ALEXANDRIA, Va., Aug. 24,
2023 /PRNewswire/ -- Burke & Herbert
Financial Services Corp. ("Burke & Herbert") (Nasdaq: BHRB) and
Summit Financial Group, Inc. ("Summit") (Nasdaq: SMMF) today announced they
have 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 August 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
From David P. Boyle, Burke
& Herbert Chair, President and Chief Executive Officer
"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. 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."
From H. Charles ("Charlie")
Maddy III, Summit President and Chief Executive Officer
"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. 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."
Transaction Details
Under the terms of the definitive agreement, which was
unanimously approved by the boards of directors of both companies,
holders of Summit common stock
will have the right to receive 0.5043 shares of Burke & Herbert
common stock. Existing Burke & Herbert shareholders will own
approximately 50% of the outstanding shares of the combined company
and Summit shareholders are
expected to own approximately 50%.
Operations, Name, Branding and Headquarters
A significant operational presence will be based
in Moorefield, West Virginia
and the combined company will be headquartered in Alexandria, Virginia. The company will operate
under the name "Burke & Herbert Financial Services Corp." and
will trade under the Burke & Herbert ticker symbol "BHRB" on
the Nasdaq Capital Market. The combined bank will continue to
operate under the "Burke & Herbert
Bank & Trust Company" brand.
Governance and Leadership
The combined company's board of directors will have 16
directors, consisting of 8 directors from Burke & Herbert and 8
directors from Summit with
David P. Boyle serving as Chair. Summit's current Chair, Oscar M. Bean, will join as a Vice Chair of the
combined board of directors.
The combined company will be led by a highly-regarded management
team with significant financial services experience.
- David Boyle, Burke &
Herbert's current Chief Executive Officer, will continue to serve
in that role for the combined company
- Charlie Maddy, Summit's current President and Chief Executive
Officer, will serve as President and as a director of the combined
company
- Rob Tissue, Summit's current
Chief Financial Officer, will serve as Executive Vice President of
Financial Strategy of the combined company
- Roy Halyama, Burke &
Herbert's current Chief Financial Officer, will continue to serve
in that role for the combined company
- Joe Hager, Summit's current Chief Risk Officer, will
serve as Chief Operating Officer of the combined company
- Jeff Welch, Burke &
Herbert's current Chief Credit Officer, will continue to serve in
that role for the combined company
- Danyl Freeman, Summit's current Chief Human Resources
Officer, will continue to serve in that role for the combined
company
- Jennifer Schmidt, Burke &
Herbert's current Chief Compliance Officer, will serve as Chief
Risk Officer for the combined company
- Brad Ritchie, Summit's current Executive Vice President and
President of Summit Community Bank, will serve as Chief Lending
Officer of the combined company
- Shannon Rowan, Burke &
Herbert's current Director of Trust & Wealth Management, will
continue to serve in that role for the combined company
- The remainder of the executive team will be drawn from both
Burke & Herbert and Summit
Timing and Approvals
The transaction is expected to close in the first quarter of
2024, subject to satisfaction of customary closing conditions,
including regulatory approvals and shareholder approval from Burke
& Herbert and Summit
shareholders. Summit directors and
executive officers have entered into agreements with Burke &
Herbert pursuant to which they have committed to vote their shares
of Summit common stock in favor of the merger. Burke & Herbert
directors and executive officers have entered into agreements with
Summit pursuant to which they have
committed to vote their shares of Burke & Herbert common stock
in favor of the merger. For additional information about the
proposed merger of Summit with and
into Burke & Herbert, shareholders are encouraged to carefully
read the definitive agreement that will be filed with the
Securities and Exchange Commission ("SEC") tomorrow.
Advisors
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 LLP served as legal counsel to Burke &
Herbert. D.A. Davidson & Co. acted as financial advisor to
Summit and delivered a fairness
opinion to the Board of Directors of Summit. Bowles Rice LLP served as legal
counsel to Summit.
Investor Presentation Details
A presentation regarding the merger announcement will be filed
with the SEC and made available at the SEC's
website www.sec.gov or by accessing Burke & Herbert's
website at www.burkeandherbertbank.com under the
"Investor Relations" link or at www.summitfgi.com under the "News /
Presentations and Events" link.
