Burke & Herbert Financial Services Corp. Announces First Quarter 2025 Results, Declares Common Stock Dividend, and Announces Share Repurchase Program For Immediate Release April 25, 2025 Alexandria, VA – Burke & Herbert Financial Services Corp. (the "Company" or "Burke & Herbert") (Nasdaq: BHRB) reported financial results for the quarter year ended March 31, 2025, and disclosed that, at its meeting on April 24, 2025, the board of directors declared a $0.55 per share regular cash dividend to be paid on June ...

ALEXANDRIA, Va., April 25, 2025 /PRNewswire/ -- Burke & Herbert Financial Services Corp. (the "Company" or "Burke & Herbert") (Nasdaq: BHRB) reported financial results for the quarter year ended March 31, 2025, and disclosed that, at its meeting on April 24, 2025, the board of directors declared a $0.55 per share regular cash dividend to be paid on June 2, 2025, to shareholders of record as of the close of business on May 15, 2025.In addition, the Company announced that its board of directors has authorized ...

Credit Risk and Loan Management - The company's 10 largest borrowing relationships accounted for approximately 8.8% of total loans as of December 31, 2024, indicating a concentration of credit risk [53]. - The company requires collateral for commercial loans, which may include real estate, accounts receivable, inventory, and equipment, to mitigate credit risk [55]. - The bank's commercial lines of credit are generally revolving and require close monitoring to protect against increasing loan volumes and diminishing collateral values [60]. - The company faces risks related to credit quality, particularly with loans to small to medium-sized businesses, which may be more vulnerable to economic pressures [142]. - The company may need to increase its provision for credit losses based on regulatory reviews, which could adversely affect its financial condition [146]. - The company faces increased credit risk due to a significant portion of loans being secured by real estate, which may lead to higher levels of non-performing loans during economic downturns [150]. - The company had $41.2 million in non-performing assets as of December 31, 2024, which includes non-accrual loans and loans 90 days or more past due [148]. - The company must provide for probable credit losses through a current period charge to the provision for credit losses, impacting non-interest expenses [26]. - The company is exposed to risks associated with commercial real estate lending, which may require enhanced risk management practices if deemed particularly risky by banking regulators [155]. Capital and Regulatory Compliance - The Company reported Tier 1, common equity Tier 1, and total capital to risk-weighted asset ratios of 11.96%, 11.53%, and 14.57%, respectively, as of December 31, 2024, exceeding the minimum requirements for "well capitalized" status [99]. - The Bank's capital ratios were 13.29% for Tier 1 and common equity Tier 1, and 14.41% for total capital to risk-weighted assets as of December 31, 2024, also surpassing the "well capitalized" threshold [99]. - The minimum capital ratios required by the Federal Reserve include a common equity Tier 1 ratio of 7.0%, a Tier 1 capital ratio of 8.5%, and a total risk-based capital ratio of 10.5% [98]. - The Federal Reserve requires bank holding companies to maintain a minimum leverage ratio of 4.0% [98]. - The Company must enter into an agreement with the Federal Reserve if it fails to meet capital and management requirements to maintain its financial holding company status [85]. - The Company and the Bank are regulated by the Federal Reserve and the Virginia BFI, affecting corporate practices and business operations [97]. - The Federal Reserve may impose limitations on the Company's activities if it does not return to compliance within 180 days after failing to meet capital requirements [85]. - The company is subject to various legal limitations on dividend payments, which may be restricted by regulatory agencies based on capital requirements [93]. - The company may face increased regulatory scrutiny if total assets exceed $10 billion, leading to additional compliance costs [203]. Investment and Asset Management - The bank's investment policy allows for investments in U.S. government debt securities, mortgage-backed securities, and investment-grade state and municipal obligations [66]. - The company actively monitors its investment portfolio to identify material changes and reviews available-for-sale securities for credit loss allowances at least quarterly [70]. - As of December 31, 2024, the allowance for credit losses was $68.0 million, representing 1.20% of total gross loans [144]. - The company has three statutory business trusts with subordinated debentures totaling approximately $19.6 million as of December 31, 2024 [225]. - Payments on junior subordinated debentures must be made before any dividends can be paid on common stock, affecting the priority of common stockholders [226]. Employee and Operational Management - As of December 31, 2024, the company employed 815 full-time equivalent employees, emphasizing a diverse workforce as a competitive advantage [74]. - The company emphasizes employee wellness and safety, offering a comprehensive benefits package and policies supporting remote work and educational assistance [78]. - The company relies on its management team and key employees for continued growth, with potential adverse effects if key personnel are lost [177]. - The company may incur significant costs to attract and retain qualified employees in a competitive market [178]. - The company faces operational risks related to its technological infrastructure, including potential cyber-attacks and system failures [186]. - The company is under continuous threat of cyber-attacks, which could result in reputational damage and operational disruptions [192]. - The company relies on third parties for key components of its business infrastructure, and any failure could disrupt operations [193]. Market and Economic Risks - The Company operates in a highly competitive market, which may impact its profitability and ability to execute its strategy [138]. - The Federal Reserve's monetary policies have historically affected the Company's operating results and are expected to continue doing so in the future [130]. - Economic and consumer trends, including global events and market volatility, could adversely impact the company's financial performance [200]. - The company is exposed to risks associated with climate change, which could affect its financial performance and operational stability [140]. - The company is subject to physical and financial risks associated with climate change, which could affect the value of real estate collateral and increase delinquency rates [185]. Interest Rate Risk Management - The company actively monitors and manages its interest rate risk exposure, reporting findings to the ALCO and the Board at least quarterly [395]. - The company's primary objective in managing interest rate risk is to minimize adverse impacts on net interest income and capital while maximizing yield-cost spread [396]. - Interest rate risk arises from timing differences in repricing and maturities of interest-earning assets and interest-bearing liabilities, as well as changes in the yield curve [398]. - The company uses interest rate sensitivity analysis, market value of portfolio equity analysis, and interest rate simulations to manage interest rate risk [403]. - As of December 31, 2024, a 200 basis point increase in interest rates is projected to decrease earnings by 2.1% [407]. - The economic value of equity analysis indicates that a 200 basis point increase in interest rates would decrease EVE by 8.7% as of December 31, 2024 [408]. - The ALCO is responsible for managing the company's interest rate sensitivity position, ensuring compliance with established limits [403]. - The company may hedge its interest rate risk position, but does not guarantee the success of these hedging attempts [400]. Compliance and Legal Risks - The Bank is subject to several federal laws designed to combat money laundering, including the BSA and the USA PATRIOT Act, requiring it to have policies and procedures to detect and report suspicious activities [118][119]. - The Bank actively checks high-risk OFAC areas, such as new accounts and wire transfers, to ensure compliance with regulations against transactions with designated individuals and organizations [120]. - The Company is subject to various legislative and regulatory initiatives that could significantly impact its operating environment and financial condition [129]. - Noncompliance with anti-money laundering regulations could result in significant penalties and reputational damage [210]. - The company must comply with privacy laws regarding the protection of personal information, with potential legal repercussions for violations [211]. Strategic Growth and Acquisitions - The company's strategy focuses on organic growth supplemented by select acquisitions, with success dependent on generating loans and deposits of acceptable risk and expense [170]. - Risks associated with acquisitions include the time and expense of identifying targets, exposure to unknown liabilities, and integration challenges [172]. - The company may issue additional equity securities, which could dilute existing shareholders and adversely affect the market price of its common stock [223]. - The company is classified as an "emerging growth company," allowing it to take advantage of reduced disclosure requirements, which may affect the attractiveness of its common stock to investors [219]. - The company faces evolving scrutiny regarding Environmental, Social, and Governance (ESG) practices, which may impose additional costs and risks [217].

