Summit Financial Group in Moorefield, W.Va., has agreed to buy PSB Holding in Preston, Md.
The $3.9 billion-asset Summit said in a press release that it will pay $53.9 million in stock for the $594 million-asset parent of Provident State Bank. The deal is expected to close in the second quarter.
“This transaction represents an exceptional opportunity for Summit to combine with a financially strong and exceptionally well-managed bank possessing a culture and core values similar to ours, as well as the same commitment to build long-term client relationships,” H. Charles Maddy III, Summit’s president and CEO, said in the release.
The acquisition “not only further expands Summit’s community banking footprint to the eastern Shore of Maryland and Delaware, but also permits both PSB’s and Summit’s clients the added convenience of enhanced banking services at more locations,” Maddy added.
Summit expects to incur $3.9 million of merger-related expenses. It plans to cut about 25% of PSB’s annual noninterest expenses.
The deal should be 4.5% accretive to Summits 2023 earnings per share, and 9.7% accretive the next year. Summit said it should take a little more than three years to earn back an estimated 7% dilution to its tangible book value.
PSB was advised by Piper Sandler and Holland & Knight. Summit was advised by Bowles Rice.