425: Burke & Herbert to Acquire LINKBANCORP in $354M All-Stock Deal

Burke & Herbert Financial Services Corp. will acquire LINKBANCORP, Inc. in an all-stock transaction valued at approximately $354.2 million, expanding its footprint across the Mid-Atlantic.

Summary

• Burke & Herbert Financial Services Corp. (BHRB) will acquire LINKBANCORP, Inc. (LNKB) in an all-stock transaction.
• The transaction is valued at approximately $354.2 million, or $9.38 per share of LNKB common stock, based on BHRB's closing price of $69.45 as of December 17, 2025.
• LNKB will merge with and into BHRB, with BHRB as the surviving corporation.
• Immediately following the merger, LINKBANK, LNKB's wholly-owned subsidiary, will merge with and into Burke & Herbert Bank & Trust Company (B&H Bank), BHRB's wholly-owned subsidiary, with B&H Bank as the surviving bank.
• LNKB common stock holders will receive 0.1350 shares of BHRB common stock for each share of LNKB common stock, with cash in lieu of fractional shares.
• Existing BHRB shareholders are expected to own approximately 75% of the combined company, and LNKB shareholders are expected to own approximately 25%.
• The merger is intended to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code.
• LNKB's time-vesting restricted stock awards and restricted stock unit awards will fully vest and convert into BHRB common stock or the right to receive merger consideration. LNKB stock options will be assumed by BHRB and converted into BHRB stock options.
• LNKB's 2022 Employee Stock Purchase Plan (ESPP) will have its current offering period as the final one, with purchase rights exercised earlier, and the plan will terminate at the effective time of the merger.
• Two members of LNKB's board of directors will join BHRB's board, and three members of Link's board (including Andrew Samuel, LNKB's CEO) will join B&H Bank's board.
• Andrew Samuel will join B&H Bank as Senior Advisor, Carl Lundblad (LNKB President) as Executive Vice President, and Brent Smith (LINK President) as Executive Vice President, Pennsylvania Market Leader.
• A termination fee of $14.167 million will be payable by either LNKB or BHRB under certain specified circumstances.

Sentiment

Score: 8

Explanation: The merger is presented as a highly strategic and financially accretive move, expanding market reach and creating a larger, more competitive regional bank. The expected EPS accretion and aligned cultures are strong positives. While integration risks are inherent in any merger, they are acknowledged and appear to be managed with a clear plan for leadership transition and operational continuity.

Positives

• Expands Burke & Herbert's geographic footprint into Pennsylvania and significantly enhances its existing presence across key Mid-Atlantic markets, resulting in over 100 locations across Delaware, Kentucky, Maryland, Pennsylvania, Virginia, and West Virginia.
• Creates a bank holding company with pro forma total assets of approximately $11.0 billion and pro forma total deposits of approximately $9.1 billion, indicating increased scale and market presence.
• The transaction is expected to result in a combined earnings per share of approximately $9.18 in the first full year of combined operations, assuming fully realized cost savings, suggesting financial accretion.
• The exchange ratio is neutral to the cash dividends currently paid to LINK shareholders, based on Burke & Herbert's current quarterly cash dividend rate.
• The transaction is supported by the boards of directors of both companies, with directors entering into support agreements to vote their shares in favor of the merger, increasing certainty of shareholder approval.
• Key executives from LINKBANCORP will join the combined entity's executive management team, and directors will join the boards, ensuring continuity and leveraging expertise.

Negatives

• The possibility that anticipated benefits, including cost savings and synergies, may not be realized when expected or at all, potentially due to integration challenges.
• 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 during the integration process.
• Revenues following the proposed transaction may be lower than expected.
• Dilution caused by BHRB's issuance of additional shares of its capital stock in connection with the proposed transaction.
• Potential adverse effects on the ability to retain customers, key personnel, and maintain relationships with suppliers due to the announcement, pendency, or completion of the transaction.

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 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 on a timely basis or at all.
• 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 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 the impact of, or problems arising from, the integration of the two companies.
• The strength of the economy and competitive factors in the areas where Burke & Herbert and LINK 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 LINK's operations and those of Burke & Herbert.
• Revenues following the proposed transaction may be lower than expected.
• The dilution caused by BHRB'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 and key personnel and maintain relationships with their 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 transaction is expected to close in the second quarter of 2026, subject to regulatory and shareholder approvals. The combined entity anticipates achieving approximately $9.18 in earnings per share in the first full year of combined operations, driven by expected cost savings and synergies. The merger aims to expand Burke & Herbert's market presence and enhance its existing footprint across the Mid-Atlantic region, positioning the combined company for continued growth and value delivery to stakeholders.

Management Comments

• "This strategic acquisition marks another transformative milestone in Burke & Herbert's long history. By uniting the strengths of Burke & Herbert and LINK, we are positioning ourselves to deliver unparalleled value to our customers, employees, communities and shareholders. Our entry into Pennsylvania and the expanded presence across key Mid-Atlantic markets underscores our unwavering commitment to community banking and reinforces our reputation as a trusted financial partner wherever we operate." David P. Boyle, Burke & Herbert Chair and Chief Executive Officer.
• "Our organizations share a vision to invest in the development of strong future leaders for the industry and our communities, to contribute to economically and socially flourishing communities, and to seek to demonstrate the continued viability of and integral role of community banking for our economic and social development. Burke & Herbert's dedication to its core values of serving & leading, delivering more, elevating everyone, and always being invested are demonstrated in its financial results and make them a great partner that accelerates our ability to deliver value for all our stakeholders." Andrew Samuel, LINK Chief Executive Officer.

