ANNAPOLIS, Md., April 29, 2021 /PRNewswire/ --
Filed by Severn Bancorp, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
And deemed filed pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Severn Bancorp, Inc.
Commission File No. 000-49731
Dear Severn Bancorp Stockholder,
Severn Bancorp, Inc., the parent company of Severn Bank, has
traditionally held its annual stockholders meeting in the spring.
This year, the annual meeting has been postponed – and may not be
held at all.
Severn Bancorp, Inc. entered into a merger agreement with Shore
Bancshares, Inc., the parent company of Shore United Bank. This
will bring Severn Bank and Shore United Bank together.
We will have an expanded community banking franchise, growing
assets from $1 billion to
$3 billion.
In addition to Severn's 7
branches in Anne Arundel County,
we will have an additional 22 branches throughout the Eastern Shore
of Maryland, Delaware, the Eastern Shore of Virginia, Baltimore
County, and Howard County.
The combined financial strength and size of the merged banks will
enhance the experience of our collective customers, and the
combined organization will be a formidable community bank dedicated
to the neighborhoods we serve.
We anticipate closing the transaction in the third quarter of
2021. Prior to closing, we will have a special meeting of the
stockholders, to consider and vote on the transaction. If for
whatever reason it appears that the transaction will not occur in
2021, we will hold an annual stockholders meeting toward the end of
the year.
You can access additional information about the merger, free of
charge, at the SEC's website, www.sec.gov, or by accessing Severn
Bank's website at www.severnbank.com under the "Severn Bank
Investors Relation" link, and then under the heading "SEC Filings"
and "Documents."
Very truly yours,
Alan J. Hyatt
FORWARD-LOOKING STATEMENTS
This letter 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 Severn Bancorp, Inc.
("Severn") and Shore Bancshares,
Inc. ("Shore"). 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 Shore's
and Severn's current expectations
and assumptions regarding Shore's and Severn's businesses, the economy, and other
future conditions. Because forward-looking statements relate to
future results and occurrences, they are subject to inherent
uncertainties, risks, and changes in circumstances that are
difficult to predict. Any number of risks, uncertainties or other
factors such as the COVID 19 pandemic could affect Severn's or Shore's future financial results
and performance and could cause actual results or performance to
differ materially from anticipated results or performance. Such
risks and uncertainties include, among others: the occurrence of
any event, change or other circumstances that could give rise to
the right of one or both of the parties to terminate the definitive
agreement and plan of merger between Severn and Shore; the outcome of any legal
proceedings that may be instituted against Severn or Shore; delays in completing the
transaction; the failure to obtain necessary regulatory approvals
(and the risk that such approvals may result in the imposition of
conditions that could adversely affect the combined company or the
expected benefits of the transaction) or shareholder approvals, or
to satisfy any of the other conditions to the transaction on a
timely basis or at all; the possibility that the anticipated
benefits of the transaction 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
Severn and Shore do business; the
possibility that the transaction may be more expensive to complete
than anticipated, including as a result of unexpected factors or
events; diversion of management's attention from ongoing business
operations and opportunities; potential adverse reactions or
changes to business or employee relationships, including those
resulting from the announcement or completion of the transaction;
the ability to complete the transaction and integration of
Severn and Shore successfully; and
the dilution caused by Shore's issuance of additional shares of its
capital stock in connection with the transaction. Except to the
extent required by applicable law or regulation, each of
Severn and Shore disclaims any
obligation to update such factors or to publicly announce the
results of any revisions to any of the forward-looking statements
included herein to reflect future events or developments. Further
information regarding Severn,
Shore and factors which could affect the forward-looking statements
contained herein can be found in Severn's Annual Report on Form 10-K for
the fiscal year ended December 31, 2020 and its other filings
with the SEC, and in Shore's Annual Report on Form 10-K for
the fiscal year ended December 31, 2020 and its other filings
with the SEC. SEC filings are available free of charge on the
SEC's website at www.sec.gov.
Additional Information About the Merger and Where to Find
It
This letter does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval with respect to the proposed transaction.
In connection with the proposed merger transaction, a
registration statement on Form S-4 will be filed with the SEC
that will include a joint proxy statement of Severn and Shore and a prospectus of Shore,
which will be distributed to the shareholders of Severn and Shore in connection with their
votes on the merger of Severn with
and into Shore and the issuance of Shore common stock in the
transaction. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ
THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS
WHEN THEY BECOME AVAILABLE (AND ANY OTHER DOCUMENTS FILED WITH THE
SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE
INTO THE JOINT PROXY STATEMENT/PROSPECTUS) BECAUSE SUCH DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER
AND RELATED MATTERS. Investors and security holders will be able to
obtain these documents, and any other documents Severn and Shore have filed with the SEC, free
of charge at the SEC's website, www.sec.gov, or by
accessing Shore's website at www.shorebancshares.com under the
"Investor Relations" link and then under the heading "Documents,"
or by accessing Severn's website
at www.severnbank.com under the "Severn Bank Investors
Relation" link and then under the heading "SEC Filings" and
"Documents." In addition, documents filed with the SEC by Shore or
Severn will be available free of
charge by (1) writing Shore at 18 East Dover Street,
Easton, MD 21601, Attention:
Edward C. Allen, or (2) writing
Severn at 200 Westgate Circle,
Suite 200, Annapolis, MD
21404, Attention: Vance Adkins.
Participants in the Solicitation
The directors, executive officers and certain other members of
management and employees of Severn
may also be deemed to be participants in the solicitation of
proxies in connection with the proposed transaction from the
shareholders of Severn.
Information about the directors and executive officers of
Severn is included in the proxy
statement for its 2020 annual meeting of Severn shareholders, which was filed with the
SEC on April 10, 2020.
The directors, executive officers and certain other members of
management and employees of Shore may be deemed to be participants
in the solicitation of proxies from the shareholders of Shore in
connection with the proposed transaction. Information about Shore's
directors and executive officers is included in the proxy statement
for its 2021 annual meeting of Shore's shareholders, which was
filed with the SEC on March 26, 2021.
Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the transaction may be obtained by reading the joint proxy
statement/prospectus regarding the proposed merger when it becomes
available. Free copies of this document may be obtained as
described above.
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SOURCE Severn Bancorp, Inc.