true000196433300019643332024-05-032024-05-03

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K/A
(Amendment No. 2)
_________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

May 3, 2024
Date of Report (date of earliest event reported)
___________________________________
Burke & Herbert Financial Services Corp.
(Exact name of registrant as specified in its charter)
___________________________________

Virginia
(State or other jurisdiction of
incorporation or organization)
001-41633
(Commission File Number)
92-0289417
(I.R.S. Employer Identification Number)
100 S. Fairfax Street
Alexandria, VA 22314
(Address of principal executive offices and zip code)
(703) 666-3555
(Registrant's telephone number, including area code)
___________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common stock, par value $.50BHRBThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


EXPLANATORY NOTE

Effective on May 3, 2024 (the "Closing Date"), Burke & Herbert Financial Services Corp. ("Burke & Herbert"), a Virginia corporation, completed its previously announced merger with Summit Financial Group, Inc. ("Summit"), a West Virginia corporation, pursuant to the Agreement and Plan of Reorganization and accompanying Plan of Merger (the "Merger Agreement") dated August 24, 2023 between Burke & Herbert and Summit.

Pursuant to the Merger Agreement, on the Closing Date, (i) Summit merged with and into Burke & Herbert, with Burke & Herbert continuing as the surviving corporation (the “Merger”), and (ii) immediately following the Merger, Summit Community Bank, Inc., a West Virginia chartered bank and a wholly-owned subsidiary of Summit ("SCB"), merged with and into Burke & Herbert Bank & Trust Company, a Virginia chartered bank and a wholly-owned subsidiary of Burke & Herbert ("Burke & Herbert Bank"), with Burke & Herbert Bank as the surviving bank (the "Bank Merger").

On May 3, 2024, the Company filed a Current Report on Form 8-K, as amended by Amendment No. 1 thereto, reporting the completion of the Merger (the "Original Report"). This Amendment No. 2 is being filed with the Securities and Exchange Commission (the "Commission") solely to amend and supplement item 9.01 of the Original Report, as described in Item 9.01 below. This Amendment No. 2 makes no other amendments to the Original Report.

The pro forma financial information included in this Amendment No. 2 has been presented for informational purposes only and does not purport to represent the actual results that Burke & Herbert and Summit would have achieved had the companies been combined during the periods presented, and is not intended to project any future results of operations for the combined company.

Item 9.01 - Financial Statements and Exhibits.

(a)    Financial Statements of businesses acquired.

Pursuant to General Instruction B.3 of Form 8-K, the audited consolidated financial statements of Summit as of and for the years ended December 31, 2023, and 2022, including the independent auditor's report, are not required to be filed again by this Current Report on Form 8-K, because substantially the same information was previously incorporated by reference in the Company's Registration Statement on Form S-4 ("Registration Statement"), originally filed with the Commission on September 29, 2023, as amended (File No. 333-274810), including Summit's Annual Report on Form 10-K filed with the Commission on March 12, 2024, on Form 10-K (File No. 000-16587). The unaudited consolidated balance sheets of Summit as of March 31, 2024, and the unaudited consolidated statements of operations and cash flows for the three months ended March 31, 2024, and 2023 are filed herewith as Exhibit 99.1 and are incorporated by reference into this item 9.01(a).

(b)    Pro Forma financial information

The unaudited pro forma condensed consolidated combined financial information as of and for the three months ended March 31, 2024, and for the year ended December 31, 2023, is filed herewith as Exhibit 99.2 and is incorporated by reference into this item 9.01(b).

(c)    Shell company transactions. None.

(d)    Exhibits.




*Filed herewith



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto, duly authorized on this 10th day of July, 2024.



Burke & Herbert Financial Services Corp.
By:
/s/ Roy E. Halyama
Name:
Roy E. Halyama
Title:
Executive Vice President, CFO

Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION

The unaudited pro forma condensed combined consolidated financial information has been prepared using the acquisition method of accounting under the provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification, ASC 805 "Business Combinations", giving effect to Burke & Herbert's proposed acquisition of Summit. Under this method, Summit's assets and liabilities as of the date of the merger will be recorded at their respective fair values and added to those of Burke & Herbert. Any difference between the purchase price for Summit and the fair value of the identifiable net assets acquired (including core deposit intangibles) will be recorded as goodwill. The goodwill resulting from the merger will not be amortized to expense, but instead will be reviewed for impairment at least annually. Any core deposit intangible and other intangible assets with estimated useful lives to be recorded by Burke & Herbert in connection with the merger will be amortized to expense over their estimated useful lives. The financial statements of Burke & Herbert issued after the merger will reflect the results attributable to the acquired operations of Summit beginning on the date of completion of the merger. Effective at 12:01 A.M. Eastern Time on May 3, 2024 (the "Effective Time"), Burke & Herbert Financial Services Corp. ("Burke & Herbert"), a Virginia corporation, completed its merger with Summit Financial Group, Inc. ("Summit"), a West Virginia corporation, pursuant to the Agreement and Plan of Reorganization and accompanying Plan of Merger (the "Merger Agreement") dated August 24, 2023 between Burke & Herbert and Summit.

The following unaudited pro forma condensed combined consolidated financial information and accompanying notes are based on and should be read in conjunction with (i) the historical audited consolidated financial statements of Burke & Herbert and accompanying notes included in Burke & Herbert's Annual Report on Form 10-K for the year ended December 31, 2023, (ii) the historical unaudited consolidated financial statements of Burke & Herbert and accompanying notes included in Burke & Herbert’s quarterly report on Form 10-Q for the three months ended March 31, 2024, (iii) the historical audited consolidated financial statements of Summit and accompanying notes included in Summit's Annual Report on Form 10-K for the year ended December 31, 2023, and (iv) the historical unaudited consolidated financial statements of Summit and accompanying notes included in Summit’s quarterly report on Form 10-Q for the three months ended March 31, 2024, which are incorporated by reference herein.

The unaudited pro forma condensed combined consolidated financial information is provided for illustrative information purposes only. The unaudited pro forma condensed combined financial information is not necessarily, and should not be assumed to be, an indication of the actual results that would have been achieved had the merger been completed as of the dates indicated or that may be achieved in the future. The unaudited pro forma condensed combined consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X, Pro Forma Information, which requires the depiction of the accounting for the transaction, which we refer to as transaction accounting adjustments.

Regulation S-X also allows for management adjustments that could include presentation of the reasonably estimable cost savings and revenue enhancements and other transaction effects that have occurred or are reasonably expected to occur. Please note the unaudited pro forma condensed combined consolidated financial information does not include management adjustments for any potential effects of changes in market conditions, revenue enhancements or expense efficiencies, or any post-closing sale of loans or deposits, among other factors.

The following unaudited pro forma condensed combined consolidated balance sheet as of March 31, 2024, combines the historical financial statements of Burke & Herbert and Summit and gives effect to the proposed merger as if the merger occurred on March 31, 2024. The unaudited pro forma condensed combined consolidated income statements give effect to the proposed merger as if the merger occurred on January 1, 2023, for the twelve months ended December 31, 2023, and the three months ended March 31, 2024. Certain reclassification adjustments have been made to Summit's financial statements to conform to Burke & Herbert's financial statement presentation.

The unaudited pro forma condensed combined consolidated financial statements were prepared with Burke & Herbert as the accounting acquirer and Summit as the accounting acquiree under the acquisition method of accounting. Accordingly, the consideration paid by Burke & Herbert to complete the merger of Summit will be allocated to Summit's assets and liabilities based upon their estimated fair values as of the date of completion of the merger. The allocation is dependent upon certain valuations and other studies that have been included in the


unaudited condensed pro forma financial statements. The pro forma calculations, shown below, include a closing share price of $51.67, which represents the closing price of Burke & Herbert's common stock on May 2, 2024, and a 10-day average share price of $53.66 used to pay fractional shares as agreed upon within the Merger Agreement, defined as the average of the closing sale prices of Burke & Herbert common stock as reported on the Nasdaq Stock Market, LLC market for the ten (10) full trading days ending on the trading day immediately preceding (but not including) May 3, 2024.

The unaudited pro forma condensed combined consolidated combined statements of income and earnings per share data do not include anticipated cost savings or revenue enhancements. Burke & Herbert is continuing to assess the two companies’ personnel, benefits plans, premises, equipment, computer systems, and service contracts to determine where the companies may take advantage of redundancies or where it will be beneficial or necessary to convert to one system. Certain decisions arising from these assessments may involve canceling contracts between either Burke & Herbert or Summit and certain service providers. There is no assurance that the anticipated cost savings will be realized on the anticipated time schedule or at all.