Industry Context

This merger represents a significant consolidation within the regional banking sector, allowing Burke & Herbert to expand its geographic reach into Pennsylvania and strengthen its presence across the Mid-Atlantic. The creation of a larger entity with approximately $11.0 billion in assets and $9.1 billion in deposits positions the combined company for increased competitiveness and scale in a dynamic financial services landscape. This move aligns with broader industry trends where regional banks seek strategic acquisitions to achieve growth, enhance market share, and leverage operational efficiencies in a competitive environment.

Comparison to Industry Standards

• The pro forma total assets of approximately $11.0 billion and total deposits of approximately $9.1 billion position the combined entity as a substantial regional bank, capable of competing with larger institutions while maintaining a community banking focus.
• The expected combined earnings per share of $9.18 in the first full year, assuming fully realized cost savings, indicates an accretive transaction, which is a key financial metric often sought in successful bank mergers.
• The all-stock nature of the transaction is a common strategy in bank mergers, aiming to preserve capital and align the interests of shareholders from both merging entities.
• The commitment to retaining key management and board members from the acquired entity is a standard practice to ensure smooth integration and leverage existing relationships and market knowledge.

Management Changes

Corporate Governance

Legal Proceedings

• Neither LNKB nor any of its Subsidiaries is a party to any, and there are no outstanding or pending or, to the knowledge of LNKB, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against LNKB or any of its Subsidiaries or any of their current or former directors or executive officers or challenging the validity or propriety of the transactions contemplated by this Agreement that would reasonably be expected to have a Material Adverse Effect on LNKB.
• There is no material injunction, order, judgment, decree, or regulatory restriction imposed upon LNKB, any of its Subsidiaries or the assets of LNKB or any of its Subsidiaries (or that, upon consummation of the Merger or Subsidiary Merger, would apply to the Surviving Corporation or any of its affiliates).
• Similar statements apply to BHRB, indicating no material legal proceedings or regulatory restrictions that would reasonably be expected to have a Material Adverse Effect on BHRB.

Related Party Transactions

• No transactions or series of related transactions, agreements, arrangements or understandings, nor any currently proposed transactions, between LNKB or its Subsidiaries and any current or former director or executive officer or 5% or more beneficial owner (or their immediate family/affiliates) of LNKB Common Stock, of the type required to be reported in any LNKB Report pursuant to Item 404 of Regulation S-K, that have not been so reported.
• No similar undisclosed material related party transactions for BHRB.

Stakeholder Impact

• Shareholders (LNKB): Will receive 0.1350 shares of BHRB common stock for each LNKB share, with cash in lieu of fractional shares. Expected to own approximately 25% of the combined company. The exchange is neutral to current cash dividends.
• Shareholders (BHRB): Expected to own approximately 75% of the combined company. The transaction is expected to be accretive to EPS in the first full year.
• Employees (LNKB): Continuing employees will receive no less favorable base salary/wage, target annual bonus, and long-term incentive opportunities for one year post-closing (excluding certain benefits). Certain employees will receive severance pay for qualifying terminations. Service with LNKB will be recognized for BHRB Benefit Plans (with some exceptions). LNKB's 401(k) plan will be terminated, and employees fully vested, with rollover options. Health insurance coverage continuity. Retention bonuses for certain employees.
• Customers: The expanded footprint across the Mid-Atlantic region, with over 100 locations, may offer customers broader access to services and a larger branch network.
• Communities: Management emphasizes a shared vision to invest in communities and contribute to economic and social flourishing.
• Management/Directors: Key LNKB executives and directors will transition to leadership roles and board positions within the combined entity, ensuring continuity and leveraging their expertise.

Next Steps

• Prepare and file a joint proxy statement and Form S-4 registration statement with the SEC.
• Obtain necessary state securities law or Blue Sky permits and approvals.
• Obtain required regulatory approvals from the Federal Reserve Board, Virginia Bureau of Financial Institutions (BFI) of the VSCC, Pennsylvania Department of Banking and Securities (PA DOBS), Maryland Office of the Commission of Financial Regulations (MD OCFR), and any other relevant governmental entities.
• Hold separate shareholder meetings for both BHRB and LNKB to obtain approval for the Merger Agreement.
• Cause the shares of BHRB Common Stock to be issued in the Merger to be approved for listing on NASDAQ.
• Complete the merger of LINKBANCORP, Inc. into Burke & Herbert Financial Services Corp.
• Immediately following the parent merger, complete the subsidiary merger of LINKBANK into Burke & Herbert Bank & Trust Company.
• LNKB will amend or modify its Dividend Reinvestment and Stock Purchase Plan (DRSPP) to acquire shares in the open market or privately negotiated transactions.
• LNKB will terminate its 401(k) plan and fully vest employees, unless BHRB determines otherwise, and facilitate rollovers into BHRB's plan.

Key Dates

Recommendation

The all-stock merger between Burke & Herbert and LINKBANCORP is a strategic move that promises significant expansion into new markets (Pennsylvania) and a substantial increase in the combined entity's asset and deposit base, reaching approximately $11.0 billion and $9.1 billion respectively. The projected EPS accretion of $9.18 in the first full year, assuming cost savings, indicates a financially sound and value-creating transaction for shareholders. The commitment to retaining key management and board members from LINKBANCORP, along with the establishment of a regional advisory board, suggests a thoughtful integration strategy aimed at leveraging local expertise and minimizing disruption. While integration risks are inherent in any merger, the stated cultural alignment and the expected financial benefits make this an attractive opportunity for long-term investors seeking growth in the regional banking sector.

Keywords

Bank Merger, Financial Services, Acquisition, LINKBANCORP, Burke & Herbert, LNKB, BHRB, All-Stock Transaction, Community Banking, Mid-Atlantic Expansion, Regulatory Approval, Shareholder Vote, Corporate Governance, Integration, Earnings Per Share, Assets, Deposits, Tax-Free Reorganization