Dive Brief:

• Alexandria, Virginia-based Burke & Herbert Financial Corp. has agreed to merge with Moorefield, West Virginia-based Summit Financial Group in an all-stock deal valued at $371.5 million, the companies announced Thursday.
• The deal stands to triple Burke & Herbert’s brick-and-mortar footprint — adding Summit’s 54 branches and giving the Alexandria stalwart a presence in West Virginia, Kentucky, Delaware and Maryland’s Eastern Shore for the first time.
• The transaction is expected to close by the first quarter of 2024, pending regulatory approval, the companies said.

Dive Insight:

Despite its push south to Fredericksburg and Richmond in recent years, Burke & Herbert — which has operated since 1852 — had never acquired another bank until now. 

The deal would create a bank with $8.1 billion in assets, more than 75 locations and a workforce of more than 800, the companies said.

Burke & Herbert's chair and CEO, David Boyle, will continue in that role for the combined company, while Charlie Maddy, Summit's CEO and chair, will serve as the president and as a director, the companies said.

The combined company will operate under the name Burke & Herbert name, be headquartered in Alexandria, and have a 16-member board split evenly among directors from Burke & Herbert and Summit.

"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," Boyle said in a statement. "The rich and storied history of our franchises and our combined financial strength creates a promising future for our customers through a broader set of products and services … for our communities by having more resources to support and care for them, and for our shareholders due to favorable profitability metrics and a larger foundation for future growth."

Under Thursday’s deal, Summit shareholders will receive 0.504 shares of Burke & Herbert common stock for each Summit share they own. Burke & Herbert shareholders will own roughly 50% of the combined company's outstanding shares, while Summit shareholders will own approximately the other half.

Prior to the proposed tie-up, Burke & Herbert counted $3.6 billion in assets; Summit, $4.5 billion.

"This alliance doesn't just extend our influence; it strategically positions us for future growth,” Maddy said in a statement. “It also lays the foundation for cultivating richer relationships and underscores our aspiration to become the most sought-after community bank in our markets."

History has an arguably strong undercurrent at Burke & Herbert. Co-founder John Woolfolk Burke’s family has played an active role in the bank’s management, while E. Hunt Burke, the bank’s former chairman, and two other descendants of the family serve as directors. 

Summit itself dates back to 1883. The deal announced Thursday will establish a $5 million community foundation to ensure continued strong support, the companies said.

The transaction comes amid a slowdown in mergers and acquisitions, with only 50 deals announced so far this year, American Banker reported.