds, rights, and interests of any kind in or to stocks or bonds, certificates of such rights or interests, deposits,
accounts, documents covering merchandise, bills and accounts receivable and other commercial paper and evidences or debt at any time held
by the Corporation; and for such loans, advances, or other forms of credit to make, execute and deliver one or more notes, acceptances
or written obligations of the Corporation on such terms, and with such provisions as to the security or sale or disposition thereof as
such officers or agents shall deem proper; and also to sell to, or discount or rediscount with, such banks, trust companies, institutions,
corporations, firms or persons any and all commercial paper, bills receivable, acceptances and other instruments and evidences of debt
at any time held by the Corporation, and to that end to endorse, transfer and deliver the same. There shall from time to time be certified
to each bank, trust company, institution, corporation, firm or person so designated the signature of the officers or agents so authorized;
and each bank, trust company, institution, corporation, firm or person is authorized to rely upon such certification until written notice
of the revocation by the Board of Directors of the authority of such officers or agents shall be delivered to such bank, trust company,
institution, corporation, firm or person.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 1. Fiscal
Year. The fiscal year of the Corporation shall begin on the first day of January of each year.
SECTION 2.
Notices. Whenever, under the provisions of these By-laws, notice is required to be given to any director, officer or stockholder,
unless otherwise provided in these By-laws, such notice shall be deemed given if in writing, and personally delivered, or sent by telefax,
or telegram, or by mail, by depositing the same in a post office or letter box, in a postpaid sealed wrapper, addressed to each stockholder,
officer or director, as the case may be, at such address as appears on the books of the Corporation, and such notice shall be deemed to
be given at the time the same is so personally delivered, telefaxed, telegraphed or so mailed. Any stockholder, director or officer may
waive any notice required to be given under these By-laws.
SECTION 3.
Voting Upon Stocks. Unless otherwise ordered by the Board of Directors, the President and the Vice President, or any of them,
shall have full power and authority on behalf of the Corporation to attend and to vote and to grant proxies to be used at any meetings
of stockholders of any corporation in which the Corporation may hold stock. The Board of Directors, however, may by resolution appoint
some other person to vote such shares, in which case such person shall be entitled to vote such shares upon the production of a certified
copy of such resolution.
ARTICLE VII
AMENDMENT OF BY-LAWS
In accordance with the Charter,
these By-Laws may be repealed, altered, amended or rescinded and new by-laws may be adopted (a) by the stockholders of the Corporation
(considered for this purpose as one class) by the affirmative vote of not less than a majority of all the votes entitled to be cast by
the outstanding shares of capital stock of the Corporation generally in the election of directors which are cast on the matter at any
meeting of the stockholders called for that purpose (provided that notice of such proposal is included in the notice of such meeting)
or (b) by the Board of Directors by the affirmative vote of not less than two-thirds of the Board of Directors at a meeting held
in accordance with the provisions of these By-Laws.
ARTICLE VIII
INDEMNIFICATION
SECTION 1.
Definitions. As used in this Article VIII, any word or words that are defined in Section 2-418 of the Corporations
and Associations Article of the Annotated Code of Maryland (the "Indemnification Section"), as amended from time to time,
shall have the same meaning as provided in the Indemnification Section.
SECTION 2.
Indemnification of Directors and Officers. The Corporation shall indemnify and advance expenses to a director or officer
of the Corporation in connection with a proceeding to the fullest extent permitted by and in accordance with the Indemnification Section.
Notwithstanding the foregoing, the Corporation shall be required to indemnify a director or officer in connection with a proceeding commenced
by such director or officer against the Corporation or its directors or officers only if the proceeding was authorized by the Board of
Directors.
SECTION 3.
Indemnification of Other Agents and Employees. With respect to an employee or agent, other than a director or officer of
the Corporation, the Corporation may, as determined by and in the discretion of the Board of Directors of the Corporation, indemnify and
advance expenses to such employees or agents in connection with a proceeding to the extent permitted by and in accordance with the Indemnification
Section.
Exhibit 99.1
Shore Bancshares, Inc. and The Community Financial
Corporation
Complete Merger
Easton, MD., - July 3, 2023 – Shore
Bancshares, Inc. (NASDAQ: SHBI) (“SHBI”), the financial holding company of Shore United Bank, N.A. (“Shore
United”), and The Community Financial Corporation (“TCFC”), the bank holding company of Community Bank of
the Chesapeake (“CBC”), announced today the closing of their previously announced merger of equals, combining the two
premier banks to create one of Maryland’s top community banks.
Lloyd L. “Scott” Beatty, Jr., former
President and Chief Executive Officer of SHBI, commented, “Bringing together two of Maryland’s leading community banks is
a historic achievement and holds enormous potential to benefit our customers and the communities we serve, as well as to drive shareholder
value and our company’s long-term growth. I’m especially proud of our organizations’ management teams whose hard work,
perseverance, and truly collaborative spirit made this combination of like-minded banks possible.”
“We have great respect for Scott, his management
team and the significant organic and strategic growth built through his tenure,” said James M. Burke, President and Chief Executive
Officer of the combined company. “I am proud to succeed Scott and to lead the combined management team. We have a tremendous opportunity
to deliver enhanced shareholder returns by building upon our combined bank’s commitment to the success and prosperity of all
our stakeholders. We will execute a business strategy with a focus on delivering exceptional customer service and increasing shareholder
value while continuing to honor our community values.”