The pro forma combined basic and diluted earnings per share of Burke & Herbert common stock are based on the pro forma combined net income per common share for Burke & Herbert and Summit divided by the pro forma basic or diluted common shares of the combined entities. The pro forma information includes adjustments related to the fair value of assets and liabilities of Summit and is subject to adjustment in accordance with ASC 805 for facts and circumstances that existed as of the merger date as additional information becomes available and as final merger data analyses are performed.

The unaudited pro forma data are qualified by the statements set forth under this caption and should not be considered indicative of the market value of Burke & Herbert's common stock or the actual or future results of operations of Burke & Herbert for any period. Actual results may be materially different than the pro forma information presented.



Unaudited Pro Forma Condensed Combined Balance Sheet
As of March 31, 2024
(in thousands)

PRO FORMA CONDENSED COMBINED BALANCE SHEET
The unaudited pro forma condensed combined balance sheet as of March 31, 2024, is presented as if the merger had occurred on March 31, 2024.

Burke & HerbertSummitTransactionCombined
HistoricalHistoricalAdjustmentsNotesPro Forma
Assets
Cash and due from banks$9,152 $23,706 $— $32,858 
Interest-earning deposits with banks44,925 31,950 (19,250)(14)57,625 
Cash and cash equivalents54,077 55,656 (19,250)90,483 
Debt securities available-for-sale, at fair value1,275,520 490,271 86,306 (3)1,852,097 
Debt securities held-to-maturity, at amortized cost— 93,737 (93,737)(3)— 
Equity and other investments16,357 33,413 — 49,770 
Loans held-for-sale, at fair value2,422 — — 2,422 
Loans2,118,155 3,697,042 (153,306)(5)5,661,891 
Allowance for credit losses(24,606)(49,232)(30,136)(6)(103,974)
Net loans2,093,549 3,647,810 (183,442)5,557,917 
Premises and equipment, net61,576 65,725 13,276 (13)140,577 
Accrued interest receivable16,328 20,238 — 36,566 
Company-owned life insurance94,755 86,230 — 180,985 
Goodwill and other intangible assets— 73,443 29,770 (8)103,213 
Other assets81,806 76,361 24,356 (6) (7) (9)182,523 
Total Assets$3,696,390 $4,642,884 $(142,721)$8,196,553 
Liabilities and Shareholders’ Equity
Liabilities
Non-interest-bearing deposits$822,767 $605,509 — $1,428,276 
Interest-bearing deposits2,167,346 3,142,906 (7,136)(10)5,303,116 
Total deposits2,990,113 3,748,415 (7,136)6,731,392 
Borrowed funds360,000 262,989 — 622,989 
Subordinated debentures & trust preferred securities— 123,493 (16,466)(11)107,027 
Accrued interest and other liabilities26,969 53,706 — 80,675 
Total Liabilities3,377,082 4,188,603 (23,602)7,542,083 
Shareholders’ Equity
Preferred Stock— 14,920 (4,507) (2) (12)10,413 
Common Stock4,006 36,717 (33,014)(2)7,709 
Additional paid-in capital15,308 93,518 289,812 (2)398,638 
Retained earnings428,532 316,375 (378,659)(2) (6) (14)366,248 
Accumulated other comprehensive income (loss)(100,954)(7,249)7,249 (2)(100,954)
Treasury stock(27,584)— — (27,584)
Total Shareholders’ Equity319,308 454,281 (119,119)654,470 
Total Liabilities and Shareholders’ Equity
$3,696,390 $4,642,884 $(142,721)$8,196,553 





Unaudited Pro Forma Condensed Combined Income Statement
For the Three Months Ended March 31, 2024
(in thousands except share and per share data)

PRO FORMA CONDENSED COMBINED INCOME STATEMENT
The unaudited pro forma condensed combined income statement for the three months ended March 31, 2024, are presented as if the merger had occurred on January 1, 2023.

