Burke & Herbert Financial Services (BHRB) - 2024 Q4 - Annual Results

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]