Burke & Herbert Financial Services Corp. completed its transformative merger with Summit Financial Group, Inc. on May 3, 2024. This acquisition significantly expanded the company's geographic footprint and diversified its loan portfolio, integrating Summit's operations across Delaware, Kentucky, Maryland, Virginia, and West Virginia. The strategic rationale behind the merger was to achieve greater scale, enhance market presence, and realize substantial synergies and cost savings.
The transaction resulted in the recognition of $34.10 million in goodwill, primarily representing the anticipated synergies and cost savings from combining the two entities. Additionally, a core deposit intangible of $68.80 million was recognized, reflecting the value of long-term deposit relationships acquired. This intangible asset is being amortized over an estimated weighted average life of 7.00 years using an accelerated method.
This merger fundamentally reshaped Burke & Herbert's operational and financial profile, creating a more balanced and resilient bank. The expanded entity is positioned for improved performance with a more diversified loan portfolio and reduced unrealized losses, setting the stage for its current performance trajectory.
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