Burke & HerbertSummitTransactionCombined
HistoricalHistoricalAdjustmentsNotesPro Forma
Interest income
Loans, including fees$28,045 $59,249 $13,446 (5)$100,740 
Taxable securities8,943 5,025 2,396 (3) (4)16,364 
Tax-exempt securities1,361 1,116 — 2,477 
Other interest income396 132 — 528 
Total interest income38,745 65,522 15,842 120,109 
Interest expense
Deposits12,931 21,430 593 (10)34,954 
Short-term borrowings3,655 2,661 — 6,316 
Long-term borrowings and subordinated debt— 1,508 1,412 (11)2,920 
Other interest expense28 — — 28 
Total interest expense16,614 25,599 2,005 44,218 
Net interest income
22,131 39,923 13,837 75,891 
Provision for (recapture of) credit losses(670)— — (670)
Net interest income after credit loss expense22,801 39,923 13,837 76,561 
Non-interest income
Fiduciary and wealth management1,419 847 — 2,266 
Service charges, fees, & card revenue1,606 3,556 — 5,162 
Net gains (losses) on securities— (54)— (54)
Income from life insurance547 463 — 1,010 
Other non-interest income682 266 — 948 
Total non-interest income4,254 5,078 — 9,332 
Non-interest expense
Salaries, wages and employee benefits11,883 12,058 — 23,941 
Occupancy1,538 1,695 79 (7)3,312 
Equipment rentals, depreciation and maintenance1,281 2,508 472 (13)4,261 
Amortization of intangibles— 987 4,083 (8)5,070 
Merger-related expenses— 53 — 53 
Other operating6,463 5,657 — 12,120 
Total non-interest expense21,165 22,958 4,634 48,757 
Income before income taxes5,890 22,043 9,203 37,136 
Income tax expense
678 4,996 2,117 7,791 
Net income
5,212 17,047 7,086 29,345 
Preferred stock dividends— 225 — 225 
Net income applicable to common shares$5,212 $16,822 $7,086 $29,120 
Earnings per common share:
Basic$0.70 $1.15 $0.11 (a)$1.96 
Diluted$0.69 $1.14 $0.12 (a)$1.95 
Weighted average number of shares7,433,48114,683,596(7,278,659)(a)14,838,418
Weighted average dilutive shares7,527,48914,750,052(7,311,601)(a)14,965,940
(a) Summit average number and diluted were adjusted by the exchange ratio to calculate pro forma EPS calculations




Unaudited Pro Forma Condensed Combined Income Statement
For the Twelve Months Ended December 31, 2023
(in thousands except share and per share data)

PRO FORMA CONDENSED COMBINED INCOME STATEMENT
The unaudited pro forma condensed combined income statement for the fiscal year ended December 31, 2023, are presented as if the merger had occurred on January 1, 2023.

Burke & HerbertSummitTransactionCombined
HistoricalHistoricalAdjustmentsNotesPro Forma
Interest income
Loans, including fees$101,800 $217,855 $42,583 (5)$362,238 
Taxable securities37,179 18,412 9,635 (3) (4)65,226 
Tax-exempt securities5,615 5,549 — 11,164 
Other interest income2,302 732 — 3,034 
Total interest income146,896 242,548 52,218 441,662 
Interest expense
Deposits39,195 73,191 3,568 (10)115,954 
Short-term borrowings13,856 6,816 — 20,672 
Long-term borrowings and subordinated debt— 5,972 5,678 (11)11,650 
Other interest expense86 — — 86 
Total interest expense53,137 85,979 9,246 148,362 
Net interest income
93,759 156,569 42,972 293,300 
Provision for (recapture of) credit losses214 12,250 27,944 (6)40,408 
Net interest income after credit loss expense93,545 144,319 15,028 252,892 
Non-interest income
Fiduciary and wealth management5,354 3,436 — 8,790 
Service charges, fees, & card revenue6,670 14,276 — 20,946 
Net gains (losses) on securities(112)474 — 362 
Income from life insurance2,844 1,576 — 4,420 
Other non-interest income3,196 1,114 — 4,310 
Total non-interest income17,952 20,876 — 38,828 
Non-interest expense
Salaries, wages and employee benefits48,648 46,296 — 94,944 
Occupancy6,035 5,851 395 (7)12,281 
Equipment rentals, depreciation and maintenance5,770 9,094 1,897 (13)16,761 
Amortization of intangibles— 3,335 15,760 (8)19,095 
Merger-related expenses— 6,444 25,000 (14)31,444 
Other operating25,983 23,773 — 49,756 
Total non-interest expense86,436 94,793 43,052 224,281 
Income before income taxes25,061 70,402 (28,024)67,439 
Income tax expense
2,369 15,163 (6,446)11,086 
Net income
22,692 55,239 (21,578)56,353 
Preferred stock dividends— 900 — 900 
Net income applicable to common shares$22,692 $54,339 $(21,578)$55,453 
Earnings per common share:
Basic$3.05 $3.82 $(3.07)(a)$3.80 
Diluted$3.02 $3.81 $(3.06)(a)$3.77 
Weighted average number of shares7,428,04214,206,811(7,042,317)(a)14,592,536
Weighted average dilutive shares7,506,85514,249,129(7,063,294)(a)14,692,690
(a) Summit average number and diluted were adjusted by the exchange ratio to calculate pro forma EPS calculations




NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
($ in thousands, except share information)

1.Transaction Accounting Adjustments

At the Effective Time of the merger, each share of Summit common stock, par value $2.50 per share, outstanding immediately prior to the Effective Time, was converted into the right to receive 0.5043 of shares (the "Exchange Ratio") of Burke & Herbert common stock, par value $0.50 per share. Holders of Summit common stock received cash in lieu of fractional shares. In addition, each share of Summit series 2021 preferred stock issued and outstanding immediately prior to the Effective Time of the merger was converted into the right to receive one share of new Burke & Herbert preferred stock, having rights, preferences, privileges and voting powers and limitations and restrictions thereof that are not materially less or more favorable to the holders of the Summit series 2021 preferred stock. The merger is intended to be a tax-free reorganization under Section 368(a) of the Internal Revenue Code.

Pursuant to the Merger Agreement also provides that, at the Effective Time, each Summit RSU that is outstanding and unsettled as of the date of the Merger Agreement, will automatically and without any required action on the part of the holder thereof, convert into a RSU award in respect of shares of the continuing corporation’s common stock on the same terms and conditions as were applicable under the Summit RSU (each such converted RSU award, a "Replacement RSU"), provided that, the number of shares of continuing corporation common stock underlying such Replacement RSU equaled the product of (i) the number of shares of Summit common stock underlying such Summit RSU, multiplied by (ii) the exchange ratio, with any fractional share rounded down to the next lower whole number of shares.

Pursuant to the Merger Agreement provides that, at the Effective Time, each Summit SAR in effect prior to the Effective Time that may be settled in Summit common stock, whether vested or unvested or exercised but unsettled, shall, by virtue of the merger and without any action on the part of the Summit SAR holder, convert into a SAR of Burke & Herbert, as the continuing corporation (each, a "Replacement SAR"), on the same terms and conditions as were applicable to the Summit SAR. The number of Burke & Herbert shares that underly each Replacement SAR equaled the product of (i) the number of shares of Summit common stock underlying the Summit SAR, multiplied by (ii) the exchange ratio, with any fractional share rounded down to the next lower whole number of shares. Certain Summit SAR agreements had a change-in-control feature that resulted in acceleration of the entire unvested portion of a SAR award to become vested with the ability to exercise prior to the expiration of the option.

The total estimated fully diluted transaction value (inclusive of the implied value of unvested restricted stock unit awards, outstanding in-the-money stock appreciation rights of Summit including the awards that are accelerated, the fair value of the preferred stock, and the cash paid for fractional shares) for the purpose of this pro forma financial information is approximately $397.4 million, based on Burke & Herbert’s closing price of $51.67 per share on May 2, 2024. The following is a summary of the fair value of assets acquired and liabilities assumed resulting in goodwill. Goodwill is created when the purchase price consideration exceeds the fair value of the net assets acquired or a bargain purchase gain results when the current fair value of the net assets acquired exceeds the purchase price consideration. For purposes of this analysis as of March 31, 2024, goodwill of $34.5 million results from the transaction; however, the final purchase accounting analysis will be performed as of the merger date and amounts therein are subject to change based on operations subsequent to March 31, 2024, as additional information becomes available and as additional analyses are performed.



