Burke & Herbert Financial Services Corp. and LINKBANCORP Announce Merger Agreement
Burke & Herbert Financial Services Corp. (the "Company" or "Burke & Herbert") (Nasdaq: BHRB) and LINKBANCORP, Inc. ("LINK") (Nasdaq: LNKB), the parent company of LINKBANK, have officially signed a merger agreement. This exciting move positions Burke & Herbert to acquire LINK in an all-stock transaction valued around $354.2 million or $9.38 for each share of LINK common stock, based on Burke & Herbert's recent closing price.
Key Highlights of This Merger
This merger brings several impactful highlights:
- Expansion into Pennsylvania, significantly increasing Burke & Herbert's presence which will total over 100 locations spanning across Delaware, Kentucky, Maryland, Pennsylvania, Virginia, and West Virginia.
- The creation of a combined bank holding company with total assets estimated at approximately $11.0 billion, with total deposits projected at about $9.1 billion.
- In the first full year of operations after the merger, a combined earnings per share (EPS) of approximately $9.18 is anticipated, assuming full realization of cost efficiencies.
- Both companies share closely aligned corporate cultures aimed at serving customers, communities, and shareholders effectively.
Statements from Leadership
David P. Boyle, Chair and CEO of Burke & Herbert
David P. Boyle expressed that this acquisition is transformative for Burke & Herbert's legacy. He emphasized that this merger brings together the strengths of both institutions, enabling them to deliver exceptional value to customers, employees, and shareholders alike. His excitement about the company’s commitment to community banking shines through, highlighting how this strategic move reinforces their standing as a reputable financial partner within the Mid-Atlantic region.
Andrew Samuel, CEO of LINKBANCORP
Andrew Samuel highlighted a shared vision between the organizations to foster strong leadership within the banking sector and uplift community development. He praised Burke & Herbert for their commitment to their core values and indicated that the merger will accelerate their initiatives, aiming for long-term stakeholder value.
Understanding the Transaction Details
According to the merger agreement, LINK common stockholders will exchange 0.1350 shares of Burke & Herbert stock for each LINK common stock they hold. After the merger, existing Burke & Herbert shareholders are projected to own about 75% of the newly combined entity, while LINK shareholders will account for approximately 25%. The exchange is structured to ensure neutrality regarding cash dividends for LINK shareholders.
Moving forward, two representatives from LINK’s board of directors will be integrated into Burke & Herbert’s board, alongside Andrew Samuel, who will take on the role of Senior Advisor. Other executives from LINK will also transition into the Burke & Herbert team, further strengthening their management.
Advisory Firms Involved
In this significant transaction, Keefe, Bruyette & Woods, a Stifel Company, acted as the exclusive financial advisor for Burke & Herbert. Troutman Pepper Locke LLP served as their legal counsel. LINK was advised by Stephens Inc., which provided a fairness opinion for LINK's board, and Luse Gorman, PC handled legal matters for LINK.
Next Steps and Anticipated Timeline
The closing of the merger is expected in the second quarter of the following year, subject to customary closing conditions including regulatory and shareholder approvals. Directors from both organizations have committed to voting in favor of the agreement, showcasing their dedication to this merger. Stakeholders can look forward to further details via filings with the Securities and Exchange Commission (SEC).
About Burke & Herbert Financial Services Corp.
Burke & Herbert Financial Services Corp. is a well-established financial holding company, regarded as the oldest continuously operating bank in the Washington, D.C. metropolitan area. With over 75 branches, they provide comprehensive banking, borrowing, and investment solutions, all aimed at meeting the varied financial needs of their customers.
About LINKBANCORP, Inc.
Founded in 2018, LINKBANCORP, Inc. stands out with its mission to improve lives through community banking. Its subsidiary, LINKBANK, operates state-chartered banking services, diligently serving various client needs throughout the Mid-Atlantic region, with a focus on positive community impacts.
Frequently Asked Questions
What is the significance of the merger between Burke & Herbert and LINKBANCORP?
This merger enhances Burke & Herbert’s market presence significantly while enriching services offered to customers in the Mid-Atlantic region.
How will this merger affect shareholders of both companies?
Burke & Herbert shareholders are expected to own approximately 75% of the merged entity, while LINK shareholders will hold about 25% of the shares, with cash dividends remaining neutral for LINK shareholders.
When is the merger expected to be finalized?
The merger is anticipated to close in the second quarter of the upcoming year, pending regulatory and shareholder approvals.
What are the predicted earnings per share post-merger?
The combined companies are projecting an earnings per share of about $9.18 in the first full year after the merger.
How will customer service be maintained through this merger?
With aligned corporate cultures that prioritize community and customer service, both companies are committed to a seamless transition that upholds service quality for all customers.
