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Business Combination
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combination Business Combination
Effective on May 3, 2024, Burke & Herbert completed the Merger with Summit, pursuant to the Merger Agreement.

In the Merger, holders of Summit common stock outstanding at the effective time of the Merger received 0.5043 shares of Burke & Herbert common stock for each share of Summit common stock they owned, subject to the payment of cash in lieu of fractional shares. The total aggregate consideration payable in the Merger was approximately 7,405,772 shares of Burke & Herbert common stock. Additionally, each share of Summit’s 6.0% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series 2021 issued and outstanding was converted into the right to receive a share of Burke & Herbert Series 2021 Preferred Stock.

We accounted for the Merger using the acquisition method of accounting in accordance with ASC 805, Business Combinations, and accordingly, the assets and liabilities of Summit were recorded at their respective fair values on the date of completion of the Merger. We recognized goodwill of $34.1 million in connection with the acquisition, which is not amortized for financial reporting purposes, but is subject to annual impairment testing. The goodwill arising from the transaction is not deductible for tax purposes and consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. The fair values of assets and liabilities are subject to refinement for up to one year after the acquisition date if any additional information relative to the acquisition date fair values becomes available. This one year period expired during the quarter ending June 30, 2025. The following table summarizes adjustments to goodwill subsequent to December 31, 2024 (in thousands):
Goodwill
Balance at December 31, 2024$32,783 
Adjustment to goodwill acquired in conjunction with the acquisition of Summit1,366 
Balance at June 30, 2025$34,149 

The adjustment to goodwill resulted in additional review of deferred tax asset and other compensation plan estimates that were established during the Merger and disclosed in the tables below.

The core deposit intangible represents the value of long-term deposit relationships acquired in this transaction and will be amortized over an estimated weighted average life of 7 years using an accelerated method which approximates the estimated run-off of the acquired deposits. The fair value of intangible assets related to core deposits was $68.8 million on the date of acquisition.

The fair value of purchased financial assets with credit deterioration was $380.8 million on the date of the acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $442.3 million. After the Merger, all of the securities, held-to-maturity, were reclassified as available-for-sale.

The following table details the total consideration paid for Summit on May 3, 2024, the fair values of the assets acquired and liabilities assumed and the resulting goodwill at the acquisition date.
($ in thousands, except share information)
ConsiderationMay 3, 2024
Common stock of Summit Financial Group, Inc.14,686,738
Exchange ratio0.5043
Expected Burke & Herbert common stock to be issued7,406,522 
Actual Burke & Herbert common stock issued7,405,772 
Fractional common stock to be paid in cash750 
Actual Burke & Herbert common stock issued7,405,772 
Price per share of Burke & Herbert common stock issued$51.67 
Purchase price consideration for common stock issued382,656 
Fractional common stock to be paid in cash750 
Average 10 day closing price used to pay fractional common stock$53.66 
Cash paid for fractional shares40 
Implied value of stock appreciation rights ("SARs") and restricted stock units4,336 
Fair value of preferred stock issued by Burke & Herbert10,413 
Fully diluted transaction value$397,445 
Goodwill$34,149 
As RecordedEstimatedEstimated
by SummitFair ValueFair Value
($ in thousands)May 3, 2024AdjustmentsMay 3, 2024
Total purchase price consideration$397,445 
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and equivalents53,357 — 53,357 
Securities, available-for-sale, at fair value491,608 — 491,608 
Securities, held-to-maturity, at amortized cost93,573 (7,430)86,143 
Equity and other investments36,085 — 36,085 
Loans, gross3,707,940 (153,306)3,554,634 
Allowance for credit losses(49,471)25,991 (23,480)
Loans, net of allowance3,658,469 (127,315)3,531,154 
Premises and equipment, net62,255 13,276 75,531 
Accrued interest receivable19,610 — 19,610 
Company-owned life insurance86,363 — 86,363 
Goodwill and intangibles73,144 (4,384)68,760 
Other assets43,169 11,263 54,432 
Total identifiable assets acquired4,617,633 (114,590)4,503,043 
Deposits3,704,072 (7,136)3,696,936 
Borrowings283,398 — 283,398 
Subordinated debentures and trust preferred securities123,533 (16,466)107,067 
Unfunded reserve liability6,692 (3,190)3,502 
Accrued interest and other liabilities47,537 1,307 48,844 
Total liabilities4,165,232 (25,485)4,139,747 
Total identifiable net assets452,401 (89,105)363,296 
Goodwill$34,149