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    Burke & Herbert Financial Services Corp. Announces Second Quarter 2025 Results and Declares Common Stock Dividend

    7/24/25 4:00:00 PM ET
    $BHRB
    Major Banks
    Finance
    Get the next $BHRB alert in real time by email

    ALEXANDRIA, Va., July 24, 2025 /PRNewswire/ -- Burke & Herbert Financial Services Corp. (the "Company" or "Burke & Herbert") (NASDAQ:BHRB) reported financial results for the quarter year ended June 30, 2025, and disclosed that, at its meeting on July 24, 2025, the board of directors declared a $0.55 per share regular cash dividend to be paid on September 2, 2025, to shareholders of record as of the close of business on August 15, 2025.

    Burke & Herbert Financial Services Corp. (PRNewsfoto/Burke & Herbert Financial Services Corp.)

    Q2 2025 Highlights

    • For the quarter, net income applicable to common shares totaled $29.7 million, and diluted earnings per common share ("EPS") was $1.97. For the quarter ended March 31, 2025, net income applicable to common shares totaled $27.0 million, and diluted EPS was $1.80.
    • For the quarter, the annualized return on average assets was 1.51% and the annualized return on average equity was 15.50%.
    • Ending total gross loans were $5.6 billion and ending total deposits were $6.4 billion; ending loan-to-deposit ratio was 87.5%. The net interest margin (non-GAAP1) was 4.17% for the three months ended June 30, 2025.
    • The balance sheet remains strong with ample liquidity. Total liquidity, including all available borrowing capacity with cash and cash equivalents, totaled $4.4 billion at the end of the second quarter.
    • Asset quality metrics remain within the Company's moderate risk profile with adequate reserve coverage.
    • The Company continues to be well-capitalized, ending the quarter with 12.2%2 Common Equity Tier 1 capital to risk-weighted assets, 15.3%2 Total risk-based capital to risk-weighted assets, and a leverage ratio of 10.4%.2

    From David P. Boyle, Company Chair and Chief Executive Officer

    "I'm pleased with our first half 2025 results and how our balance sheet is positioned. We're successfully replacing non-strategic loans with assets that meet our relationship-based approach and maintaining ample liquidity, solid capital ratios, and adequate loss reserves. Our provision for credit losses reflects the confidence we have in our ability to manage and maintain asset quality metrics within our moderate risk appetite. We're keeping our focus on expense management while we continue to invest for the future, including our planned expansion in Bethesda, Maryland, and in Fredericksburg and Richmond, Virginia. We are looking forward to a strong second half of 2025 by continuing to be a trusted advisor to our customers and delivering our full suite of products and services across our footprint. Regardless of market developments, we are committed to delivering increased value for our customers, employees, communities and shareholders."

    Results of Operations

    Second Quarter 2025 compared to First Quarter 2025

    The Company reported second quarter 2025 net income applicable to common shares of $29.7 million, or $1.97 per diluted common share, compared to first quarter 2025 net income to applicable to common shares of $27.0 million, or $1.80 per diluted common share.

