ALEXANDRIA, Va., Jan. 24, 2025

/PRNewswire/ -- Burke & Herbert Financial Services Corp. (the "Company" or "Burke & Herbert") (Nasdaq: BHRB) reported financial results for the quarter and the year ended December 31, 2024. In addition, at its meeting on January 23, 2025, the board of directors declared a $0.55 per share regular cash dividend to be paid on March 3, 2025, to shareholders of record as of the close of business on February 14, 2025.

Q4 2024 Highlights

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

"Our results for the quarter demonstrate the financial benefits of the merger with Summit and the teamwork involved with the systems integration that took place in November. Despite the amount of time and energy committed to the conversion, we grew both loans and core deposits during the quarter. In addition, the balance sheet reflects ample liquidity and capital as we enter 2025 and we look forward to delivering increased value for our customers, employees, communities, and shareholders."

Results of Operations

Fourth Quarter 2024

The Company reported fourth quarter 2024 net income applicable to common shares of $19.6 million, or $1.30 per diluted common share.

Included in the fourth quarter were pre-tax charges of $8.9 million of expenses related to the merger with Summit. Excluding these items from the current quarter on a tax affected basis, adjusted (non-GAAP) operating net income was $26.6 million, or $1.77 per diluted common share.

Regulatory capital ratios

The Company continues to be well-capitalized with capital ratios that are above regulatory requirements. As of December 31, 2024, our Common Equity Tier 1 capital to risk-weighted asset and Total risk-based capital to risk-weighted asset ratios were 11.5% and 14.6%, respectively, significantly above the well-capitalized requirements of 6.5% and 10%. The leverage ratio was 9.8% 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 December 31, 2024, the Bank's Common Equity Tier 1 capital to risk-weighted asset and Total risk-based capital to risk-weighted asset ratios were 13.3% and 14.4%, respectively, significantly above the well-capitalized requirements. In addition, the Bank's leverage ratio of 10.9% 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; the expected cost savings, synergies, returns, and other anticipated benefits from the integration of Summit following the recently completed merger of Summit with and into the Company; 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. Accordingly, you should not place undue reliance on forward-looking statements.

Burke & Herbert Financial Services Corp.

Consolidated Statements of Income (unaudited)

(In thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2024

2023

2024

2023

Interest income

Taxable loans, including fees

$ 97,903

$ 27,315

$ 311,303

$ 101,800

Tax-exempt loans, including fees

37

—

118

—

Taxable securities

9,868

9,049

39,817

37,179

Tax-exempt securities

3,191

1,372

10,243

5,615

Other interest income

1,794

444

4,680

2,302

Total interest income

112,793

38,180

366,161

146,896

Interest expense

Deposits

35,919

12,487

118,664

39,195

Short-term borrowings

3,383

3,361

14,189

13,856

Subordinated debt

2,754

—

7,412

—

Other interest expense

27

28

111

86

Total interest expense

42,083

15,876

140,376

53,137

Net interest income

70,710

22,304

225,785

93,759

Credit loss expense (recapture) - loans and available-for-sale securities

960

(799)

20,475

235

Credit loss expense (recapture) - off-balance sheet credit exposures

(127)

49

3,745

(21)

Total provision for (recapture of) credit losses

833

(750)

24,220

214

Net interest income after credit loss expense

69,877

23,054

201,565

93,545

Non-interest income

Fiduciary and wealth management

2,429

1,358

8,411

5,354

Service charges and fees

4,447

1,711

15,594

6,670

Net gains (losses) on securities

744

—

1,357

(112)

Income from company-owned life insurance

1,887

1,124

4,686

2,844

Other non-interest income

2,284

631

6,118

3,196

Total non-interest income

11,791

4,824

36,166

17,952

Non-interest expense

Salaries and wages

25,818

9,964

77,089

39,247

Pensions and other employee benefits

4,840

2,285

17,186

9,401

Occupancy

3,630

1,571

11,577

6,035

Equipment rentals, depreciation and maintenance

4,531

1,539

23,174

5,770

Other operating

22,591

6,941

68,807

25,983

Total non-interest expense

61,410

22,300

197,833

86,436

Income before income taxes

20,258

5,578

39,898

25,061

Income tax expense

465

500

4,190

2,369

Net income

19,793

5,078

35,708

22,692

Preferred stock dividends

225

—

675

—

Net income applicable to common shares

$ 19,568

$ 5,078

$ 35,033

$ 22,692

Burke & Herbert Financial Services Corp.

Consolidated Balance Sheets

(In thousands)

December 31, 2024

December 31, 2023

(Unaudited)

(Audited)

Assets

Cash and due from banks

$ 35,554

$ 8,896

Interest-earning deposits with banks

99,760

35,602

Cash and cash equivalents

135,314

44,498

Securities available-for-sale, at fair value

1,432,371

1,248,439

Restricted stock, at cost

33,559

5,964

Loans held-for-sale, at fair value

2,331

1,497

Loans

5,672,236

2,087,756

Allowance for credit losses

(68,040)

(25,301)

Net loans

5,604,196

2,062,455

Other real estate owned

2,783

—

Premises and equipment, net

132,270

61,128

Accrued interest receivable

34,454

15,895

Intangible assets

57,300

—

Goodwill

32,783

—

Company-owned life insurance

182,834

94,159

Other assets

161,990

83,544

Total Assets

$ 7,812,185

$ 3,617,579

Liabilities and Shareholders' Equity

Liabilities

Non-interest-bearing deposits

$ 1,379,940

$ 830,320

Interest-bearing deposits

5,135,299

2,171,561

Total deposits

6,515,239

3,001,881

Short-term borrowings

365,000

272,000

Subordinated debentures, net

94,872

—

Subordinated debentures owed to unconsolidated subsidiary trusts

17,013

—

Accrued interest and other liabilities

89,904

28,948

Total Liabilities

7,082,028

3,302,829

Shareholders' Equity

Preferred stock and surplus

10,413

—

Common stock

7,770

4,000

Common stock, additional paid-in capital

401,172

14,495

Retained earnings

434,106

427,333

Accumulated other comprehensive income (loss)

