Summit Financial Group in Moorefield, W.Va., has agreed to buy Highland County Bankshares in Monterey, Va.

The $1.5 billion-asset Summit said in a press release Monday that it will pay $21.8 million in cash for the $127 million-asset parent of First Citizens Bank. The deal is expected to close early in the third quarter.

Summit said in supplemental documents that it expects the deal to be 3-4% accretive to its 2016 earnings, with higher returns in subsequent years. The company said it should take about three and a half years to earn back the 4.8% dilution to its tangible book value.

Summit expects to incur $1.1 million in merger-related costs, though it will also cut about 40% of Highland's noninterest expenses. Summit also said it should be able to use Highlands’ excess liquidity to fuel $50 million in loan growth, including $11 million this year.

"This is an exceptional opportunity to combine two financially strong banks with similar cultures, core values and guiding principles, as well as a shared commitment to build long-term client relationships by providing service beyond expectations," H. Charles Maddy 3rd, Summit’s president and chief executive, said in the release. "Our top priority is to make sure [Highland's] clients experience a smooth transition and enjoy the advantages of additional products and services as well as the added convenience of more banking locations offered by our combined organizations."

Bowles Rice advised Summit. Performance Trust Capital Partners and CowanPerry advised Highland.

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