    • Period-end total gross loans were $5.6 billion at June 30, 2025, a decrease of $57.1 million from March 31, 2025, as the Company exited approximately $90.8 million of non-strategic loans while originating $200.0 million of new, relationship-based loans.
    • Period-end total deposits were $6.4 billion at June 30, 2025, a decrease of $150.9 million from March 31, 2025, primarily due to a $114.8 million decrease in brokered deposits.
    • Net interest income for the quarter was $74.2 million compared to $73.0 million in the prior quarter due to a decrease in interest expense of $0.2 million, combined with an increase in interest income of $1.1 million. Lower interest expense was primarily attributable to lower deposit costs, including lower interest expense resulting from calling brokered time deposits, and the increase in interest income was primarily due to higher security and other interest income, somewhat offset by lower loan interest income.
    • Net interest margin on a fully taxable equivalent basis (non-GAAP1) decreased to 4.17% versus 4.18% in the first quarter of 2025, mainly attributable to a lower yield on the loan portfolio offset by an increase in yield on the securities portfolio and a decrease in yield on interest-bearing liabilities compared to the  first quarter of 2025.
    • Accretion income on loans during the quarter was $11.5 million, and the amortization expense impact on interest expense was $1.4 million, or 56.0 bps of net interest margin on an annualized basis in the second quarter of 2025. In the prior quarter, accretion income on loans during the quarter was $11.4 million, and the amortization expense impact on interest expense was $2.2 million, or 51.7 bps of net interest margin on an annualized basis.
    • The cost of total deposits, including non-interest bearing deposits, was 1.90% in the second quarter of 2025, compared to 1.99% in the first quarter of 2025. The decrease in the cost of deposits was mostly due to a decrease in amortization of acquired time deposits of $0.8 million and a decrease in the rate paid on savings deposits and brokered time deposits compared to the first quarter of 2025.
    • The Company recorded credit provision expense in the second quarter of 2025 of $624 thousand and the Company's allowance for credit losses at June 30, 2025, was $67.3 million, or 1.2% of total loans.
    • Total non-interest income for the second quarter of 2025 was $12.9 million compared to $10.0 million in the prior quarter, primarily due to collection of death proceeds from company-owned life insurance which increased non-interest income by $1.8 million, card network partnership income of $1.3 million, and additional swap income in the second quarter of 2025 compared to the first quarter of 2025.
    • Non-interest expense for the second quarter of 2025 was $49.3 million compared to $49.7 million in the first quarter of 2025, primarily reflecting cost save realizations following the merger-related conversion that occurred in the fourth quarter of 2024.

    Regulatory capital ratios2

    The Company continues to be well-capitalized with capital ratios that are above regulatory requirements. As of June 30, 2025, our Common Equity Tier 1 capital to risk-weighted asset and Total risk-based capital to risk-weighted asset ratios were 12.2%2 and 15.3%2, respectively, and significantly above the well-capitalized requirements of 6.5% and 10%, respectively. The leverage ratio was 10.4%2 compared to a 5% level to be considered well-capitalized.

    Burke & Herbert Bank & Trust Company ("the Bank"), the Company's wholly-owned bank subsidiary, also continues to be well-capitalized with capital ratios that are above regulatory requirements. As of June 30, 2025, the Bank's Common Equity Tier 1 capital to risk-weighted asset and Total risk-based capital to risk-weighted asset ratios were 14.0%2 and 15.1%,2 respectively, and significantly above the well-capitalized requirements. In addition, the Bank's leverage ratio of 11.5%2 is considered to be well-capitalized.

    For more information about the Company's financial condition, including additional disclosures pertinent to recent events in the banking industry, please see our financial statements and supplemental information attached to this release.

    About Burke & Herbert

    Burke & Herbert Financial Services Corp. is the financial holding company for Burke & Herbert Bank & Trust Company. Burke & Herbert Bank & Trust Company is the oldest continuously operating bank under its original name headquartered in the greater Washington, D.C. metropolitan area. With over 75 branches across Delaware, Kentucky, Maryland, Virginia, and West Virginia, Burke & Herbert Bank & Trust Company offers a full range of business and personal financial solutions designed to meet customers' banking, borrowing, and investment needs. Learn more at investor.burkeandherbertbank.com.

    Cautionary Note Regarding Forward-Looking Statements

    This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the beliefs, goals, intentions, and expectations of the Company regarding revenues, earnings, earnings per share, loan production, asset quality, and capital levels, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of expected losses on loans; our assessments of interest rate and other market risks; our ability to achieve our financial and other strategic goals; and other statements that are not historical facts.

    Forward–looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "will," "should," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward–looking statements speak only as of the date they are made; the Company does not assume any duty, does not undertake, and specifically disclaims any obligation to update such forward–looking statements, whether written or oral, that may be made from time to time, whether because of new information, future events, or otherwise, except as required by law. Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in or implied by such forward-looking statements because of a variety of factors, many of which are beyond the control of the Company. Further, factors identified herein are not necessarily all of the factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm the Company. Accordingly, you should consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company and not place undue reliance on forward-looking statements. 

