Burke & Herbert Financial Services and Summit Financial Group entered into a definitive agreement under which Summit will merge with and into Burke & Herbert in an all-stock merger of equals valued at approximately $371.5 million or $25.20 per share of Summit common stock, based on a closing price for Burke & Herbert’s common stock of $49.98 as of Aug. 23, 2023.
Highlights of the Transaction:
- Merger of equals that creates a bank holding company with more than $8 billion in assets and a combined market capitalization of nearly $750 million
- Ownership split of approximately 50% Burke & Herbert and 50% Summit
- The transaction is expected to result in a combined earnings per share of approximately $7.90 in the first full year of combined operations (assuming fully realized cost savings)
- The combined company will have more than 75 branches across Virginia, West Virginia, Maryland, Delaware and Kentucky, and more than 800 employees serving our communities
- Closely aligned leadership cultures dedicated to the success of our customers, communities, employees and shareholders
- Significant operational presence will be based in Moorefield, West Virginia and the headquarters of the combined company will be located in Alexandria, Virginia
- Establishes a $5 million community foundation to ensure continued strong support of Summit’s communities
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“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,” David P. Boyle, chair, president and CEO of Burke & Herbert, said.. “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 employees with new and expanded opportunities for advancement, 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. The senior management teams are looking forward to working together to deliver on our collective mission and I’m especially eager to work with Charlie who is a proven leader and industry veteran.”
“Our organizations are unified by a shared vision, values, and a forward-thinking approach to banking. Our synergistic cultures stand as a bedrock for sustained success,” H. Charles Maddy III, president and CEO of Summit, said. “We are poised to broaden our ‘Service Beyond Expectations’ ethos, underpinning robust growth and enhancing shareholder returns. This alliance doesn’t just extend our influence; it strategically positions us for future growth. It also lays the foundation for cultivating richer relationships and underscores our aspiration to become the most sought-after community bank in our markets. Collaborating with David, a distinguished leader, and his adept team, I am unwavering in my belief that this partnership will elevate us to heights neither of our organizations could have reached on their own.”
Keefe, Bruyette & Woods, A Stifel Company, acted as financial advisor to Burke & Herbert in the transaction and delivered a fairness opinion to the board of directors. Troutman Pepper Hamilton Sanders served as legal counsel to Burke & Herbert. D.A. Davidson acted as financial advisor to Summit and delivered a fairness opinion to the Board of Directors of Summit. Bowles Rice served as legal counsel to Summit.