About Burke & Herbert Financial Services Corp.
Burke & Herbert Financial Services Corp. is the $3.6 billion bank holding company for Burke &
Herbert Bank & Trust Company.
Burke & Herbert Bank & Trust
Company is the oldest continuously operating bank under its
original name headquartered in the greater Washington, D.C. metropolitan area. The Bank
offers a full range of business and personal financial solutions
designed to meet customers' banking, borrowing, and investment
needs and has over 20 branches throughout the Northern Virginia region and commercial loan
offices in Fredericksburg,
Loudoun County, Richmond, and in Bethesda, Maryland. Learn more
at www.burkeandherbertbank.com.
About Summit Financial Group, Inc.
Summit Financial Group, Inc. is the $4.5
billion financial holding company for Summit Community Bank,
Inc. Its talented bankers serve commercial and individual clients
throughout West Virginia, the
greater Washington, D.C.
metropolitan area, Virginia,
Kentucky, Eastern Shore of
Maryland and Delaware. Summit's focus on in-market commercial lending
and providing other business banking services in dynamic markets is
designed to leverage its highly efficient operations and core
deposits in strong legacy locations. Residential and consumer
lending, trust and wealth management, and other retail financial
services are offered through convenient digital and mobile banking
platforms, as well as 54 full-service branch locations. More
information on Summit Financial Group, Inc. (NASDAQ: SMMF),
headquartered in West Virginia's
Eastern Panhandle in Moorefield,
is available at mysummit.bank.
Forward-looking Statements
This communication includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended,
with respect to the beliefs, goals, intentions, and expectations of
Burke & Herbert and Summit
regarding the proposed transaction, revenues, earnings, earnings
per share, loan production, asset quality, and capital levels,
among other matters; our estimates of future costs and benefits of
the actions we may take; our assessments of expected losses on
loans; our assessments of interest rate and other market risks; our
ability to achieve our financial and other strategic goals; the
expected timing of completion of the proposed transaction; the
expected cost savings, synergies, returns and other anticipated
benefits from the proposed transaction; and other statements that
are not historical facts.
Forward–looking statements are typically identified by such
words as "believe," "expect," "anticipate," "intend," "outlook,"
"estimate," "forecast," "project," "will," "should," and other
similar words and expressions, and are subject to numerous
assumptions, risks, and uncertainties, which change over time.
These forward-looking statements include, without limitation, those
relating to the terms, timing and closing of the proposed
transaction.
Additionally, forward–looking statements speak only as of the
date they are made; Burke & Herbert and Summit do not assume any duty, and do not
undertake, to update such forward–looking statements, whether
written or oral, that may be made from time to time, whether as a
result of new information, future events, or otherwise.
Furthermore, because forward–looking statements are subject to
assumptions and uncertainties, actual results or future events
could differ, possibly materially, from those indicated in or
implied by such forward-looking statements as a result of a variety
of factors, many of which are beyond the control of Burke &
Herbert and Summit. Such
statements are based upon the current beliefs and expectations of
the management of Burke & Herbert and Summit and are subject to significant risks
and uncertainties outside of the control of the parties. Caution
should be exercised against placing undue reliance on
forward-looking statements. The factors that could cause actual
results to differ materially include the following: the occurrence
of any event, change or other circumstances that could give rise to
the right of one or both of the parties to terminate the definitive
merger agreement between Burke & Herbert and Summit; the outcome of any legal proceedings
that may be instituted against Burke & Herbert or Summit; the possibility that the proposed
transaction will not close when expected or at all because required
regulatory, shareholder or other approvals are not received or
other conditions to the closing are not satisfied on a timely basis
or at all, or are obtained subject to conditions that are not
anticipated (and the risk that required regulatory approvals may
result in the imposition of conditions that could adversely affect
the combined company or the expected benefits of the proposed
transaction); the ability of Burke & Herbert and Summit to meet expectations regarding the
timing, completion and accounting and tax treatments of the
proposed transaction; the risk that any announcements relating to
the proposed transaction could have adverse effects on the market
price of the common stock of either or both parties to the proposed
transaction; the possibility that the anticipated benefits of the
proposed transaction will not be realized when expected or at all,
including as a result of the impact of, or problems arising from,
