Burke & Herbert Financial Services (BHRB) - 2025 Q4 - Annual Results

Financial Performance - For Q4 2025, net income applicable to common shares was $30.0 million, with diluted earnings per share (EPS) of $1.98, representing an increase from $29.7 million and $1.97 EPS in Q3 2025[5][6] - For the full year 2025, net income applicable to common shares totaled $116.4 million, with diluted EPS of $7.72, compared to the previous year's performance[5] - Net income applicable to common shares for the twelve months ended December 31, 2025, was $116,416,000, compared to $35,033,000 in 2024, showing a significant increase of 232%[17] - Net income applicable to common shares for Q4 2025 was $30,029,000, an increase from $29,739,000 in Q3 2025, and $19,568,000 in Q4 2024, reflecting a year-over-year growth of 53.3%[29] - Total revenue (non-GAAP) for Q4 2025 was $86,556,000, compared to $85,355,000 in Q3 2025 and $82,501,000 in Q4 2024, indicating a year-over-year increase of 4.9%[32] Asset and Liability Management - Total gross loans at the end of Q4 2025 were $5.4 billion, a decrease of $171.8 million from Q3 2025, while total deposits were $6.4 billion, a decrease of $8.1 million[7] - Total assets as of December 31, 2025, were $7,920,626,000, an increase from $7,812,185,000 as of December 31, 2024, indicating a growth of 1.4%[19] - Total deposits as of December 31, 2025, were $6,403,941,000, a decrease from $6,515,239,000 in 2024, reflecting a decline of 1.7%[19] - The net loans as of December 31, 2025, were $5,319,853,000, down from $5,604,196,000 in 2024, representing a decrease of 5.1%[19] - The loan-to-deposit ratio for Q4 2025 was 84.13%, down from 86.70% in Q3 2025, indicating improved liquidity management[29] Income and Expenses - Total interest income for the three months ended December 31, 2025, was $111,140,000, compared to $112,793,000 for the same period in 2024, reflecting a decrease of 1.5%[17] - Net interest income after credit loss expense for the twelve months ended December 31, 2025, was $294,389,000, an increase of 46% from $201,565,000 in 2024[17] - Non-interest income for the twelve months ended December 31, 2025, totaled $46,119,000, up from $36,166,000 in 2024, representing a growth of 27.5%[17] - Total non-interest expense for the twelve months ended December 31, 2025, was $195,560,000, a slight decrease from $197,833,000 in 2024[17] - Non-interest expense for Q4 2025 was $48,499,000, slightly up from $48,092,000 in Q3 2025, but down from $61,410,000 in Q4 2024, showing a significant reduction year-over-year[29] Credit Quality - The Company recorded a credit provision expense of $136 thousand in Q4 2025, with an allowance for credit losses of $67.8 million, or 1.3% of total loans[8] - The allowance for credit losses as of December 31, 2025, was $67,823,000, slightly down from $68,040,000 in 2024[19] - The company reported a credit loss expense of $2,326,000 for the twelve months ended December 31, 2025, compared to $20,475,000 in 2024, indicating a significant reduction in credit losses[17] - Nonperforming loans increased to $74,236 thousand from $89,051 thousand in the prior quarter[24] - Non-performing loans as a percentage of total loans decreased to 1.38% in Q4 2025 from 1.60% in Q3 2025, indicating improved asset quality[29] Capital and Liquidity - Total liquidity at the end of Q4 2025 was $4.8 billion, indicating a strong balance sheet and ample liquidity[5] - The Company maintained a Common Equity Tier 1 capital ratio of 13.2% and a Total risk-based capital ratio of 15.9%, both significantly above regulatory requirements[9] - The consolidated Common Equity Tier 1 (CET1) capital ratio increased to 13.20% in Q4 2025 from 12.79% in Q3 2025, reflecting stronger capital adequacy[29] - Tangible common equity (non-GAAP) increased to $768,340,000 in Q4 2025 from $732,238,000 in Q3 2025, reflecting a solid capital position[37] Interest Margin - The net interest margin for Q4 2025 was 4.11%, up from 4.08% in Q3 2025, primarily due to a decrease in yield on interest-bearing liabilities[7] - The net interest margin (non-GAAP) improved to 4.11% for the quarter ended December 31, 2025, up from 4.08% in the previous quarter[21] - Fully taxable-equivalent (FTE) net interest income was $76,342 million for Q4 2025, compared to $75,075 million in Q3 2025[39] - Average interest-earning assets increased to $7,363,743 million in Q4 2025 from $7,308,536 million in Q3 2025[39] - Taxable-equivalent adjustments for Q4 2025 amounted to $1,420 million, compared to $1,305 million in Q3 2025[39]