    The risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to, the following: costs or difficulties associated with newly developed or acquired operations; changes in general economic, political, or market trends (either nationally or locally in the areas in which we conduct, or will conduct, business), including inflation, changes in interest rates, market volatility and monetary fluctuations, and changes in federal government policies and practices, as well as the impact from recently announced and future tariffs on the markets we serve; increased competition; changes in consumer confidence and demand for financial services, including changes in consumer borrowing, repayment, investment, and deposit practices; changes in asset quality and credit risk; our ability to control costs and expenses; adverse developments in borrower industries or declines in real estate values; changes in and compliance with federal and state laws and regulations that pertain to our business and capital levels; our ability to raise capital as needed; the impact, extent and timing of technological changes; the effects of any cybersecurity breaches; and the other factors discussed in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Company's Annual Report on Form 10–K for the year ended December 31, 2024, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and other reports the Company files with the SEC.

     

    Burke & Herbert Financial Services Corp.

    Consolidated Statements of Income (unaudited)

    (In thousands)





    Three Months Ended



    Six Months Ended





    June 30,



    March 31



    June 30,





    2025



    2024



    2025



    2025



    2024

    Interest income





















    Taxable loans, including fees



    $       96,803



    $       81,673



    $       97,031



    $     193,834



    $     109,718

    Tax-exempt loans, including fees



    43



    33



    46



    89



    33

    Taxable securities



    9,303



    10,930



    9,487



    18,790



    19,873

    Tax-exempt securities



    3,939



    2,556



    3,267



    7,206



    3,917

    Other interest income



    1,770



    905



    955



    2,725



    1,301

    Total interest income



    111,858



    96,097



    110,786



    222,644



    134,842

    Interest expense





















    Deposits



    30,431



    30,373



    31,851



    62,282



    43,304

    Short-term borrowings



    4,438



    4,071



    3,192



    7,630



    7,726

    Subordinated debt



    2,730



    1,860



    2,729



    5,459



    1,860

    Other interest expense



    26



    28



    27



    53



    56

    Total interest expense



    37,625



    36,332



    37,799



    75,424



    52,946

    Net interest income



    74,233



    59,765



    72,987



    147,220



    81,896























    Credit loss expense - loans and available-for-

    sale securities



    717



    20,100



    900



    1,617



    19,430

    Credit loss (recapture) - off-balance sheet credit

    exposures



    (93)



    3,810



    (399)



    (492)



    3,810

    Total provision for credit losses



    624



    23,910



    501



    1,125



    23,240

    Net interest income after credit loss expense



    73,609



    35,855



    72,486



    146,095



    58,656























    Non-interest income





















    Fiduciary and wealth management



    2,425



    2,211



    2,443



    4,868



    3,630

    Service charges and fees



    2,036



    1,813



    2,089



    4,125



    2,470

    Net gains on securities



    38



    613



    1



    39



    613

    Income from company-owned life insurance



    2,982



    922



    1,193



    4,175



    1,469

    Bank debit and other card revenue



    3,024



    2,457



    2,884



    5,908



    3,588

    Other non-interest income



    2,372



    1,489



    1,413



    3,785



    1,989

    Total non-interest income



    12,877



    9,505



    10,023



    22,900



    13,759























    Non-interest expense





















    Salaries and wages



    21,320



    20,895



    20,941



    42,261



    30,413

    Pensions and other employee benefits



    4,067



    5,303



    5,136



    9,203



    7,668

    Occupancy



    3,521



    2,997



    4,045



    7,566



    4,535

    Equipment rentals, depreciation and

    maintenance



    4,100



    12,663



    4,084



    8,184



    13,944

    Other operating



    16,297



    22,574



    15,458



    31,755



    29,037

    Total non-interest expense



    49,305



    64,432



    49,664



    98,969



    85,597

    Income (loss) before income taxes



    37,181



    (19,072)



    32,845



    70,026



    (13,182)























    Income tax expense (benefit)



    7,284



    (2,153)



    5,644



    12,928



    (1,475)

    Net income (loss)



    29,897



    (16,919)



    27,201



    57,098



    (11,707)

    Preferred stock dividends



    225



    225



    225



    450



    225

    Net income (loss) applicable to

    common shares



    $       29,672



    $     (17,144)



    $       26,976



    $       56,648



    $     (11,932)

     

    Burke & Herbert Financial Services Corp.