the integration of the two companies or as a result of the strength
of the economy and competitive factors in the areas where Burke
& Herbert and Summit do
business; certain restrictions during the pendency of the proposed
transaction that may impact the parties' ability to pursue certain
business opportunities or strategic transactions; the possibility
that the transaction may be more expensive to complete than
anticipated, including as a result of unexpected factors or events;
diversion of management's attention from ongoing business
operations and opportunities; the possibility that the parties may
be unable to achieve expected synergies and operating efficiencies
in the merger within the expected timeframes or at all and to
successfully integrate Summit's
operations and those of Burke & Herbert; such integration may
be more difficult, time-consuming or costly than expected; revenues
following the proposed transaction may be lower than expected;
Burke & Herbert's and Summit's
success in executing their respective business plans and strategies
and managing the risks involved in the foregoing; the dilution
caused by Burke & Herbert's issuance of additional shares of
its capital stock in connection with the proposed transaction;
effects of the announcement, pendency or completion of the proposed
transaction on the ability of Burke & Herbert and Summit to retain customers and retain and hire
key personnel and maintain relationships with their suppliers, and
on their operating results and businesses generally; and risks
related to the potential impact of general economic, political and
market factors on the companies or the proposed transaction and
other factors that may affect future results of Burke & Herbert
and Summit; and the other factors
discussed in the "Risk Factors" section of Burke & Herbert's
Registration Statement on Form 10, as amended and as ordered
effective by the SEC on April 21,
2023, and Summit's Annual
Report on Form 10–K for the year ended December 31, 2022, in the "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of each of Burke & Herbert's
and Summit's Quarterly Report on
Form 10–Q for the quarters ended March 31,
2023 and June 30, 2023, and
other reports Burke & Herbert and Summit file with the SEC.
Additional Information and Where to Find It
In connection with the proposed transaction, Burke & Herbert
will file a registration statement on Form S-4 with the SEC. The
registration statement will include a joint proxy statement of
Burke & Herbert and Summit,
which also constitutes a prospectus of Burke & Herbert, that
will be sent to shareholders of Burke & Herbert and
shareholders of Summit seeking
certain approvals related to the proposed transaction.
The information contained herein does not constitute an offer to
sell or a solicitation of an offer to buy any securities or a
solicitation of any vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. INVESTORS AND
SHAREHOLDERS OF BURKE & HERBERT AND SUMMIT AND THEIR RESPECTIVE AFFILIATES ARE
URGED TO READ, WHEN AVAILABLE, THE REGISTRATION STATEMENT ON FORM
S-4, THE JOINT PROXY STATEMENT/PROSPECTUS TO BE INCLUDED WITHIN THE
REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS
FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED
TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
BURKE & HERBERT, SUMMIT AND
THE PROPOSED TRANSACTION. Investors and shareholders will be able
to obtain a free copy of the registration statement, including the
joint proxy statement/prospectus, as well as other relevant
documents filed with the SEC containing information about Burke
& Herbert and Summit, without
charge, at the SEC's website www.sec.gov. Copies of documents filed
with the SEC by Burke & Herbert will be made available free of
charge in the "Investor Relations" section of Burke & Herbert's
website, www.burkeandherbertbank.com. Copies of documents
filed with the SEC by Summit will
be made available free of charge in the "News" section of
Summit's
website, www.summitfgi.com, under the heading "News and
Filings."
Participants in Solicitation
Burke & Herbert, Summit,
and certain of their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction under the rules of the SEC.
Information regarding Burke & Herbert's directors and executive
officers is available in its Registration Statement on Form 10, as
amended and as ordered effective by the SEC on April 21, 2023. Information regarding
Summit's directors and executive
officers is available in its definitive proxy statement, which was
filed with the SEC on March 31, 2023,
and certain other documents filed by Summit with the SEC. Other information
regarding the participants in the solicitation of proxies in
respect of the proposed transaction and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the joint proxy statement/prospectus and other
relevant materials to be filed with the SEC. Free copies of these
documents, when available, may be obtained as described in the
preceding paragraph.
Contact Investor Relations:
Email address: bhfsir@burkeandherbertbank.com
Phone number: 703-666-3555
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SOURCE Burke & Herbert Financial Services Corp.; Summit
Financial Group, Inc.