Summit BookFairSummit Fair
ValueValueValue
($ in thousands)3/31/2024AdjustmentsNotes3/31/2024
Total purchase price consideration$397,446 
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and equivalents$55,656 $55,656 
Securities, available-for-sale, at fair value490,271 490,271 
Securities, held-to-maturity, at amortized cost93,737 $(7,431)(3)86,306 
Equity and other investments33,413 33,413 
Loans, gross3,697,042 (153,306)(5)3,543,736 
Allowance for credit losses(49,232)25,752 (6)(23,480)
Loans, net of allowance3,647,810 (127,554)3,520,256 
Premises and equipment, net65,725 13,276 (13)79,001 
Accrued interest receivable20,238 20,238 
Company-owned life insurance86,230 86,230 
Goodwill and intangibles73,443 (4,683)(8)68,760 
Other assets76,361 11,502 (7)(9)87,863 
   Total identifiable assets acquired4,642,884 (114,890)4,527,994 
Deposits3,748,415 (7,136)(10)3,741,279 
Borrowings262,989 262,989 
Subordinated debentures and trust preferred securities123,493 (16,466)(11)107,027 
Accrued interest and other liabilities53,706 53,706 
    Total liabilities4,188,603 (23,602)4,165,001 
    Total identifiable net assets$454,281 $(91,288)$362,993 
Pro Forma Goodwill$34,453 

($ in thousands, except share information)
Purchase Price3/31/2024
Common shares of Summit Financial Group, Inc.14,686,738 
Total shares to be exchanged14,686,738 
Exchange ratio0.5043
Burke & Herbert Shares to be Issued7,406,521 
Price per share of Burke & Herbert common stock$51.67 
Purchase price consideration for common stock382,695 
Implied value of stock appreciation rights ("SARs") and restricted stock units4,336 
Cash paid for fractional shares2 
Fair value of preferred stock10,413 
Fully diluted transaction value397,446 
Pro Forma Goodwill$34,453 





Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2024 & Adjustments to the Unaudited Pro Forma Condensed Combined Income Statements as of December 31, 2023, and March 31, 2024

2. The Pro Forma Condensed Combined Balance Sheet was adjusted to reflect the reversal of Summit’s historical equity accounts, the purchase price considerations, the fair value adjustments, and the after-tax provision expense for non-PCD loans to record the necessary transaction accounting adjustments for common stock, additional paid in capital ("APIC"), retained earnings, accumulated other comprehensive income ("AOCI"), and preferred equity.

Balance Sheet
($ in thousands, except share information)3/31/2024
Transaction accounting adjustment for common stock
    Reversal of Summit's common stock$(36,717)
    Number of Burke & Herbert shares issued7,406,521
    Par value of Burke & Herbert common stock$0.50 
        Par value of Burke & Herbert shares issued for merger3,703 
Total transaction accounting adjustment for common stock$(33,014)
Balance Sheet
($ in thousands, except share information)3/31/2024
Transaction accounting adjustment for APIC
    Reversal of Summit's common stock to APIC$36,717 
    Reversal of Summit's retained earnings to APIC316,375 
    Reversal of Summit's AOCI to APIC(7,249)
    Reversal of Summit's preferred equity14,920 
Summit shares outstanding14,686,738 
    Exchange ratio0.5043
    Number of Burke & Herbert shares issued7,406,521 
    Value assigned to Burke & Herbert common shares$51.67 
    Purchase price consideration for common stock382,695 
    Implied value of stock appreciation rights ("SARs") & restricted stock units4,336 
    Cash paid for fractional shares using 10 day average 2 
    Less: par value of Burke & Herbert common stock issued for merger3,703 
    APIC adjustment for Burke & Herbert shares issued383,330 
    Less: Summit equity(454,281)
        Net adjustment to APIC for stock consideration(70,951)
Total transaction accounting adjustment for APIC$289,812 
Balance Sheet
($ in thousands)3/31/2024
Transaction accounting adjustment for retained earnings
    Reversal of Summit's retained earnings$(316,375)
    Provision for credit losses for Non-PCD loans (see note 6)(21,517)
Total transaction accounting adjustments for retained earnings$(337,892)
Balance Sheet
($ in thousands)3/31/2024
Transaction accounting adjustments for AOCI
    Reversal of Summit's AOCI$7,249 
Total transaction accounting adjustment for AOCI$7,249 


Balance Sheet
($ in thousands)3/31/2024
Transaction accounting adjustments for AOCI
Reversal of Summit's preferred equity$(14,920)
Fair Value of preferred equity10,413 
Total transaction accounting adjustment for AOCI$(4,507)