    Consolidated Balance Sheets

    (In thousands)





    June 30, 2025



    December 31, 2024





    (Unaudited)



    (Audited)

    Assets









    Cash and due from banks



    $               65,173



    $                35,554

    Interest-earning deposits with banks



    259,973



    99,760

    Cash and cash equivalents



    325,146



    135,314

    Securities available-for-sale, at fair value



    1,522,611



    1,432,371

    Restricted stock, at cost



    42,189



    33,559

    Loans held-for-sale, at fair value



    1,511



    2,331

    Loans



    5,590,457



    5,672,236

    Allowance for credit losses



    (67,256)



    (68,040)

    Net loans



    5,523,201



    5,604,196

    Premises and equipment, net



    133,997



    132,270

    Other real estate owned



    2,742



    2,783

    Accrued interest receivable



    35,453



    34,454

    Intangible assets



    49,114



    57,300

    Goodwill



    34,149



    32,783

    Company-owned life insurance



    182,181



    182,834

    Other assets



    205,687



    161,990

    Total Assets



    $          8,057,981



    $           7,812,185











    Liabilities and Shareholders' Equity









    Liabilities









    Non-interest-bearing deposits



    $          1,363,617



    $           1,379,940

    Interest-bearing deposits



    5,027,357



    5,135,299

    Total deposits



    6,390,974



    6,515,239

    Short-term borrowings



    650,000



    365,000

    Subordinated debentures, net



    97,552



    94,872

    Subordinated debentures owed to unconsolidated subsidiary trusts



    17,140



    17,013

    Accrued interest and other liabilities



    122,297



    89,904

    Total Liabilities



    7,277,963



    7,082,028











    Shareholders' Equity









    Preferred stock and surplus



    10,413



    10,413

    Common stock



    7,790



    7,770

    Common stock, additional paid-in capital



    403,234



    401,172

    Retained earnings



    474,019



    434,106

    Accumulated other comprehensive income (loss)



    (87,854)



    (95,720)

    Treasury stock



    (27,584)



    (27,584)

    Total Shareholders' Equity



    780,018



    730,157

    Total Liabilities and Shareholders' Equity



    $          8,057,981



    $           7,812,185

     

    Burke & Herbert Financial Services Corp.

    Details of Net Interest Margin (unaudited)

    For the three months ended

    Details of Net Interest Margin - Yield Percentages























    June 30



    March 31



    December 31



    September 30



    June 30



    2025



    2025



    2024



    2024



    2024

    Interest-earning assets:

    Loans:



















    Taxable loans

    6.90 %



    6.96 %



    6.91 %



    7.34 %



    7.33 %

    Tax-exempt loans

    5.90



    5.80



    5.87



    5.63



    5.55

    Total loans

    6.90



    6.96



    6.91



    7.34



    7.33

    Interest-earning deposits and

    fed funds sold

    4.68



    5.76



    4.48



    3.43



    3.54

    Securities:



















    Taxable securities

    3.83



    3.85



    3.82



    4.05



    4.48

    Tax-exempt securities

    4.20



    3.85



    3.55



    3.58



    3.05

    Total securities

    3.95



    3.85



    3.75



    3.91



    4.05

    Total interest-earning assets

    6.25 %



    6.31 %



    6.22 %



    6.56 %



    6.49 %





















    Interest-bearing liabilities:

    Deposits:



















    Interest-bearing demand

    2.21 %



    2.16 %



    2.51 %



    3.19 %



    3.00 %

    Money market & savings

    2.01



    2.02



    1.60



    1.43



    1.53

    Brokered CDs & time

    deposits

    3.37



    3.85



    4.55



    4.82



    4.55

    Total interest-bearing

    deposits

    2.41



    2.53



    2.76



    3.02



    2.90

    Borrowings:



















    Short-term borrowings

    3.91



    3.88



    4.17



    4.06



    4.38

    Subordinated debt

    borrowings and other

    9.62



    9.85



    9.87



    10.16



    10.30

    Total interest-bearing

    liabilities

    2.68 %



    2.76 %



    2.98 %



    3.21 %



    3.14 %





















    Taxable-equivalent net

    interest spread

    3.57



    3.55



    3.24



    3.35



    3.35

    Benefit from use of non-

    interest-bearing deposits

    0.60



    0.63



    0.67



    0.72



    0.71

    Taxable-equivalent net

    interest margin (non-GAAP1)

    4.17 %



    4.18 %



    3.91 %



    4.07 %



    4.06 %

     

    Burke & Herbert Financial Services Corp.

