425: Burke & Herbert, LINKBANCORP Merge to Form Mid-Atlantic Bank

Burke & Herbert Financial Services Corp and LINKBANCORP, Inc. announce a merger to create an $11 billion Mid-Atlantic community bank.

Summary

• Burke & Herbert Financial Services Corp (Nasdaq: BHRB) and LINKBANCORP, Inc. (Nasdaq: LNKB) have agreed to merge, with LINKBANK merging into Burke & Herbert Bank.
• The combined organization will operate as a high-performing Mid-Atlantic community bank with approximately $11.0 billion in assets, over 100 branch locations, and a presence in 6 states (DE, MD, KY, VA, WV, PA).
• The merger aims to enhance franchise value, expand product suites, and strengthen community engagement.
• The combined entity will retain the name Burke & Herbert Bank and be headquartered in Alexandria, VA.
• The merger is anticipated to close in the second quarter of 2026, subject to shareholder and regulatory approvals.

Sentiment

Score: 8

Explanation: The filing presents a highly positive outlook on the merger, emphasizing strategic growth, enhanced stakeholder benefits, and strong leadership integration. While standard risks associated with forward-looking statements are disclosed, the overall tone is optimistic about the combined entity's future prospects and market position.

Positives

• **For Employees**: Aligned cultures and shared values, greater scale providing additional career mobility, and strengthened ability to recruit, retain, and invest in top-tier talent.
• **For Shareholders**: Enhanced presence in key markets (VA, WV, MD, KY, DE, PA), increased franchise value, attractive financial impacts, and demonstrated successful integration capabilities driving significant long-term value.
• **For Customers**: Leveraged technology capabilities to expand product offerings, combined earnings allowing for continued technology investment and customer experience improvements, and increased size to further support client growth.
• **For Communities**: Combines two cultures with a strong commitment to community engagement and local economic impact, a targeted regional focus on financial inclusion, and a consistent commitment to the critical role of community banking.
• No immediate plans for branch closures, with all locations continuing to be evaluated as part of a standard annual review process.
• Both banks utilize many of the same systems, including the core operating system, loan origination solution, and digital platform, which may facilitate integration.

Risks

• The occurrence of any event, change, or other circumstances that could give rise to the right of one or both parties to terminate the definitive merger agreement.
• The outcome of any legal proceedings that may be instituted against Burke & Herbert or LINK.
• 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 conditions to closing are not satisfied, or are obtained subject to unanticipated conditions.
• The ability of Burke & Herbert and LINK 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.
• The possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of integration problems, economic strength, or competitive factors.
• 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 due to 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 or successfully integrate operations, which may be more difficult, time-consuming, or costly than expected.
• Revenues following the proposed transaction may be lower than expected.
• 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 LINK to retain customers, hire key personnel, maintain relationships with suppliers, and on their operating results and businesses generally.
• Risks related to the potential impact of general economic, political, and market factors on the companies or the proposed transaction.

Future Outlook

The combined organization anticipates leveraging technology capabilities, continuing investment in customer experience improvements, and further supporting client growth. The merger is expected to enhance franchise value and drive significant long-term value for shareholders through successful integration. The closing is projected for the second quarter of 2026, pending necessary approvals.

Management Comments

• David P. Boyle will continue as CEO of the combined organization, and Charlie Maddy will continue as President.
• Andrew Samuel of LINKBANK will become a Senior Advisor to Burke & Herbert Bank and serve as Bank Director.
• Carl Lundblad and Brent Smith of LINKBANK will join the Burke & Herbert Bank Executive Management Team.
• Our commitment to our employees remains strong, and we will communicate any future updates well in advance of any changes.
• We believe that by combining these two entities, we are creating a high-performing, diversified community bank that will provide exceptional performance and scale to our clients, communities, employees, and shareholders.
• As a combined organization, we have a shared cultural alignment in providing Service Beyond Expectations.

Industry Context

This merger reflects a broader trend of consolidation within the community banking sector, driven by the need to achieve greater scale, enhance technological capabilities, and expand geographic reach. The formation of an $11 billion Mid-Atlantic community bank positions the combined entity to better compete with larger regional and national banks, while maintaining a strong local focus on community engagement and financial inclusion.

Management Changes

Corporate Governance

Stakeholder Impact

• **Shareholders**: Expected enhanced franchise value, attractive financial impacts, and long-term value from successful integration. Potential for dilution due to the issuance of additional shares in connection with the transaction.
• **Employees**: Anticipated benefits include aligned cultures, greater career mobility, and strengthened ability to recruit and retain talent. No immediate job changes are expected.
• **Customers**: Expected to benefit from an expanded product suite, continued technology investment, improved customer experience, and increased support for client growth. No immediate changes to daily banking operations are planned.
• **Communities**: The combined entity is committed to strong community engagement, local economic impact, and financial inclusion across its expanded footprint.
• **Suppliers/Creditors**: Potential impacts on relationships and operating results generally are noted as a risk factor.

Next Steps

• Burke & Herbert Financial Services Corp will file a registration statement on Form S-4 with the SEC to register shares for the transaction.
• A joint proxy statement/prospectus will be sent to shareholders of Burke & Herbert and LINK seeking approvals.
• Shareholder and regulatory approvals are required for the merger to proceed.
• The merger is anticipated to close in the second quarter of 2026.
• Systems integration will occur after the merger closes, with details to be shared as available.
• Regular communication and channels for employee questions will be provided.

Key Dates

Recommendation

The merger creates a significantly larger and more diversified regional bank with an expanded geographic footprint in the Mid-Atlantic, positioning it for enhanced market competitiveness and growth. The stated benefits for shareholders, including increased franchise value and attractive financial impacts, coupled with a clear strategic rationale for operational efficiencies and customer service improvements, suggest a positive long-term outlook. The integration of key leadership from both entities and shared core systems indicate a potentially smoother transition. While merger-related risks are present, the strategic advantages and potential for synergy realization make this an attractive investment for long-term growth-oriented portfolios.

Keywords

Merger, Community Bank, Mid-Atlantic Banking, Financial Services, Corporate Governance, Shareholder Value, Regional Banking, Burke & Herbert, LINKBANCORP, Bank Acquisition