3. Securities held to maturity were recorded at amortized cost at March 31, 2024; therefore, the balance sheet requires a fair value adjustment of $(7.4) million. The income statement adjustment includes prospective reclassification of the fair value adjustment that will be accreted into income based on the expected life of the securities. Post-merger, all of the securities held to maturity were reclassified as securities available-for-sale resulting in a transaction adjustment of $(86.3) million to the debt securities available-for-sale.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Transaction accounting adjustments for debt securities held-to-maturity, at amortized cost
Fair value adjustment on debt securities held-to-maturity, at amortized cost$(7,431)$1,239 $309 
Debt securities held-to-maturity, at amortized cost moved to debt securities available-for-sale, at fair value(86,306)— — 
Total held-to-maturity securities adjustment$(93,737)$1,239 $309 

4. Securities available-for-sale were recorded at fair value at March 31, 2024; therefore, no balance sheet adjustment is necessary. Income statement adjustment includes a prospective reclassification of existing available-for-sale securities fair value adjustment of $(42.0) million that will be accreted into income based on the expected life of the securities.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Debt securities available-for-sale, at fair value$— $8,396 $2,087 

5. Loans were adjusted to reflect the fair value discount for acquired PCD and non-PCD loans of $(153.3) million of which $(172.6) million is assigned to non-PCD loans (overall fair value adjustment) and PCD loans (just non-credit fair value adjustment) on loans acquired and $19.3 million represents reversal of deferred loan fees and fair value adjustments, net. The accruing loan fair value adjustments will be substantially recognized over the expected life of the loans.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Fair value adjustments on loans acquired
Non-PCD loans fair value$(134,549)28,347 8,198 
PCD loans non-credit fair value(38,069)14,236 5,248 
PCD loans credit fair value(23,480)— — 
Total fair value adjustment assigned to loans(196,098)42,583 13,446 
Reversal of deferred loan fees and fair value adjustments, net19,312 — — 
Gross-up for PCD loans23,480 — — 
Total loan fair value adjustment$(153,306)$42,583 $13,446 



6. Allowance for credit losses was adjusted to reverse Summit’s existing allowance for credit losses of $49.2 million and to include the gross-up adjustment for PCD loans of $(23.5) million. Additionally, the allowance for credit losses was adjusted to include an additional provision as required by U.S. generally accepted accounting principles for acquired non-PCD loans of $(27.9) million. The pro forma condensed combined income statement does not include a one-time after-tax provision expense of $(21.5) million; however, the pro forma condensed balance sheet does reflect this amount as a direct equity adjustment.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Allowance for credit losses
Reversal of existing allowance for credit losses$49,232 $— $— 
PCD allowance for credit losses(23,480)— — 
Total adjustment to allowance for credit losses excluding CECL ACL for non-PCD loans (see note (1))25,752 — — 
CECL ACL for Non-PCD loans (27,944)— — 
Total adjustment to allowance for credit losses$(2,192)$— $— 
Retained Earnings Impact to non-PCD
Deferred tax asset impact (using 23% tax rate) (included within Other Assets)$6,427 $— $— 
Retained Earnings impact (see note (1 & 2))$(21,517)$— $— 

7. Other assets were adjusted to record a fair value adjustment for lease contracts of $1.2 million. This fair value adjustment will be amortized into income based on the expected life of the lease contracts.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Other assets $1,184 $(395)$(79)

8. A balance sheet adjustment to intangible assets was made to reflect the reversal of existing core deposit intangible ("CDI") of $(20.4) million, reversal of existing goodwill of $(53.0) million, and to record the acquired CDI fair value of $68.8 million. The pro forma condensed income statement adjustments reflect the acquired CDI amortization upon an expected life of 7 years and the reversal of the existing CDI amortization reflected in the Summit stand-alone income statement.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Core deposit intangible asset
Reversal of existing core deposit intangible$(20,400)$1,440 $217 
Core deposit intangible asset68,760 (17,200)(4,300)
Total core deposit intangible asset$48,360 $(15,760)$(4,083)
Goodwill adjustment
Reversal of existing goodwill adjustment$(53,043)$— $— 
Transaction Goodwill
Goodwill booked in transaction (see note (1))34,453 — — 
Total adjustments$29,770 $(15,760)$(4,083)