    Details of Net Interest Margin (unaudited)

    For the three months ended

    (In thousands)

    Details of Net Interest Margin - Average Balances























    June 30



    March 31



    December 31



    September 30



    June 30



    2025



    2025



    2024



    2024



    2024





















    Interest-earning assets:

    Loans:



















    Taxable loans

    $       5,627,236



    $       5,651,937



    $       5,634,157



    $       5,621,531



    $       4,481,993

    Tax-exempt loans

    3,737



    4,057



    3,115



    4,310



    3,041

    Total loans

    5,630,973



    5,655,994



    5,637,272



    5,625,841



    4,485,034

    Interest-earning deposits and

    fed funds sold

    81,369



    40,757



    152,537



    175,265



    94,765

    Securities:



















    Taxable securities

    1,059,310



    1,039,391



    1,031,024



    996,749



    988,492

    Tax-exempt securities

    476,586



    435,789



    452,937



    440,781



    426,092

    Total securities

    1,535,896



    1,475,180



    1,483,961



    1,437,530



    1,414,584

    Total interest-earning assets

    $       7,248,238



    $       7,171,931



    $       7,273,770



    $       7,238,636



    $       5,994,383





















    Interest-bearing liabilities:

    Deposits:



















    Interest-bearing demand

    $       2,239,100



    $       2,216,243



    $       2,560,445



    $       2,144,567



    $       1,587,914

    Money market & savings

    1,648,338



    1,633,307



    1,366,276



    1,725,387



    1,480,985

    Brokered CDs & time

    deposits

    1,173,213



    1,253,841



    1,247,900



    1,328,076



    1,141,758

    Total interest-bearing

    deposits

    5,060,651



    5,103,391



    5,174,621



    5,198,030



    4,210,657

    Borrowings:



















    Short-term borrowings

    457,775



    336,245



    325,084



    304,849



    376,063

    Subordinated debt

    borrowings and other

    113,813



    112,383



    111,021



    109,557



    72,643

    Total interest-bearing

    liabilities

    $       5,632,239



    $       5,552,019



    $       5,610,726



    $       5,612,436



    $       4,659,363





















    Non-interest-bearing deposits

    $       1,352,785



    $       1,371,615



    $       1,411,202



    $       1,389,134



    $       1,207,443

     

    Burke & Herbert Financial Services Corp.

    Supplemental Information (unaudited)

    As of or for the three months ended

    (In thousands, except ratios and per share amounts)



    June 30



    March 31



    December 31



    September 30



    June 30



    2025



    2025



    2024



    2024



    2024





















    Per common share information

    Basic earnings (loss)

    $                1.98



    $                1.80



    $                1.31



    $                1.83



    $               (1.41)

    Diluted earnings (loss)

    1.97



    1.80



    1.30



    1.82



    (1.41)

    Cash dividends

    0.55



    0.55



    0.55



    0.53



    0.53

    Book value

    51.28



    49.90



    48.08



    48.63



    45.72

    Tangible book value

    (non-GAAP1)

    45.73



    44.17



    42.06



    42.32



    39.11





















    Balance sheet-related (at period end, unless otherwise indicated)

    Assets

    $        8,057,981



    $        7,838,090



    $        7,812,185



    $        7,864,913



    $        7,810,193

    Average interest-earning assets

    7,248,238



    7,171,931



    7,273,770



    7,238,636



    5,994,383

    Loans (gross)

    5,590,457



    5,647,507



    5,672,236



    5,574,037



    5,616,724

    Loans (net)

