A week after completing a 40-for-1 stock split, Burke & Herbert Financial Services Corp. announced plans to list its shares on the Nasdaq stock exchange.
But the $3.5 billion-asset bank has no immediate plans to raise capital, President and CEO David Boyle said in an interview Wednesday. "We're a deliberate company. We take our time. We look at what could go wrong and what could go right," Boyle said.
Burke & Herbert's stock currently trades on the over-the-counter pink sheets. The 171 year-old Alexandria, Virginia, bank — the oldest in the Capitol region — announced the pending Nasdaq listing Tuesday in a press release.
Plans for the stock split and Nasdaq listing have been in the works for the better part of a year, Boyle said, adding the company has been in discussions with regulatory partners, including the Federal Reserve.
Despite the absence of an attention-grabbing initial public offering, Chief Financial Officer Roy Halyama said he expects Burke & Herbert's planned Nasdaq listing to raise its profile among investors.
"We get calls from time to time from investors who want to hear about our strategy," Halyama said. "One of the possible benefits [of listing] is exposure to the Russell 3000."
The Russell 3000 Index tracks shares of the nation's 3,000 largest public companies. Many investors and financial professionals use it as a benchmark.
Tuesday's announcement caps a year of expansion for Burke & Herbert. In March, the company disclosed it had
In August, Burke & Herbert announced it had set up a commercial lending office in Bethesda, Maryland, marking the company's first expansion outside Virginia. In October, it established a holding company.
With ample capital and liquidity, Burke & Herbert is well positioned for growth over the next six to 24 months, even in the face of gathering economic headwinds, Boyle said.
Though its current assets of $3.5 billion represent a dip of 1.3% year-over-year for the quarter that ended at Sept. 30, Boyle attributed the decline to an intentional runoff in the bank's commercial real estate portfolio.
"We're replacing that with the type of business we like to see in Northern Virginia, Fredericksburg and Richmond," as well as in Bethesda, Boyle said. Through the first nine months of 2022, Burke & Herbert reported net income of $30.7 million, up about 12% from the same period in 2021.
Burke & Herbert reported a common equity Tier 1 capital ratio of 18.2% on Sept. 30, as well as a loan-to-deposit ratio of 58.8%.
"Our deposits are stable, and even though we're adjusting our rates, we don't have to pay for a lot of hot money," Boyle said.
Burke & Herbert's current investors appear to have responded positively to its plans for the Nasdaq. Shares, which closed at $67.50 Monday, were trading up 21.4% at $81.94 Wednesday afternoon.