Core Points - Burke & Herbert Financial Services Corp. appointed Robert V. "Cedar" Hintelmann, Jr. as Executive Vice President and Chief Credit Officer, effective March 17, 2025 [1] - Hintelmann has over 25 years of credit experience in the financial services industry and previously served as Executive Vice President and Deputy Credit Officer for a super-regional bank [1] - His responsibilities will include overseeing credit policy and managing credit risk for the Company's loan portfolio [1] Company Overview - Burke & Herbert Financial Services Corp. is the financial holding company for Burke & Herbert Bank & Trust Company, the oldest continuously operating bank under its original name in the greater Washington, D.C. metropolitan area [2] - The bank operates over 75 branches across Delaware, Kentucky, Maryland, Virginia, and West Virginia, offering a full range of business and personal financial solutions [2] - The Company aims to expand its loan portfolio and execute growth plans, with Hintelmann's experience expected to be integral to these efforts [2]

Here are two stocks with buy rank and strong income characteristics for investors to consider today, February 21:                     Mueller Water Products, Inc. (MWA) : This water infrastructure company has witnessed the Zacks Consensus Estimate for its current year earnings increasing 3.4% the last 60 days.This Zacks Rank #1 company has a dividend yield of 1%, compared with the industry average of 0.4%.Burke & Herbert Financial Services Corp. (BHRB) : This bank holding company for Burke & Herbert Bank & ...