    5,523,201



    5,579,754



    5,604,196



    5,506,220



    5,548,707

    Securities, available-for-

    sale, at fair value

    1,522,611



    1,436,869



    1,432,371



    1,436,431



    1,414,870

    Intangible assets

    49,114



    53,002



    57,300



    61,598



    65,895

    Goodwill

    34,149



    32,842



    32,783



    32,783



    32,783

    Non-interest-bearing

    deposits

    1,363,617



    1,382,427



    1,379,940



    1,392,123



    1,397,030

    Interest-bearing deposits

    5,027,357



    5,159,444



    5,135,299



    5,208,702



    5,242,541

    Deposits, total

    6,390,974



    6,541,871



    6,515,239



    6,600,825



    6,639,571

    Brokered deposits

    132,098



    246,902



    244,802



    345,328



    403,668

    Uninsured deposits

    1,963,566



    1,943,227



    1,926,724



    1,999,403



    1,931,786

    Short-term borrowings

    650,000



    300,000



    365,000



    320,163



    285,161

    Subordinated debt, net

    114,692



    113,289



    111,885



    110,482



    109,064

    Unused borrowing

    capacity3

    4,075,313



    4,082,879



    4,092,378



    2,353,963



    2,162,112

    Total equity

    780,018



    758,000



    730,157



    738,059



    693,126

    Total common equity

    769,605



    747,587



    719,744



    727,646



    682,713

    Accumulated other

    comprehensive income

    (loss)

    (87,854)



    (88,024)



    (95,720)



    (75,758)



    (100,430)





















    Asset Quality



















    Provision for credit losses

    $                 624



    $                 501



    $                 833



    $                 147



    $             23,910

    Net loan charge-offs

    1,214



    1,187



    737



    285



    599

    Allowance for credit

    losses

    67,256



    67,753



    68,040



    67,817



    68,017

    Total delinquencies (4)

    29,056



    86,223



    38,213



    12,486



    16,334

    Nonperforming loans (5)

    85,531



    64,756



    38,368



    35,872



    32,842

     

    Burke & Herbert Financial Services Corp.

    Supplemental Information (unaudited)

    As of or for the three months ended

    (In thousands, except ratios and per share amounts)



    June 30



    March 31



    December 31



    September 30



    June 30



    2025



    2025



    2024



    2024



    2024

    Income statement

    Interest income

    $        111,858



    $        110,786



    $        112,793



    $        118,526



    $         96,097

    Interest expense

    37,625



    37,799



    42,083



    45,347



    36,332

    Non-interest income

    12,877



    10,023



    11,791



    10,616



    9,505

    Total revenue (non-

    GAAP1)

    87,110



    83,010



    82,501



    83,795



    69,270

    Non-interest expense

    49,305



    49,664



    61,410



    50,826



    64,432

    Pretax, pre-provision

    earnings (non-GAAP1)

    37,805



    33,346



    21,091



    32,969



    4,838

    Provision for (recapture

    of) credit losses

    624



    501



    833



    147



    23,910

    Income (loss) before

    income taxes

    37,181



    32,845



    20,258



    32,822



    (19,072)

    Income tax expense

    (benefit)

    7,284



    5,644



    465



    5,200



    (2,153)

    Net income (loss)

    29,897



    27,201



    19,793



    27,622



    (16,919)

    Preferred stock dividends

    225



    225



    225



    225



    225

    Net income (loss)

    applicable to common

    shares

    $         29,672



    $         26,976



    $         19,568



    $         27,397



    $        (17,144)





















    Ratios

    Return on average assets

    (annualized)

    1.51 %



    1.41 %



    1.00 %



    1.40 %



    (1.06) %

    Return on average equity

    (annualized)

    15.50



    14.57



    10.49



    15.20



    (12.44)

    Net interest margin (non-

    GAAP1)

    4.17



    4.18



    3.91



    4.07



    4.06

    Efficiency ratio

    56.60



    59.83



    74.44



    60.66



    93.02

    Loan-to-deposit ratio

    87.47



    86.33



    87.06



    84.44



    84.59

    Consolidated Common

    Equity Tier 1 (CET1)

    capital ratio2

    12.21



    11.77



    11.53



    11.40



    10.91

    Consolidated Total risk-

    based capital ratio2

    15.26



    14.79



    14.57



    14.45



    13.91

    Consolidated Leverage

    ratio2

    10.42



    10.12



    9.80



    9.66



    9.04

    Allowance coverage ratio

    1.20



    1.20



    1.20



    1.22



    1.21

    Allowance for credit losses

    as a percentage of

    non-performing loans

    78.63



    104.63



    177.34



    189.05



    207.10

    Non-performing loans as

    a percentage of total loans

    1.53



    1.15



    0.68



    0.64



    0.58

    Non-performing assets as

    a percentage of total

    assets

    1.10



    0.86



    0.53



    0.49



    0.46

    Net charge-offs to

    average loans

    (annualized)