The combined organization has approximately $6.0
billion in assets with approximately $4.5 billion in loans and $5.1 billion in deposits throughout its operations through locations spanning
Maryland, Virginia and Delaware. All branches of the combined company will operate under the Shore United banner once the integration
is completed. SHBI’s and Shore United’s corporate headquarters remain in Easton, Maryland. The combined company will trade
under SHBI’s ticker symbol (SHBI) on the Nasdaq Global Select Stock Market.
Customers Should Continue to Bank as They Normally Do
CBC will initially operate under both the CBC
and Shore United brands, and customers will continue to conduct business through their respective CBC and Shore United branches, websites
and mobile apps. The combined company expects to combine its systems and services in the third quarter of 2023. CBC customers can find
additional information at http://www.cbtc.com/landing-pages/sub-merge/, and Shore United customers can find additional information
at www.shoreunitedbank.com.
Board of Directors
The combined company’s Board of Directors
consists of 20 members, with 12 directors from SHBI and eight directors from TCFC:
·
Alan J. Hyatt (Chair)
·
Austin J. Slater, Jr. (Vice Chair)
·
Michael B. Adams
·
James M. Burke
·
R. Michael Clemmer, Jr.
·
William E. Esham, III
·
Louis P. Jenkins, Jr.
·
David S. Jones
·
James A. Judge
·
Clyde V. Kelly, III
·
John A. Lamon
·
Frank E. Mason, III
·
Rebecca M. McDonald
·
David W. Moore
·
Mary Todd Peterson
·
E. Lawrence Sanders, III
·
Joseph V. Stone, Jr.
·
Esther A. Streete
·
Konrad M. Wayson
·
Dawn M. Willey
Closing Details
At the effective time of the merger on July 1,
2023, each share of TCFC common stock was converted in the right to receive 2.3287 shares of SHBI common stock, with TCFC shareholders
receiving cash in lieu of fractional shares. Former TCFC shareholders collectively represent approximately 40% of the combined company.
Shares of TCFC common stock ceased trading prior to the opening of the Nasdaq Global Select Stock Market on July 3, 2023.
Advisors
Keefe, Bruyette & Woods, A Stifel Company,
acted as financial advisor to SHBI in the transaction and delivered a fairness opinion to the Board of Directors of SHBI. Holland &
Knight LLP served as legal counsel to SHBI. Piper Sandler & Co. acted as financial advisor to TCFC and delivered a fairness opinion
to the Board of Directors of TCFC. Kilpatrick Townsend & Stockton LLP served as legal counsel to TCFC.
About Shore Bancshares,
Inc.
SHBI is the largest independent
financial holding company headquartered on the Eastern Shore of Maryland. It is the parent company of Shore United. Shore United operates
30 full-service branches, 32 ATMs, 5 loan production offices, and provides a full range of commercial and consumer banking products and
services to individuals, businesses, and other organizations in Anne Arundel County, Baltimore County, Caroline County, Dorchester County,
Howard County, Kent County, Queen Anne’s County, Talbot County and Worcester County in Maryland, Kent County and Sussex County in
Delaware and in Accomack County, Virginia. SHBI engages in trust and wealth management services through Wye Financial Partners, a division
of Shore United.
FORWARD-LOOKING STATEMENTS
This Press Release contains “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results
of operations, business plans and the future performance of SHBI. Words such as “anticipates,” “believes,” “estimates,”
“expects,” “forecasts,” “intends,” “plans,” “projects,” “could,”
“may,” “should,” “will” or other similar words and expressions are intended to identify these forward-looking
statements. These forward-looking statements are based on SHBI’s current expectations and assumptions regarding SHBI’s and
TCFC’s business, the economy, and other future conditions. While there is no assurance that any list of risks and uncertainties
or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied
in the forward-looking statements: changes in general economic, political, or industry conditions; geopolitical concerns, including the
ongoing war in Ukraine; the possibility that the anticipated benefits of the Merger are not realized when expected or at all, including
as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy
and competitive factors in the areas where SHBI and TCFC do business; the possibility that revenues following the Merger may be lower
than expected; the ability to complete integration of SHBI and TCFC successfully; the dilution caused by SHBI’s issuance of additional
shares of its capital stock in connection with the Merger; uncertainty in U.S. fiscal and monetary policy, including the interest rate
policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations;
volatility and disruptions in global capital and credit markets; the transition away from USD LIBOR and uncertainty regarding potential
alternative reference rates, including SOFR; competitive pressures on product pricing and services; success, impact, and timing of our
business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies,
laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory
bodies; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to
combat cybersecurity at a state, national, or global level; and other factors that may affect our future results. Further information
regarding SHBI, TCFC and factors which could affect the forward-looking statements contained herein can be found in SHBI’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2022, its Quarterly Report on Form 10-Q for the period ended March 31, 2023,
and its other filings with the SEC, and in TCFC’s Annual Report on Form 10-K and Amendment No. 1 to TCFC’s Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2022, TCFC’s Quarterly Report on Form 10-Q for the period ended March 31, 2023
and its other filings with the SEC. SEC filings are available free of charge on the SEC's website at www.sec.gov.
For additional information or questions, please contact:
Donna J. Stevens
Chief Operating Officer
Shore Bancshares, Inc.
(410) 763-7800
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