Financial Performance - For Q4 2024, net income applicable to common shares was $19.6 million, with diluted EPS of $1.30, while adjusted operating net income was $26.6 million, resulting in adjusted diluted EPS of $1.77[5] - For the full year 2024, net income applicable to common shares totaled $35.0 million, with diluted EPS of $2.82, and adjusted operating net income was $87.2 million, leading to adjusted diluted EPS of $7.01[5] - Basic earnings per share for Q4 2024 were $1.31, a decrease from $1.83 in Q3 2024[22] - Net income applicable to common shares for Q4 2024 was $19.568 million, down from $27.397 million in Q3 2024[25] - Total revenue (non-GAAP) for Q4 2024 was $82.501 million, compared to $83.795 million in Q3 2024[30] - The company reported a significant increase in credit losses, with a provision of $23,910,000 in June 2024, indicating potential challenges ahead[32] Liquidity and Capital Ratios - Total liquidity at the end of Q4 2024 was $4.2 billion, with total gross loans of $5.7 billion and total deposits of $6.5 billion, resulting in a loan-to-deposit ratio of 87.1%[3] - As of December 31, 2024, the Common Equity Tier 1 capital ratio was 11.5%, and the Total risk-based capital ratio was 14.6%, both significantly above regulatory requirements[6] - The Common Equity Tier 1 (CET1) capital ratio was 11.51% in Q4 2024, slightly up from 11.40% in Q3 2024[25] Asset and Deposit Growth - Total assets increased to $7,812,185 thousand as of December 31, 2024, up from $3,617,579 thousand in 2023, representing a growth of 116.1%[16] - Total deposits reached $6,515,239 thousand, up from $3,001,881 thousand, reflecting a growth of 116.8%[16] - Net loans rose to $5,604,196 thousand, a significant increase from $2,062,455 thousand, marking a growth of 171.5% year-over-year[16] Non-Interest Income and Expenses - Non-interest income for Q4 2024 was $11.8 million, an increase from $10.6 million in the prior quarter, primarily due to gains on securities and increased insurance proceeds[5] - The company’s total non-interest expense for Q4 2024 was $61.4 million, which included $8.9 million of merger-related charges[5] Interest Income and Margin - Interest income for Q4 2024 was $112.793 million, a decrease from $118.526 million in Q3 2024[30] - The net interest margin on a fully taxable equivalent basis decreased to 3.91% in Q4 2024 from 4.07% in Q3 2024, primarily due to lower accelerated loan accretion income[5] - The net interest margin (non-GAAP) for Q4 2024 was 3.91%, compared to 2.70% in Q4 2023, indicating an increase of 44.8%[19] Provision for Credit Losses - The company recorded a provision expense on loans of $1.0 million in Q4 2024, with an allowance for credit losses at $68.0 million, representing 1.2% of total loans[5] - The provision for credit losses was $833,000 for the quarter, an increase from $147,000 in the previous quarter[32] - The allowance for credit losses increased to $68,040 thousand from $25,301 thousand, reflecting a rise of 168.5%[16] Shareholder Returns - The company declared a regular cash dividend of $0.55 per share to be paid on March 3, 2025, to shareholders of record as of February 14, 2025[1] Mergers and Acquisitions - The company completed the merger with Summit Financial Group on May 3, 2024, which contributed to the growth in loans and core deposits during the quarter[4]

Core Viewpoint - Burke & Herbert Financial Services Corp. reported strong financial results for Q4 2024, highlighting the benefits of its merger with Summit Financial Group, with a net income of $19.6 million and a cash dividend of $0.55 per share declared for shareholders [1][3][4]. Financial Performance - For Q4 2024, net income applicable to common shares was $19.6 million, or $1.30 per diluted common share, with adjusted operating net income of $26.6 million, or $1.77 per diluted common share [4][6]. - For the full year 2024, net income applicable to common shares totaled $35.0 million, with earnings per diluted common share at $2.82, and adjusted operating net income of $87.2 million, or $7.01 per diluted common share [4][6]. Balance Sheet and Capital Ratios - As of December 31, 2024, total assets were $7.81 billion, with total gross loans of $5.7 billion and total deposits of $6.5 billion [16][20]. - The company maintained strong capital ratios, with a Common Equity Tier 1 capital ratio of 11.5% and Total risk-based capital ratio of 14.6%, both significantly above regulatory requirements [5][7][8]. Loan and Deposit Trends - Total gross loans increased by $98.2 million from the previous quarter, while total deposits decreased by $85.6 million, primarily due to a reduction in brokered deposits [6][20]. - The loan-to-deposit ratio stood at 87.1%, indicating a stable lending environment [4][6]. Income and Expense Analysis - Net interest income for Q4 2024 was $70.7 million, a decrease from $73.2 million in the prior quarter, attributed to lower loan interest income [6][22]. - Non-interest income rose to $11.8 million, up from $10.6 million in the previous quarter, driven by gains on securities and increased insurance proceeds [6][22]. Dividend Declaration - The board of directors declared a regular cash dividend of $0.55 per share, payable on March 3, 2025, to shareholders of record as of February 14, 2025 [1].