    8.6 bps



    8.5 bps



    5.2 bps



    2.0 bps



    5.4 bps

     

    Burke & Herbert Financial Services Corp.

    Non-GAAP Reconciliations (unaudited)

    (In thousands, except ratios and per share amounts)

    Operating net income, adjusted diluted EPS, and adjusted non-interest expense (non-GAAP1)





    For the three months ended





    June 30



    March 31



    December 31



    September 30



    June 30





    2025



    2025



    2024



    2024



    2024

    Net income (loss)

    applicable to common

    shares



    $            29,672



    $            26,976



    $            19,568



    $            27,397



    $          (17,144)

    Add back significant items

    (tax effected):





















    Merger-related



    —



    —



    7,069



    2,449



    18,806

    Day 2 non-PCD

    Provision



    —



    —



    —



    —



    23,305

    Total significant items



    —



    —



    7,069



    2,449



    42,111

    Operating net income



    $            29,672



    $            26,976



    $            26,637



    $            29,846



    $            24,967























    Weighted average dilutive

    shares



    15,023,807



    15,026,376



    15,038,442



    15,040,145



    12,262,979

    Adjusted diluted EPS 6



    $               1.97



    $               1.80



    $               1.77



    $               1.98



    $               2.04























    Non-interest expense



    $            49,305



    $            49,664



    $            61,410



    $            50,826



    $            64,432

    Remove significant items:





















    Merger-related



    —



    —



    8,948



    3,101



    23,805

    Total significant items



    $                  —



    $                  —



    $              8,948



    $              3,101



    $            23,805

    Adjusted non-interest

    expense



    $            49,305



    $            49,664



    $            52,462



    $            47,725



    $            40,627

     

    Operating net income is a non-GAAP measure that is derived from net income adjusted for significant items. The Company believes that operating net income is useful in periods with certain significant items such as merger-related expenses or Day 2 non-PCD provision. The operating net income is more reflective of management's ability to grow the business and manage expenses. Adjusted non-interest expense also removes these significant items, such as merger-related expenses. Management believes it represents a more normalized non-interest expense total for periods with identified significant items.

     

    Total Revenue (non-GAAP1)





    For the three months ended





    June 30



    March 31



    December 31



    September 30



    June 30





    2025



    2025



    2024



    2024



    2024

    Interest income



    $          111,858



    $          110,786



    $          112,793



    $          118,526



    $            96,097

    Interest expense



    37,625



    37,799



    42,083



    45,347



    36,332

    Non-interest income



    12,877



    10,023



    11,791



    10,616



    9,505

    Total revenue (non-

    GAAP1)



    $            87,110



    $            83,010



    $            82,501



    $            83,795



    $            69,270























    Total revenue is a non-GAAP measure and is derived from total interest income less total interest expense plus total non-interest income. We believe that total revenue is a useful tool to determine how the Company is managing its business and demonstrates how stable our revenue sources are from period to period.

     

    Burke & Herbert Financial Services Corp.

    Non-GAAP Reconciliations (unaudited)

    (In thousands, except ratios and per share amounts)

    Pretax, Pre-Provision Earnings (non-GAAP1)









    For the three months ended





    June 30



    March 31



    December 31



    September 30



    June 30





    2025



    2025



    2024



    2024



    2024

    Income (loss) before taxes



    $            37,181



    $            32,845



    $            20,258



    $            32,822



    $           (19,072)

    Provision for (recapture of)

    credit losses



    624



    501



    833



    147



    23,910

    Pretax, pre-

    provision earnings

    (non-GAAP1)



    $            37,805



    $            33,346



    $            21,091



    $            32,969



    $              4,838























    Pretax, pre-provision earnings is a non-GAAP measure and is based on adjusting income before income taxes and to exclude provision for (recapture of) credit losses. We believe that pretax, pre-provision earnings is a useful tool to help evaluate the ability to provide for credit costs through operations and provides an additional basis to compare results between periods by isolating the impact of provision for (recapture of) credit losses, which can vary significantly between periods.

