Virginia’s oldest bank announced plans Wednesday to form a bank holding company.
Pending regulatory approval, the 170-year-old Burke & Herbert Bank & Trust in Alexandria would become a subsidiary of Burke & Herbert Financial Services Corp. The move comes as the $3.6 billion-asset company eyes a wider footprint, with an expansion into the state capital Richmond underway and additional moves to Winchester and Norfolk under consideration.
Though some prominent banks, including BancorpSouth, Bank OZK and Zions Bank, have abandoned the holding company structure in recent years, Burke & Herbert believes its prospective holding company “will provide further financial and operational flexibility and is an important part of the continued success of the Bank,” Chairman E. Hunt Burke said in a press release.
Earlier this month, after receiving shareholder and regulatory approval, the $383 million-asset Endeavor Bank in San Diego became a subsidiary of its holding company, Endeavor Bancorp, enabling the 4-year-old bank to access $15 million in subordinated debt that Endeavor Bancorp had previously raised.
In addition to expanded capital access, a holding company will make it easier for Endeavor to repurchase shares, establish subsidiary banks in new markets and acquire or start related nonbank businesses, according to CEO Dan Yates.
“Bancorp does not presently have any acquisition or other plans, but we want to be in a position to take advantage of strategic opportunities when they present themselves,” Yates said in a press release.
Burke & Herbert did not disclose any new strategic initiatives, but CEO David Boyle said a holding company would open the door to a wider range of options.
“A successful corporate reorganization can lead to additional access to capital markets, better liquidity for our shareholders, and increased visibility and demand for our stock,” Boyle said in Wednesday’s press release.