Burke & Herbert Financial Services in Alexandria, Va., has agreed to buy Summit Financial Group in Moorefield, W.Va.
The $3.6 billion-asset Burke & Herbert said in a press release that it will pay $371.5 million in stock for the $4.5 billion-asset Summit. The deal is expected to close in the first quarter.
The combined entity, which will retain the Burke & Herbert name, will be equally owned by each company’s shareholders and the 16-member board will be evenly split.
The company, which will be based in Alexandria, will have $8 billion of assets and more than 75 branches in five states. The transaction is expected to result in combined earnings per share of about $7.90 in the first full year of combined operations.
The companies also said they will create a $5 million community foundation to ensure support of Summit’s communities.
“This partnership brings together two organizations dedicated to a community banking model that places an emphasis on service and dedication to the people who live and work among us,” David Boyle, Burke & Herbert’s chairman, president and CEO, said in the release.
Charlie Maddy, Summit’s president and CEO, will become Burke & Herbert’s president and join the board. Oscar Bean, Summit’s chairman, will become vice chairman.
Burke & Herbert plans to cut about 11% of the combined company’s annual noninterest expenses. It expects to incur $45.5 million of merger-related expenses.
Keefe, Bruyette & Woods and Troutman Pepper Hamilton Sanders advised Burke & Herbert. D.A. Davidson and Bowles Rice advised Summit.