Financial Position - As of September 30, 2024, the company reported total consolidated assets of $7.9 billion, gross loans of $5.6 billion, total deposits of $6.6 billion, and total shareholders' equity of $738.1 million[211]. - The total assets of the company reached $7.8 billion as of September 30, 2024, compared to $3.6 billion as of September 30, 2023[320]. - Total assets increased by $4.25 billion to $7.86 billion as of September 30, 2024, primarily due to the merger[326]. - Total deposits increased by $3.6 billion from $3.0 billion at December 31, 2023, to $6.6 billion at September 30, 2024, primarily due to the completion of the Merger with Summit[364]. - Total shareholders' equity rose to $738.1 million at September 30, 2024, up from $314.8 million at December 31, 2023, an increase of $423.3 million mainly attributed to the Merger[369]. Merger Impact - The company completed the merger with Summit Financial Group, Inc., with holders of Summit common stock receiving 0.5043 shares of Burke & Herbert common stock for each share of Summit common stock owned[212][213]. - The Company incurred $27.5 million in expenses related to the Merger with Summit for the nine months ended September 30, 2024[268]. - Non-interest income rose by $11.2 million, or 85.7%, to $24.4 million for the nine months ended September 30, 2024, compared to $13.1 million for the same period in 2023, also attributed to the Merger[267]. - Net interest income increased by $83.6 million to $155.1 million for the nine months ended September 30, 2024, compared to $71.5 million for the same period in 2023, primarily driven by the impact of the Merger[264]. - The tax-adjusted net interest margin was 3.78% for the nine months ended September 30, 2024, compared to 2.90% for the same period in 2023, reflecting the effects of the Merger[272]. Loan Portfolio and Credit Quality - The bank's loan portfolio is a significant financial asset, and the determination of the ACL is considered a critical accounting estimate due to its reliance on various risk assessments[221]. - The Bank's exposure to commercial real estate (CRE) at September 30, 2024, was $2.5 billion, representing 45.4% of its gross loan portfolio[228]. - The provision for credit losses was $23.4 million for the nine months ended September 30, 2024, compared to $1.0 million for the same period in 2023, due to a one-time CECL Day 2 provision[289]. - The allowance for credit losses (ACL) was recorded at $67,817,000 as of September 30, 2024, reflecting a comprehensive approach to expected credit losses[351]. - The Company's total non-performing assets reached $38,448,000 as of September 30, 2024, compared to $3,744,000 as of December 31, 2023[344]. Income and Expenses - Net income applicable to common shares for the three months ended September 30, 2024, was $27,397 thousand, compared to $4,056 thousand in the prior year[260]. - Non-interest expense increased by $72.3 million, or 112.7%, to $136.4 million for the nine months ended September 30, 2024, compared to $64.1 million for the same period in 2023, largely due to Merger-related costs[268]. - Total interest income increased to $118.5 million for the three months ended September 30, 2024, compared to $37.3 million for the same period in 2023, representing a 218.0% increase[319]. - Non-interest income for the three months ended September 30, 2024, increased by 147.5% to $10.6 million, compared to $4.3 million for the same period in 2023[297]. - The tax-adjusted net interest margin improved to 4.07% for the three months ended September 30, 2024, compared to 2.76% for the same period in 2023[302]. Regulatory Compliance and Risk Management - The company is subject to regulation and supervision by the Federal Reserve as a financial holding company[208]. - As of September 30, 2024, the company complied with all regulatory capital standards and qualifies as "well capitalized"[250]. - The Company actively monitors its commercial real estate portfolio through various credit risk and concentration reports[228]. - The Company conducts periodic stress tests to ensure capital levels remain above regulatory ratios, with liquidity metrics within internal policy guidelines[237]. - Liquidity management is crucial for meeting day-to-day cash flow requirements, with analyses performed quarterly[238][239]. Employee and Operational Metrics - The company had 857 full-time employees as of September 30, 2024, with no employees covered by a collective bargaining agreement[211]. - The number of full-service branches increased to 75 from 23, and full-time equivalent employees rose to 857 from 404, reflecting the expansion following the Merger[268]. - The primary source of liquidity for the company is dividends paid by the Bank, subject to regulatory restrictions[243][244]. - Management believes current liquidity sources are adequate for the company's growth plans[245].