9. The balance sheet adjustment reflects the net deferred tax asset / liability established for the reversal of the CDI, the fair value adjustments and the elimination of prior deferred positions upon the transaction, using an effective tax rate of 23%.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Deferred Tax Asset / Liability Impact
Fair value purchase accounting adjustments and elimination of prior deferred positions$(93,221)$— $— 
CDI reversal and recognition adjustment48,360 — — 
Total items subject to tax impact$(44,861)$— $— 
Tax impact (using a 23% tax rate)$10,318 $— $— 

10. Time deposits were adjusted to reflect the fair value adjustment based on current interest rates for similar instruments. The fair value adjustment will be amortized based upon the maturities of the time deposits.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Time Deposits$(7,136)$(3,568)$(593)

11. Subordinated debt & trust preferred securities were adjusted to reflect the fair value adjustments based on current interest rates for similar instruments. This fair value adjustment will be amortized based upon the maturities of these liabilities.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Subordinated debt & trust preferred securities$(16,466)$(5,678)$(1,412)

12. Preferred stock was adjusted to reflect the fair value adjustment using market-based pricing for similar instruments. The fair value adjustment for an equity account does not impact earnings.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Preferred stock$(4,507)$— $— 

13. Balance sheet adjustment to reflect the fair value adjustment of Summit's fixed assets based on current market value. The increase in fair value will be depreciated over an estimated 7 year useful life on a straight line basis.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Premises and equipment, net$13,276 $(1,897)$(472)


14. Merger Cost Adjustment: This adjustment represents the merger costs incurred after the Effective Time that impacted the balance sheet and the income statement. The adjustments impacting the balance sheet are an after-tax adjustment reducing our cash position and a reduction in our retained earnings. The gross adjustment is reflected on the income statement line item merger related expenses.

Balance SheetIncome Statement
($ in thousands)3/31/202412/31/20233/31/2024
Transaction accounting adjustments for merger costs
Merger-related expenses$25,000 $25,000 $— 
Tax Impact(5,750)(5,750)— 
Merger-related expenses (after-tax)$19,250 $19,250 $— 


v3.24.2
Cover
May 03, 2024
Cover [Abstract]  
Document Type 8-K/A
Document Period End Date May 03, 2024
Entity Registrant Name Burke & Herbert Financial Services Corp.
Entity Incorporation, State or Country Code VA
Entity File Number 001-41633
Entity Tax Identification Number 92-0289417
Entity Address, Address Line One 100 S. Fairfax Street
Entity Address, City or Town Alexandria
Entity Address, State or Province VA
Entity Address, Postal Zip Code 22314
City Area Code 703
Local Phone Number 666-3555
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $.50
Trading Symbol BHRB
Security Exchange Name NASDAQ
Entity Emerging Growth Company true
Entity Ex Transition Period false
Amendment Flag true
Entity Central Index Key 0001964333
Amendment Description Effective on May 3, 2024 (the "Closing Date"), Burke & Herbert Financial Services Corp. ("Burke & Herbert"), a Virginia corporation, completed its previously announced merger with Summit Financial Group, Inc. ("Summit"), a West Virginia corporation, pursuant to the Agreement and Plan of Reorganization and accompanying Plan of Merger (the "Merger Agreement") dated August 24, 2023 between Burke & Herbert and Summit.Pursuant to the Merger Agreement, on the Closing Date, (i) Summit merged with and into Burke & Herbert, with Burke & Herbert continuing as the surviving corporation (the “Merger”), and (ii) immediately following the Merger, Summit Community Bank, Inc., a West Virginia chartered bank and a wholly-owned subsidiary of Summit ("SCB"), merged with and into Burke & Herbert Bank & Trust Company, a Virginia chartered bank and a wholly-owned subsidiary of Burke & Herbert ("Burke & Herbert Bank"), with Burke & Herbert Bank as the surviving bank (the "Bank Merger"). On May 3, 2024, the Company filed a Current Report on Form 8-K, as amended by Amendment No. 1 thereto, reporting the completion of the Merger (the "Original Report"). This Amendment No. 2 is being filed with the Securities and Exchange Commission (the "Commission") solely to amend and supplement item 9.01 of the Original Report, as described in Item 9.01 below. This Amendment No. 2 makes no other amendments to the Original Report.The pro forma financial information included in this Amendment No. 2 has been presented for informational purposes only and does not purport to represent the actual results that Burke & Herbert and Summit would have achieved had the companies been combined during the periods presented, and is not intended to project any future results of operations for the combined company.
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