     

    Tangible Common Equity (non-GAAP1)









    For the three months ended





    June 30



    March 31



    December 31



    September 30



    June 30





    2025



    2025



    2024



    2024



    2024

    Common shareholders'

    equity



    $          769,605



    $          747,587



    $          719,744



    $          727,646



    $          682,713

    Less:





















    Intangible assets



    49,114



    53,002



    57,300



    61,598



    65,895

    Goodwill



    34,149



    32,842



    32,783



    32,783



    32,783

    Tangible common equity

    (non-GAAP1)



    $          686,342



    $          661,743



    $          629,661



    $          633,265



    $          584,035

    Shares outstanding at end

    of period



    15,007,712



    14,982,807



    14,969,104



    14,963,003



    14,932,169

    Tangible book value per

    common share



    $              45.73



    $              44.17



    $              42.06



    $              42.32



    $              39.11

     

    In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength because they eliminate intangible assets from stockholders' equity and retain the effect of accumulated other comprehensive income/(loss) in stockholders' equity.

     

    Burke & Herbert Financial Services Corp.

    Non-GAAP Reconciliations (unaudited)

    (In thousands, except ratios and per share amounts)

    Net Interest Margin & Taxable-Equivalent Net Interest Income (non-GAAP1)









    As of or for the three months ended





    June 30



    March 31



    December 31



    September 30



    June 30





    2025



    2025



    2024



    2024



    2024

    Net interest income



    $        74,233



    $        72,987



    $        70,710



    $        73,179



    $        59,765

    Taxable-equivalent

    adjustments



    1,059



    881



    858



    847



    688

    Net interest income

    (Fully Taxable-

    Equivalent - FTE)



    $        75,292



    $        73,868



    $        71,568



    $        74,026



    $        60,453























    Average interest-earning

    assets



    $    7,248,238



    $    7,171,931



    $    7,273,770



    $    7,238,636



    $    5,994,383

    Net interest margin

    (non-GAAP1)



    4.17 %



    4.18 %



    3.91 %



    4.07 %



    4.06 %























    The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest income, we use net interest income on a fully taxable-equivalent (FTE) basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. FTE net interest income is calculated by adding the tax benefit on certain financial interest earning assets, whose interest is tax-exempt, to total interest income then subtracting total interest expense. Management believes FTE net interest income is a standard practice in the banking industry, and when net interest income is adjusted on an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income and this adjustment is not permitted under GAAP. FTE net interest income is only used for calculating FTE net interest margin, which is calculated by annualizing FTE net interest income and then dividing by the average earning assets. The tax rate used for this adjustment is 21%. Net interest income shown elsewhere in this presentation is GAAP net interest income.



    (1) Non-GAAP financial measures referenced in this release are used by management to measure performance in operating the business that management believes enhances investors' ability to better understand the underlying business performance and trends related to core business activities. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the non-GAAP reconciliation tables in this release. Non-GAAP measures should not be used as a substitute for the closest comparable GAAP measurements.

    (2) Ratios as of June 30, 2025, are estimated.



    (3) Includes Federal Home Loan Bank, Borrower-in-Custody (BIC), and correspondent bank availability.



    (4) Total delinquencies represent accruing loans 30 days or more past due.



    (5) Includes non-accrual loans and loans 90 days past due and still accruing.



    (6) Weighted average diluted shares for Q2 2024 calculated only for computation of adjusted diluted EPS. Weighted average diluted shares for GAAP diluted EPS are the same as shares for calculating basic EPS due to the antidilutive effect of the diluted shares when considering the GAAP net loss for the quarter.

    CONTACT:

    Investor Relations

    703-666-3555 

    [email protected] 

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/burke--herbert-financial-services-corp-announces-second-quarter-2025-results-and-declares-common-stock-dividend-302513518.html

    SOURCE Burke & Herbert Financial Services Corp.

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