Summit Financial Group in Moorefield, West Virginia, has agreed to acquire PSB Holding Corp. in Preston, Maryland.
The all-stock deal is valued at $53.9 million and is expected to close in the second quarter. It would create a bank with total assets of $4.5 billion, loans of $3.5 billion and deposits of $3.6 billion, Summit said.
The $594 million-asset PSB, the holding company for Provident State Bank, has 10 branches on the Eastern Shore of Maryland and in Delaware.
"Partnering with PSB not only further expands Summit's community banking footprint to the eastern shore … but also permits both PSB's and Summit's clients the added convenience of enhanced banking services at more locations," H. Charles Maddy III, president and CEO of the $3.9 billion-asset Summit, said in a news release Monday.
Summit operates
Provident State President and CEO Melissa Quirk said the combination would provide customers access to a greater breadth of products and services. "By joining forces, we can continue to bring opportunities and benefits to our shareholders, customers and communities," she said in the release.
Summit said in a presentation it plans to cut about 25% of PSB's annual noninterest expenses. The buyer estimated the deal would be 4.5% accretive to its earnings per share in 2023 and 9.7% accretive the following year. Summit said it should earn back 7% tangible book value dilution within three and a half years.
The parties agreed to a termination fee of $2.2 million, payable by PSB to Summit should the deal be called off, according to a regulatory filing.
PSB was advised by Piper Sandler and was represented by the law firm Holland & Knight. Summit was represented by the law firm of Bowles Rice.