Financial Performance - Net income applicable to common shares for Q3 2024 was $27.4 million, with adjusted operating net income of $29.8 million[2]. - Earnings per diluted common share (EPS) was $1.82, while adjusted diluted EPS was $1.98[2]. - Net income for the quarter ended September 30, 2024, was $27,622,000, compared to a loss of $16,919,000 in the previous quarter[24]. - The net income applicable to common shares for the three months ended September 30, 2024, was $27,397,000, compared to $4,056,000 in the same period of 2023, reflecting an increase of 576%[15]. - Operating net income for September 30, 2024, was $29,846,000, compared to $24,967,000 for June 30, 2024, reflecting a growth of 11.5%[27]. Revenue and Income Growth - Total revenue (non-GAAP) for September 30, 2024, was $83,795,000, up from $69,270,000 in the previous quarter, representing a 20.5% increase[24]. - Total revenue for September 30, 2024, reached $118,526,000, up from $96,097,000 for June 30, 2024, indicating a 23.2% increase[28]. - Total non-interest income for Q3 2024 was $10.6 million, an increase of $1.1 million from Q2 2024[7]. - Non-interest income for the three months ended September 30, 2024, was $10,616,000, compared to $4,289,000 in the same period of 2023, indicating an increase of 148%[15]. Interest Income and Margin - Net interest income for the quarter increased to $73.2 million, up from $59.8 million in Q2 2024[6]. - Total interest income for the three months ended September 30, 2024, was $118,526,000, a significant increase from $37,272,000 in the same period of 2023, representing a growth of 218%[15]. - Net interest income after credit loss expense for the nine months ended September 30, 2024, reached $131,688,000, compared to $70,491,000 in the same period of 2023, marking an increase of 87%[15]. - The net interest margin on a fully taxable equivalent basis was 4.07% for Q3 2024, slightly up from 4.06% in Q2 2024[6]. - The net interest margin for the three months ended September 30, 2024, was 4.07%, compared to 2.70% in the same period of 2023, showing an improvement in profitability[17]. Assets and Deposits - Total assets as of September 30, 2024, amounted to $7,864,913,000, up from $3,617,579,000 as of December 31, 2023, reflecting a growth of 117%[16]. - Total deposits increased to $6,600,825,000 as of September 30, 2024, from $3,001,881,000 as of December 31, 2023, representing a growth of 120%[16]. - Total gross loans at the end of Q3 2024 were $5.6 billion, and total deposits were $6.6 billion, resulting in a loan-to-deposit ratio of 84.4%[3]. Credit Losses and Provisions - The allowance for credit losses at the end of Q3 2024 was $67.8 million, or 1.2% of total loans[6]. - The provision for credit losses for the nine months ended September 30, 2024, was $23,387,000, compared to $964,000 in the same period of 2023, showing a significant increase in credit loss provisions[15]. - Provision for credit losses for September 30, 2024, was $147,000, a significant decrease from $23,910,000 for June 30, 2024[31]. Operational Efficiency - The efficiency ratio improved to 60.66% from 93.02% in the previous quarter, showing enhanced operational efficiency[25]. - Non-interest expense for September 30, 2024, was $50,826,000, a decrease from $64,432,000 for June 30, 2024, showing a reduction of 21.1%[27]. - Total non-interest expense for the nine months ended September 30, 2024, was $136,423,000, compared to $64,136,000 in the same period of 2023, indicating an increase of 113%[15]. Capital and Equity - Common Equity Tier 1 capital to risk-weighted assets ratio was 11.3%, significantly above the regulatory requirement of 6.5%[8]. - Total equity increased to $738,059,000 from $693,126,000, indicating a growth of 6.5%[22]. - Tangible common equity as of September 30, 2024, was $633,265,000, up from $584,035,000 for June 30, 2024, reflecting an increase of 8.4%[32]. Future Plans - The company is focused on planned systems integration in Q4 2024 to enhance efficiencies post-merger with Summit Financial Group[4].

ALEXANDRIA, Va., Oct. 25, 2024 /PRNewswire/ -- Burke & Herbert Financial Services Corp. (the "Company" or "Burke & Herbert") (Nasdaq: BHRB) reported financial results for the quarter ended September 30, 2024. In addition, at its meeting on October 24, 2024, the board of directors declared a $0.55 per share regular cash dividend to be paid on December 2, 2024, to shareholders of record as of the close of business on November 15, 2024, representing a 3.8% increase from the prior quarter dividend. Q3 2024 High ...