Subsequent Events

3 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

Subsequent Events

NOTE 12:  SUBSEQUENT  EVENTS

On April 27, 2015 Merchants Bancshares, Inc. (“Merchants”) announced the signing of a definitive agreement pursuant to which Merchants Bancshares, Inc. will acquire NUVO Bank & Trust Company (“NUVO) for approximately $21.8 million in stock and cash, which represents $7.15 per share. 

Under the terms of the agreement, shareholders of NUVO will be entitled to elect to receive either 0.2416 shares of Merchants common stock or $7.15 in cash for each share of NUVO common stock outstanding, subject to total consideration being comprised of approximately 75% stock and 25% cash. Holders of NUVO common stock options will receive a cash payment for the difference between $7.15 and the exercise price of the option, while warrant holders of NUVO may either be cashed out in a similar fashion or receive an equivalent warrant to acquire Merchants stock. The merger price of $7.15 per share is equivalent to approximately 133% of NUVO’s tangible book value at December 31, 2014 and 51.9 times NUVO’s last twelve months’ earnings.

The agreement has been approved by both of the Boards of Directors of Merchants and NUVO. The closing is anticipated to occur during the fourth quarter of 2015, subject to approval by NUVO shareholders, receipt of required regulatory approvals and other customary closing conditions. Merchants expects the transaction to be accretive to its earnings in the first full year of combined operations. 

For further information, reference is made to the Form 8-K filed by the Company with the SEC on April 27, 2015.