Burke & Herbert Financial Services Corp. (“Burke & Herbert”) (Nasdaq: BHRB) and Summit Financial Group, Inc. (“Summit”) (Nasdaq: SMMF) have made headlines by announcing a definitive all-stock merger agreement. The merger, which values the deal at approximately $371.5 million or $25.20 per share of Summit Financial Group common stock, is set to create a bank holding company with assets exceeding $8 billion. The closing price for Burke & Herbert Financial Services’ common stock was $49.98 as of August 23, 2023. This merger is a strategic move that leads to a combined market capitalization of nearly $750 million.

50-50 Ownership and Impact on Earnings Per Share

Ownership of the soon-to-be-merged entity will be evenly split, with Burke & Herbert Financial Services and Summit Financial Group each holding approximately 50% of the shares. The transaction is forecasted to yield a combined earnings per share of around $7.90 in the first full year of combined operations, assuming fully realized cost savings.

Combined Company to Have Wide Branch Network and Community Focus

With a closely aligned leadership culture dedicated to community service, the combined company will boast more than 75 branches across Virginia, West Virginia, Maryland, Delaware, and Kentucky. Over 800 employees will be actively engaged in serving their respective communities. To ensure robust community support, a $5 million community foundation will be established.

Leadership Voices Strong Support for Strategic Merger

David P. Boyle, Burke & Herbert Financial Services Chair, President and CEO, and H. Charles (“Charlie”) Maddy III, Summit Financial Group President and CEO, have expressed enthusiastic support for the merger. Both leaders emphasized their commitment to delivering exceptional service and products while building stronger community relationships.

Transaction Terms and Closing Expectations

Under the terms of the unanimous board-approved agreement, holders of Summit Financial Group common stock will receive 0.5043 shares of Burke & Herbert Financial Services common stock. The combined company will have its operational base in Moorefield, West Virginia, while the headquarters will be located in Alexandria, Virginia. The company will trade under the Burke & Herbert ticker symbol “BHRB” on the Nasdaq Capital Market.

Governance Structure and Regulatory Approvals

The board of the combined company will comprise 16 directors—eight from each entity. David P. Boyle will serve as Chair, and Summit’s current Chair, Oscar M. Bean, will join as a Vice Chair. The merger is expected to close in the first quarter of 2024, subject to customary closing conditions, regulatory approvals, and shareholder approvals from both Burke & Herbert and Summit Financial Group.

The upcoming merger between Burke & Herbert Financial Services and Summit Financial Group is expected to set a new standard in the banking sector, offering investors, customers, and communities enhanced value and opportunities. With a combined asset pool exceeding $8 billion and a strong focus on community development, the future looks promising for this unified banking entity.

  Alexandria, Banking acquisition news, Banking industry news, Burke & Herbert Financial Services, David P. Boyle, H. Charles Maddy III, Kentucky, Maryland, Summit Financial Group, USA, Virginia, West Virginia