(95,720)

(103,494)

Treasury stock

(27,584)

(27,584)

Total Shareholders' Equity

730,157

314,750

Total Liabilities and Shareholders' Equity

$ 7,812,185

$ 3,617,579

Details of Net Interest Margin (unaudited)

For the three months ended

Details of Net Interest Margin - Yield Percentages

December 31

September 30

June 30

March 31

December 31

2024

2024

2024

2024

2023

Interest-earning assets:

Loans:

Taxable loans

6.91 %

7.34 %

7.33 %

5.41 %

5.24 %

Tax-exempt loans

5.87

5.63

5.55

—

—

Total loans

6.91

7.34

7.33

5.41

5.24

Interest-earning deposits and fed funds sold

4.48

3.43

3.54

3.82

4.35

Securities:

Taxable securities

3.82

4.05

4.48

3.63

3.73

Tax-exempt securities

3.55

3.58

3.05

2.67

2.64

Total securities

3.75

3.91

4.05

3.43

3.50

Total interest-earning assets

6.22 %

6.56 %

6.49 %

4.66 %

4.59 %

Interest-bearing liabilities:

Deposits:

Interest-bearing demand

2.51 %

3.19 %

3.00 %

0.63 %

0.61 %

Savings

1.60

1.43

1.53

1.97

1.97

Time

4.55

4.82

4.55

4.12

3.97

Total interest-bearing deposits

2.76

3.02

2.90

2.41

2.31

Borrowings:

Short-term borrowings

4.17

4.06

4.38

4.82

4.76

Subordinated debt borrowings and other

9.87

10.16

10.30

—

—

Total interest-bearing liabilities

2.98 %

3.21 %

3.14 %

2.71 %

2.59 %

Taxable-equivalent net interest spread

3.24

3.35

3.35

1.95

2.00

Benefit from use of non-interest-bearing deposits

0.67

0.72

0.71

0.73

0.70

Taxable-equivalent net interest margin (non-GAAP)

3.91 %

4.07 %

4.06 %

2.68 %

2.70 %

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

December 31

September 30

June 30

March 31

December 31

2024

2024

2024

2024

2023

Interest-earning assets:

Loans:

Taxable loans

$ 5,634,157

$ 5,621,531

$ 4,481,993

$ 2,085,826

$ 2,069,738

Tax-exempt loans

3,115

4,310

3,041

—

—

Total loans

5,637,272

5,625,841

4,485,034

2,085,826

2,069,738

Interest-earning deposits and fed funds sold

152,537

175,265

94,765

41,692

40,524

Securities:

Taxable securities

1,031,024

996,749

988,492

989,875

961,396

Tax-exempt securities

452,937

440,781

426,092

259,699

261,075

Total securities

1,483,961

1,437,530

1,414,584

1,249,574

1,222,471

Total interest-earning assets

$ 7,273,770

$ 7,238,636

$ 5,994,383

$ 3,377,092

$ 3,332,733

Interest-bearing liabilities:

Deposits:

Interest-bearing demand

$ 2,560,445

$ 2,144,567

$ 1,587,914

$ 489,779

$ 514,760

Savings

1,366,276

1,725,387

1,480,985

922,732

920,600

Time

1,247,900

1,328,076

1,141,758

745,945

711,575

Total interest-bearing deposits

5,174,621

5,198,030

4,210,657

2,158,456

2,146,935

Borrowings:

Short-term borrowings

325,084

304,849

376,063

307,446

282,426

Subordinated debt borrowings and other

111,021

109,557

72,643

—

—

Total interest-bearing liabilities

$ 5,610,726

$ 5,612,436

$ 4,659,363

$ 2,465,902

$ 2,429,361

Non-interest-bearing deposits

$ 1,411,202

$ 1,389,134

$ 1,207,443

$ 812,199

$ 852,120

Burke & Herbert Financial Services Corp.

Supplemental Information (unaudited)

As of or for the three months ended

(In thousands, except ratios and per share amounts)

December 31

September 30

June 30

March 31

December 31

2024

2024

2024

2024

2023

Per common share information

Basic earnings (loss)

$ 1.31

$ 1.83

(1.41)

$ 0.70

$ 0.68

Diluted earnings (loss)

1.30

1.82

(1.41)

0.69

0.67

Cash dividends

0.55

0.53

0.53

0.53

0.53

Book value

48.08

48.63

45.72

42.92

42.37

Tangible book value (non-GAAP)

42.06

42.32

39.11

42.92

42.37

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

Assets

$ 7,812,185

$ 7,864,913

$ 7,810,193

$ 3,696,390

$ 3,617,579

Average interest-earning assets

7,273,770

7,238,636

5,994,383

3,377,092

3,332,733

Loans (gross)

5,672,236

5,574,037

5,616,724

2,118,155

2,087,756

Loans (net)

5,604,196

5,506,220

5,548,707

2,093,549

2,062,455

Securities, available-for-sale, at fair value

1,432,371

1,436,431

1,414,870

1,275,520

1,248,439

Intangible assets

57,300

61,598

65,895

—

—

Goodwill

32,783

32,783

32,783

—

—

Non-interest-bearing deposits

$ 1,411,202

$ 1,389,134

$ 1,207,443

$ 812,199

$ 852,120